Monthly Archives: April 2012

What Are You Worth?

Who knows best what you should be paid? Your boss? Some HR goon? A company policy (aka an algorithm)? Your colleagues? Or you?

I have for a very long time believed that people should be treated with respect at work (and not just at work, of course). What would it mean to take that belief to its logical conclusion – to “turn it up to 11”, as the XP folks (and Spinal Tap) are wont to say?

At Familiar, everyone got to:
  • choose their own terms of engagement – from sub-contractor through to indentured serf
  • choose their own hours, place(s) of work, equipment and tools
  • choose their own salaries and payment rates

Most people I’ve mentioned this to over the years have shrugged it off as just something weird. Generally, too weird even to engage in discussion about. Weirdness bordering on random madness.

But there was a method to our madness. A very carefully considered method. Yes, I had a hypothesis, and it panned out well.


My hypothesis ran like this:

We want folks to feel valued. And that their opinions are respected. And we’d like them to act responsibly – making good decisions without referring everything “upstairs” all the time. We want to build a community of trust and mutualism. (See also: our Credo).

Further, without excessive intrusion into their personal lives, how could we tell what people’s needs were with respect to e.g. income, free time, distractions, etc., at any given time? “From each according to their capabilities, To each according to their needs” seemed like a very reasonable (ethical) stance for a community to take (its Marxist roots notwithstanding).

So, how about we demonstrate trust, respect and mutualism by placing the “ultimate” questions into folks’ own hands? Questions like:

  • How much should folks be paid?
  • What hours should folks work?
  • Who should decide working conditions?
  • Who decides who gets to work on what projects?

Some doubted that folks could be trusted. I myself felt that if salaries and payments stayed secret and confidential, then that would be at odds with the trust and mutualism we were trying to foster. So we also instituted an open-book policy so that everyone (including clients and suppliers) could see all the accounting information, including payments to staff.

I’d just like to repeat: all this was a rational response to an ethical and practical conundrum. A conundrum that I have never seen any other business address adequately or effectively. A response invented from first principles (rather than a solution blindly copied from the playbook of the traditional management mythos).


The most intriguing consequence we observed was that folks chose to be paid less that we thought would be the case. Most often, at or below prevailing market rates. Even with awareness of those rates.

The second consequence was that it encouraged open and healthy discussion about value – and in particular, customer value.

The third consequence, slower to emerge, was that folks began to consider and discuss their own self-image. This blossoming self-awareness was, of course, the real benefit – and very congruent with our declared purpose as a community.


In summary, I think the “experiment” proved – at least to my satisfaction – that “No one know’s what you’re worth – or what you need – better than you.”

– Bob

A post very congruent with the core tenets of Rightshifting and the Marshall Model.

Bulldozer00's Blog

A few weeks ago, my friend Charlie Alfred challenged me to take a break from railing against the dysfunctional behaviors that “emerge” from the vertical command and control nature of hierarchies. He suggested that I go “horizontal“. Well, I haven’t answered his challenge, but Charlie came through with this wonderful guest post on that very subject. I hope you enjoy reading Charlie’s insights on the horizontal communication gaps that appear between specialized silos as a result of corpo growth. Please stop by his blog when you get a chance.


In “Profound Shift in Focus“, BD00 discusses the evolution of value-focused startups into cost-focused borgs.  There’s ample evidence for this, but one wonders what lies at the root?

One clue is Russell Ackoff’s writings on analysis and synthesis.  Analysis starts with a system and takes it apart, in the pursuit of understanding…

View original post 681 more words

We’re All Wasting Our Time

Of course, on a metaphysical level, this could be said to be universally true.

I tell you, we are here on Earth to fart around, and don’t let anybody tell you different.

~ Kurt Vonnegut

Then again, some folks may feel that wasting time is an important part of living.

I’m not going to go to either of those places in this post.

What Would You Like To Do Today?

@dancres recently reminded me that I had a habit of asking this question of him and others when we were working together at Familiar (circa 1998). From my perspective, as the founder of the company, I hoped for the answer “do some work”. In fact, given our shared Purpose:

“To give people the opportunity to work together to discover what fulfilment means to them as individuals.”

and Credo, it was a given that working – and working together – was a prerequisite for fulfilling that purpose. Put another way, unless folks wanted to work together – rather than, say, goof off – they might be less likely “to discover together what fulfilment means to them as individuals”. If the Familiar community did not so arrange things that working was everyone’s best and preferred option, it was failing them, and itself.

Now, I’m not suggesting that your collective purpose, in your workplace, will be the same as this. (Maybe that would be nice). But whatever your collective purpose at work, that purpose sets a context within which one can see what is a “waste of time” and what is not.

Note: Absent any clarity on “collective purpose”, I’d posit that everything is (potentially) a waste of time. How would you know otherwise?

Most Organisations Waste Around 80% of Folks’ Time

The basic Rightshifting Chart illustrates that organisations near to the median (the “1” mark on the horizontal axis)  are wasting around eighty percent of their effort on non value-adding activities. Things on which neither customers nor any other stakeholders want to spend their money. That’s like doing busywork for four days out of every five-day working week! I think we all know implicitly how this happens:

How much of your time is spent on doing stuff that matters? And, fundamentally, isn’t doing stuff that matters what matters to us?

How Does This Happen?

How does it happen that so many organisations waste so much of their time (and by implication, your time, your life)?
Superficially, it happens because people who should know better don’t see what’s going on, and even when they do see, assume that – because it happens in so many organisations – it’s “normal”, and even unavoidable. Most shrug it off by calling it “the cost of doing business”.

Learn To See

But more fundamentally, it happens because folks are blind to the systemic conditions that lead to all of the aforementioned forms of time-wasting. It’s no accident, I think, that Rother & Shook’s (excellent) book on Value Stream Mapping is titled “Learning to See”.

Local Optima

Recently, some folks on Twitter have railed against the criticism of local optimisations, as if doing something, however valueless, however much a waste of time, is better than doing nothing. How do you feel about that?
Are you happy that you’re wasting much of your life on doing stuff that has no value, that doesn’t matter? Can you see the things that don’t need doing? Do you keep a look out? Do you care, if not for yourself, then for others in the same boat? How long must it go on?

– Bob

Lay Off the Managers


I see a lot of anti-management sentiment amongst the Agile development community. Well, to be honest, amongst the general development community and wider world, too.

To make any radical improvement in effectiveness of an organisation – especially in the case of the Analytic-Synergistic transition – everyone has to be engaged and supportive of the effort. Alienating a key constituency (the managers) does not seem to me to be anything but woefully counter-productive.

Some, upon reading other of my blog posts, might even assume I sympathise with this anti-management position. Actually, I don’t. Management adds value and needs doing. I just don’t think managers should be doing it.

Let’s not Conflate Managers with Management

I draw a clear distinction between managers and management:

  • Managers are the folks that, in most organisations, have the sole prerogative to do the “acts of management”. I include executives in this, along with the middle-managers of typical organisations.
  • Management is (in its essence) the act of evaluating information, making decisions, etc. We could also call this “the act of managing” (management 1598, from “manage” 1555-1565 < Italian maneggiare to handle, train (horses) < Latin manus hand.

Managers. And Management. Let’s not conflate the two.

Just because, in typical organisations, these two things are very often manifest in the same persons, this need not necessarily be so. In the different, alien town of Radicalsville, where generalising specialists (multi-skilled people) are the norm, anyone can do the management. Oh, and there are no “managers”, as such, just as there are no programmers, testers, designers, architects, business analysts, HR people, financial folks, sales people, or any other single-skilled specialists. This is but one implication of “self-organising” a.k.a. “self-managing” teams.

“Hate the sin, love the sinner”

~ Mohandas K Gandhi

The Dysfunction of Having Managers do the Management

Most managers see themselves as having to sit in the driving seat, making the decisions. I can attest to the fact that it’s better (much more productive, less risky) to have the folks with the relevant information make the decisions. These days, especially in knowledge-work organisations, that’s rarely the managers. And struggling, against the grain, to get the relevant information from the front line to “the managers” is an effort fraught with dysfunction, at best.

Deming, Drucker, Ackoff, etc. all make the observation that management is required, managers are not. A bit like planning and plans, respectively:

“In preparing for battle I have always found that plans are useless, but planning is indispensable.”

~ Dwight D Eisenhower, 34th President of the USA

So what is so dysfunctional about having the managers (exclusively) doing the management in our knowledge-work organisations?

  • Contributes to the us-vs-them, managers-vs-workers schism.
  • Robs people of a sense of ownership in their work, leading to a chronic lack of motivation and engagement.
  • Fundamental Attribution Error – blaming individuals for poor performance rather than seeing 95% of poor performance being the result of the way the work works.
  • Misguided attempts to “manage people” through “fixing” them, rather then encouraging their strengths cf “First Break All the Rules” ~ Marcus Buckingham and Curt Coffman
  • Preservation of the status quo.
  • Stifling of Innovation.
  • Wasting people’s potential.
  • Siloism, politicking, tribalism and turf wars.
  • Bureaucracy.
  • Complacency and toleration of ineffectiveness, waste.
  • Conformity and homogeneity.

See also this 1984 video of Dr Deming explaining the Five Deadly Diseases:

  1. Lack of constancy of purpose.
  2. Emphasis on short-term profits (focus on stock price, quarterly dividend).
  3. Merit systems: appraisals, management by objective, management by fear.
  4. Mobility of managers, shallow knowledge of the work.
  5. Use of visible numbers only.

There is Still a Place for the Folks Formerly Known as Managers

There is still a place for the folks that have until now carried the title of “manager”. Just not “in charge”, with exclusivity over doing “management”.

A place with a different label, and a different role.

If we accept that everyone should be involved, to some greater or lesser extent, in the management of an organisation, what about the folks formerly known as “managers”? If their traditional role is to disappear or be subsumed, what can they usefully do to add value in Radicalsville?

Well, they can become multi-skilled, like the rest of the workforce. And thus play an integral (equal) role in the teams – not as in-charge managers but as team members.

Let’s not overlook the fact that these folks have skills, experience (for good or ill) and – often, deep – knowledge of the organisation and its markets, its suppliers, etc.. I posit this change has benefits for all concerned, not least for the artists formerly known as managers, themselves.

There’s also the question of equity a.k.a. fairness. Many managers I have known have been just trying to do a good job in a frustrating situation. And these folks are often just as much victims of a broken system as the workers. (Remember, Deming’s 95% rule still applies).

And then there’s the pragmatic issue of support. You’ve probably heard Upton Sinclair’s dictum:

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”

~ Upton Beall Sinclair, Jr. circa 1932

Bringing about radical transitions in any organisation requires, first and foremost that folks feel safe, secure and valued as individuals. Even the faintest hint that the organisation is beginning to see managers as redundant will doom any transition to early and abject failure.


So, tell me, what do you think? Lay off the managers – or lay off the managers?

– Bob

Further Reading

Get rid of managers and we’ll all be happier – Management-Issues blog post
How I improved my business by getting rid of managers – SmartCompany article
Should We Get Rid of the Managers? (Human Resources) – IOAtWork article
First, Let’s Fire All the Managers – Harvard Business Review article
Who Needs Management?! – StickyMinds article
Who needs managers? – blog post
Agile management – an oxymoron?: who needs managers anyway? – ACM Digital Library article (fee required)
The Great Game of Business – Jack Stack (book, recommended)
BBC “Ban the Boss” programme (video) about Blaenau Gwent council

All Executives are Unethical

[This post first appeared as a White Paper in October 2008. I have reposted it here for wider accessibility.]

doing the right thing – the moral case for rightshifting

Are all executives unethical? This White Paper argues that, absent objective evidence, it’s simply unethical for executives to believe that product and software development in their organisations is reasonably effective.

the ethics of belief

London, April 11, 1876. There is uproar in the House. But this is not the House of Commons, rather the Grosvenor Hotel, and the furore is not political but – more unusually perhaps – philosophical.

William Kingdon Clifford – then professor of mathematics and mechanics at University College London – and the youngest ever person to be accepted into London’s elite Metaphysical Society, is presenting his inaugural paper. His audience includes the likes of Alfred Tennyson, William Gladstone, Thomas Huxley and the cream of London’s intelligentsia. The title of his paper is “The Ethics of Belief”.

Even before he finishes his reading, half the audience have stormed out of the room in protest. The remainder are on their feet, heartily engaged either in shouting him down or cheering him on.

What did the audience find so contentious about Clifford’s proposition? In his essay, he asserts that whatever someone chooses to believe cannot be exempt from the ethical judgement of others. A belief may leave someone open to a charge of unethical behaviour, depending on whether they have earned “the right to believe it”.

ethics in the development of software-intensive products and services

London, October 2008. Waves of financial crises crash upon the bulwarks of the World’s financial system. Ordinary people in all walks of life look upon the excesses of business in a new, and distinctly unflattering light. What has happened to the traditional business values of probity, social responsibility, ethics? Good questions indeed. Management – and especially financial management – has become tarnished. Executives are regarded with suspicion, even contempt.

Of course, recent events have only served to propel these issues into the public eye. In many avenues of management – and over many years – complacency, self-interest and greed seem to have overturned diligence, responsibility and probity. I believe we could all benefit from taking a long hard look at what we have become.

My own focus of concern is the arena of software and product development. I have seen literally hundreds of organisations in the business of developing software-intensive products and services in the course of my career. Most of these businesses have been wasting enormous amounts of time, money, effort, and human potential, through their unwittingly inefficient approaches to the practice of software development.

“…whatever someone chooses to believe cannot be exempt from the ethical judgement of others.”

And in most cases, little or nothing of any effective, practical value is done to address the situation, or if done, then not sustained.

In my experience this almost always comes about because those nominally responsible for the situation – the senior executives of a company – honestly believe that their software development people are doing the best they possibly can (even though that rarely seems good enough).

So here’s the rub:

Do executives have the right to believe that their people are working as productively as possible – even if they have not gathered and considered the evidence?

Is such a belief, even when sincerely held, justifiable when such an executive has acquired his or her belief…

“…not by honestly earning it in patient investigation but rather by stifling his doubts? And although in the end he may have felt so sure about it that he could not think otherwise, yet inasmuch as he had knowingly and willing worked himself into that frame of mind, he must be held responsible for it.”

But what if disaster (or merely loss of profit) does not befall the business? Would the executive be any less guilty?

“Not one jot. When any action is once done. it is right or wrong, forever; no accidental failure of its good or evil fruits can possibly alter that. The man would not have been innocent, he would only have been not found out. The question of right or wrong has to do with the origin of his belief, not the matter of it; not what it was, but how he got it; not whether it turned out to be true or false, but whether he had a right to believe on such evidence as was before him.”

Prior to Clifford, the established intelligentsia presumed that beliefs could never be examined in an ethical light. A gentleman could believe any damn thing he pleased.

Until recently, it seemed as if that presumption still held sway in many organisations (including HM Government). But today, William Clifford’s question comes back to haunt us. Yes, executives may truly believe that people are being as productive as possible – but do they have any right to believe it?

about the author

My name is Bob Marshall and I’ve been a specialist in the transformation of organisational performance – particularly in the software development and business technology arenas – for the past twenty years or more.

I became a “Rightshifter” in the first place because of the egregious waste of time, money, effort and – above all – human potential that I saw time and again in organisations trying to develop software-intensive systems and products. So many people have such a poor time at work, frustrated and unfulfilled every day, in the majority of left-shifted organisations out there.

And the main reason for all this misery and waste? A simple belief that things are OK. Or at least, not amenable to improvement. Such a belief seems widespread, particularly amongst senior executives. So, before I make the case for Rightshifting as an ethical and moral imperative, allow me to describe in a little more detail just what I mean by “Rightshifting”.


Nowadays, the profitability – even the very survival – of most organisations relies on the ability to consistently produce (or acquire) software-intensive technology at an economic cost, and then integrate that technology into their lines of business (LOB). Yet few organisations ever give much thought to building and growing their ability to do so.

The following chart shows the distribution of technology organisations, according to their relative effectiveness at producing useful software:

Note: Although this chart is essentially anecdotal in its representation of organisational effectiveness, there’s much empirical data from e.g. ISBGS showing a very similar curve for individual projects.

By “Rightshifting”, we’re talking about the process of moving organisations to the right along the horizontal axis of this chart.

Most people don’t expect organisational effectiveness to be so unevenly distributed – with such a disproportionately high number of relatively ineffective organisations.


This distribution suggests that most software personnel have never seen software development at its best (or even, good). Their unfamiliarity with effective practice gives rise to a natural scepticism about whether things are really any better anywhere. Even people who have worked in the software industry for twenty or thirty years might never have seen software development practices anywhere near their best.

Most people will have spent their entire careers working in organisations over on the left-hand side of the chart. But some lucky few have seen for themselves that the best organisations are indeed much better than the rest.

Thus, by “Rightshifting”, we’re talking about the process of moving organisations to the right along the horizontal axis of the above chart.

the ethical and moral imperative for rightshifting

How do you feel about people wasting their time? I’m talking here specifically about the waste of effort, time and resources during the working day. There’s the obvious economic cost, of course. If employees are wasting time, by definition that’s costing their employer money. In software development, both the waste – and the cost – are often significant, but rarely visible.

However, I’m not going to dwell on this aspect in this article. Instead I want to talk about the morality of waste. Or rather, the immorality of it all.

We’ve already seen how Clifford caused uproar amongst his peers by suggesting that belief is subject to ethical scrutiny. And I’ve suggested that most executives’ belief that things are OK within their software development shops fails that ethical test.

But I feel it goes further than that. Not only is executives’ naïve belief in the productivity of their workforce unethical in itself, but the consequences – for individuals, the business and wider society – are immoral too: waste, misery, stress, friction, conflict, disrespect, under- achievement, despondency, profligacy, demoralisation and frustration, to name but a few.

the ethical way forward

So what to do? First, even before looking at the reality of the situation, on the ground, in their own organisations, I would suggest that responsible executives need to take a look at themselves – and their own motivations and culpability. Have they “honestly earned the right to their belief through patient investigation” – or are they merely “stifling their doubts”?

Have executives “honestly earned the right to their belief through patient investigation” – or are they merely “stifling their doubts”?

If the latter, then I suggest executives are ethically bound to go look for themselves at the reality of the situation in their organisations. Some may feel uncomfortable doing this, lacking the necessary technical skills, or even simply the time. This should be no bar, however. Various specialist organisations exist to offer the necessary audit and review services. These organisations can conduct Clifford’s “patient investigations” and furnish the objective evidence.

Having the necessary evidence in mind, executives may then take pride that their beliefs pass the ethical test.

Of course, having real evidence to hand will likely show that the business has much work to do to by way of Rightshifting. So then let the journey commence!

And finally, executives with a new-found or renewed ethical sentiment may begin to examine their peers’ beliefs in an ethical light, too. Thus, ethical business, and a more ethical society at large, grows stronger. Or is that too much to hope for?

In closing, I leave you with the words of Bertrand Russell:

“What is wanted is not the will to believe, but the wish to find out, which is its exact opposite.“

– Bob

copyright ©2008 

Emotioneering at the BCS

Last Wednesday (4 April 2012) @papachrismatts and I presented a session on Emotioneering at the BCS. For the folks who could not attend, here’s a brief reprise of the evening.


We started out by introducing ourselves, and then declared our two objectives for the evening:

  • To introduce the audience to the concept of Emotioneering.
  • To inspire some folks to apply the idea to their own product development efforts.

What is Emotioneering?

The term “Emotioneering” is not widely used or known – the only fields in which I have come across it being video games, and product development. For the latter field, I’m the only person I know of that’s using the term –  and applying its ideas in practise. “Emotioneering” is a portmanteau word, formed from “Emotion” and “Engineering” i.e. “engineering emotions into products”.

Emotioneering is two ideas linked together:

  1. The appreciation that modern neuroscience research has shown unequivocally that people make buying decisions on an emotional basis, not a rational basis, and therefore that successful products – highly-saleable products – are best designed from the perspective of the emotional responses they evoke, rather than the features or functions they contain.
  2. Given than many existing software products do evoke emotional responses in buyers and users alike, product designers and developers can imagine applying engineering disciplines to ensuring that their products actually evoke the emotions they think will appeal to buyers.

The Neuroscience of Buyology

Martin Lindstrom (see photo, above), a Marketing Guru, spent $7million and three years on a study using FMRI and EEG brain scanners to discover what was going on inside people’s brains when they were in the process of deciding whether and what to buy. This research is detailed in his book “Buyology”.

Brain Scanning

Chris had brought along a mock EEG machine, and we proceeded to demonstrate, with the able assistance of a volunteer from the audience, how the brain scanning technique works.

Real-world Emotioneering

Chris and I then moved on to talk about some real-worl examples of companies that have realised the power of designing products (actually, “whole products“) to evoke emotions in their customers. These examples included:

  • Zara (fashion) and Madonna concerts
  • Coke (soft drinks) and America’s Got Talent
  • Manga (baby eyes)
  • Typhoo tea (“Two Thumbs fresh” TV adverts)
  • The Nokia ringtone (negative associations)
  • Apple (Jonathan Ive)
  • Others (see the book)

Note: As far as I know, none of these companies actually use an explicitly Emotioneering approach.


In the middle of talking about Zara and Madonna, Chris received a phone call on his mobile, which he had “inadvertently forgotten to switch off”. After chatting to the caller for a minute or two, he handed the phone to me and I continued the conversation. After perfunctorily apologising, we resumed the presentation.

How Did You Feel About That?

After the examples, we returned to ask the audience how they had felt about the interruption. They were intrigued to examine their various reactions to the “rude” and “inappropriate” phone conversation. I wonder how (more) memorable the evening will have been because of this “gag”?

The Game

Through presenting “Real Options”, Chris and Olav (Masssen) have found that people only take the ideas on board when their emotions are engaged. In other words, a strictly rational appeal does little to inspire folks to look at Real Options more closely. Chris and I presented a very simple “game” to engage folks kinaesthetically and emotionally in the Emotioneering ideas. (BTW, if you were there, how did this work for you?)


We had a brief Q&A session to recap on the idea the people do not buy on a rational basis, but rather on an emotional basis.

The Engineering Angle

I then segued into the second idea linked to Emotioneering: The idea that products – particularly software products and products containing software – can be engineered to evoke specific emotions in potential purchasers, customers, users, etc..

I have long favoured Use Cases as a means to capture functional requirements or product features. Many folks like to use User Story cards to the same end. I showed a very simplistic Use Case diagram which I have adapted as a notation for Emotioneering and thus renamed to a “Feel Case diagram”. In this example we had just two “Feel Cases” for the product in question (a car). See diagram, below:

Aside: To my delight, Tom Gilb was in the audience and we all too briefly discussed the role of quantification in such “Feel Cases”.

Some folks opined afterwards that this part of the presentation had been too short. I am resolved to remedy this if I have the honour of ever presenting again on this topic.

Final Q&A

We had a lively set of questions from the audience, and then adjourned to continue same “down the pub” (the Lyceum Tavern).  My two questions to the audience were:

  • “Our first objective was to introduce you to the idea of emotioneering. How many folks think they have a grip of the idea?” Most all of the room signified in the affirmative.
  • “Our second objective was to inspire you to apply these ideas in your work. How many folks might now do that?” Around 50% of the room signalled in the affirmative.

– Bob


In case anyone’s interested, here’s the fruits our our planning session, pre-event:

Pearls Before Swine

Good Home Cooking

My maternal Grandmother was a wonderful cook. And when she and my mother were running the family business – a seaside guest house – when I was a wee lad, she used to cook all the meals for the guests (and the family and staff too). She really cared about her cooking, selecting quality ingredients from local fishermen, farmers and grocers, and lovingly crafting the best meals she could – within the budget allowed by the business.

Most of the guests loved the food, many paying compliments and returning year after year. Locals would also dine-in regularly. But there were always some, a very few, for whom the food did not meet their expectations, or more likely, suit their palates. In her consummate, inimitable style, when faced with a particularly unrerasonable complaint, she would say “…pearls before swine”. Meaning, she knew her food was excellent, and if some folks didn’t like it, then they probably didn’t know how to appreciate it.

“Give not that which is holy unto the dogs, neither cast ye your pearls before swine, lest they trample them under their feet, and turn again and rend you.”

Matthew 7:6

Software Pearls

Do you believe that great knowledge-work will be recognised by the folks paying for it? Some teams may be lucky and find a good customer that appreciates what they’ve achieved, the quality they’re delivered, the efforts they have made – many times, above and beyond the call of duty (or the terms of the contract). But very often, customers receive excellently-crafted products with absolutely no clue as to the quality of the things they’ve just received. Unlike a great plate of food, they have no means to evaluate what they’ve just been served. The converse is also all-too-frequently true; oftentimes customers get delivered a real dog of a product, and have no clue that they’ve just been completely rooked.


Of course, some customers don’t feel that suppliers should be especially thanked, recognised or otherwise noted for simply delivering what was asked-for, regardless of any unforeseen difficulties or outstanding innovations that may have occurred along the way. I would not regard these as good customers.

In Japan, for example, in the Keiretsu – the supplier networks of the major manufacturers – suppliers are appreciated, helped and long-term relationships fostered, with the understanding the the supplier-customer relationship thrives with long-term commitment and mutual effort.

Keiretsu member companies own small portions of the shares in each other’s companies…; this system helps insulate each company from stock market fluctuations and takeover attempts, thus enabling long-term planning in innovative projects. It is a key element of the automotive industry in Japan.

Few indeed are the Western companies that see value in this kind of arrangement, and fewer still the companies that act to cement long-term relationships with software suppliers.

Market for Lemons

What this means in practice is that the market for software services (e.g. custom software development) is effectively a Market for Lemons.

And what that means, is that software suppliers will rarely receive a fair price for their labours. Lacking appreciation of quality, buyers will automatically assume that whatever they are buying is a Lemon, and discount the price accordingly.

This is as much true for software supplied in-house by e.g. the IT department to the rest of the organisation as it is for software supplied by external commercial software development services (e.g. software houses)

Finally, the Point

So why am I writing this post? For three main reasons, really:

  • To encourage those organisations buying software services, either from external third parties or internal e.g. IT departments, to focus some effort on better understanding good service / quality software from the dross. A Market for Lemons affords benefits to no one.
  • To remind suppliers to choose their customers carefully, and where that is infeasible, to pay some attention to managing customers’ expectations and educating them as to the quality aspects of whet they’re receiving.
  • [TBD – Can you guess?]

– Bob

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