“We’re Gonna Need Some Faster Rats” – Leadership in the Post-Covid, Post-Millennial, Post-Monopoly World
The dominate theme in the history of high tech has been that of continuous growth. Ever since Moore laid down his famous Law, the promise of enduring productivity has been fulfilled over and over again and the industry has been rewarded with decades of what seems to be uninterrupted growth. And with that growth came uninterrupted prosperity for all of its various stakeholders. That is, of course, until just recently with the announcement of approximately 100k lay offs. But in the scheme of things, given the sheer size of the industry, this doesn’t amount to much more than budget dust, a mere rounding error in the work-a-day world of a globe spanning colossus.
Recently, with the advent of social media, grievances of the newly tech unemployed have taken on much larger mind share than they did back in 2008 or 2001 or ’92 or ’87 or every other time the industry encountered economic doldrums. All things being equal, industry adjustments due to economic circumstances have not been nearly as consequential as those attributable to creative destruction; the waves of periodic innovation that have largely served to reorganized and redeployed resources rather than merely freeing them to pursue more noble, self-actualizing endeavors.
By the time anyone gets around to reading this post, the stock prices of all the big tech players will be well on their way to recovery with all the buy side analysts cheering the headcount reductions. But if you’ve been through a few of these, unlike most of the current leadership in the C-suite of big tech companies, you might have a gnawing intuition that this time something’s different. The good news is that anyone interested in acquiring the fuckedcompany.com domain name could probably pick it up for a song, that is if they move with all due speed.
The gnawing intuition currently stalking the industry is that this round of layoffs is purported to be about economic circumstances, a looming recession that caught the big players a bit over their skies, when in fact it is a deepening sense of impending discontinuity, in innovation, markets, regulation, social orientation and business models (see The Ineluctable Entropy of Being – December 2018). And the change, should it come, will only be amplified by the fact that the last time there was this much hubris in tech was just before the dot com bust, a period that many of today’s tech leaders don’t remember. And several of the value propositions that have succeeded since then, search, social media, cloud, smart phones, block chain and crypto, have yet to be truly tested in the crucible of innovation. And as much as nature hates a vacuum; it abhors continuity (see Innovation: Power Laws, the Adjacent Possible and the Accumulation of Continuity – March 2017).
Now lots of folks in the tech industry will argue that this simply isn’t the case, that the leadership at Meta and Alphabet and AWS have been tried and tested. But the obvious next question would be by what? These shops have mostly enjoyed monopolies over their markets for the last 15 to 20 years (see A Perfect Storm? – March 2018) And for the most part have avoided antitrust provisions from nearly every corner of the globe where they operate (see Privacy, Blockchains and Balkanization – December 2017). But if you need specific substantiation look no further than the the amount of fines these shops have manged to collect in just the last couple of years.
Source: Statista
Now, each of these players employs a small Mexican army of lawyers to prevaricate and protest their innocence to each of the local authorities, so it goes without saying that none of these issues are uncontested. But here’s the thing: When interviewing prospective employees do you think HR at these shops is asking if you’re an unrepentant scoff law? Have any unpaid traffic violations? Ignore any court orders? Violate any consent decrees? And, if not, why not? At Big Tech Inc, it happens all the time. Since when is it a badge of honor to work for a firm that is an open and unapologetic scoff law?
But this is far from the only issue confronting big tech at the moment. The very idea of what constitutes leadership is in doubt. The notion that corporate governance must aspire to a higher moral purpose has caused some firms to lose sight of what was until just recently considered common sense. For instance, Twitter decided that it had a higher moral purpose than explicit rights granted by the constitution. A practice widely subscribed to by big tech players. That simple bit of hubris put it in play and the transaction that resulted has jeopardized its very existence, shrinking its number of active users while incentivizing numerous competitors in the newly emerging Fediverse. Since when does committing harakiri in the company parking lot amount to inspirational leadership?
Alphabet, who has arguably had a lock on one of the most lucrative markets in tech history, failed to see the threat created by Large Language Models, a technique it helped invent and popularize. ChatGPT along with Microsoft and a host of other competitors is now poised to eat its lunch, much to the delight of EU regulators. In a couple of years, after ChatGPT generated content becomes the lion share of those same Large Language Models input, imagine how much fun we’ll all have trying to determine what the hell is real and what is Chatclap generated bullshit? And how would that differ from supplier provided, agenda driven, purposefully curated search results? Do no evil, yeah right.
Tech, which for years has enjoyed the business liberalization of foreign markets, is about to face a new set of global prerequisites. The economic consequences of open markets and hegemonic ambitions of political competitors is about to unwind in some very unexpected ways. China and the US are about to part company. The EU is about to run out of patience with US suppliers that ignore their regulations. India is poised to begin the nationalization of its internet with similar initiatives gathering momentum in Latin America. The impending consequences of social, AI and quantum computing is renewing nationalized tech regulation and tightly controlled innovation programs.
The list goes on. Pick a dimension and I’ll cite you a concern. Culture? Woke is the new mediocracy. Your company’s success depends on your employees’ identities? Put that in your 10-K and your mission statement. ESG? Government stipulated investment due to political ideology? Third rate minds solving first world problems with other people’s money. What could go wrong? Leadership may no longer be the province of the heroic but it need not be the playground of the clueless. Yet, increasingly, it seems to be just that.
In the wake of any corporate downsizing, the immediate result is confusion. The social buzz from Meta and Microsoft and Salesforce wants to know how could this have happened here when by all accepted measures it doesn’t appear to be commensurate with existing levels of business activity. So the problem is not with the work force but with management. By most accounts, that would appear be an accurate assessment and assertion. So what could justify such actions? A lack of confidence. Confidence in the future.
One of the last great discontinuities in techdom was the rise and predominance of the Wintel architecture. But even this didn’t happen over night. Intel’s 4004 debuted in 1971. MS-DOS and the Intel 8086 didn’t join up until 1980. Wintel didn’t become the dominate architecture until 1990 after IBM’s self inflicted PS2/OS2 disaster. Early on, few who were in it could see it coming. Most were heads down enjoying the success of component based, wide-word, proprietary OS architectures. But in a matter of mere months, maybe 18 or so at the most, the world had changed and only those who enjoyed revenue streams from large legacy installed bases were able to weather the transition. The future of even iconic brands such as IBM and Apple were in doubt.
But it might be a surprise to learn that some in the midst of it knew what was happening. And many of those knew that to succeed you had to make a frightful transition, abandon your present intellectual property, proprietary investments and economic model in hopes of obtaining a yet to be determined future one. But to do so was onerously expensive; you had to sustain your current business model until a future one emerged to take its place; for many, an unsustainable economic proposition. During a conversation with a colleague, then the CFO of a high tech entity, we laid it all on the table; all together, the cost to transition was far greater than the cost to sustain and no matter how many people you fired the numbers didn’t add up.
So the question was one of what was the way forward, to which he said, and these words still haunt me, “We’re gonna need some faster rats.”
The only problem was, all the faster rats had already left to join the next wave of innovation.
Cover graphic, fragment of the book cover for “Some Rats Are Faster” by Drayton Bird, courtesy of Secker & Warburg, Random House imprint. All other images, statistics, illustrations and citations, etc. derived and included under fair use/royalty free provisions.
