Back in April I wrote a six-part series of columns on troubles at IBM that was read by more than three million people. Months later I’m still getting ripples of response to those columns, which I followed with a couple updates. There is a very high level of pain in these responses that tells me I should do a better job of explaining the dynamics of the underlying issues not only for IBM but for IT in general in the USA. It comes down to class warfare.
Warfare, to be clear, isn’t genocide. There are IT people who would have me believe that they are complete victims, powerless against the death squads of corporate America. But that’s not the way it is. There’s plenty of power and plenty of bad will and plenty of ignorance to go around on all sides here. Generally speaking, though, the topic is complex enough that it needs real explaining — explaining we’re unlikely to get elsewhere in an election year dominated by sound bites.
This is not just about IBM. It is about the culture of large corporations today, not yesterday.
From the large corporation side the issues are cutting costs, raising revenues, increasing productivity, earnings-per-share, and ultimately the price of company stock. Nothing else matters. Old corporate slogans and promises implied in employee handbooks from 1990 have no bearing in the present. It would be nice if companies kept their commitments, but they don’t. Corporate needs change over time. And with rare exceptions for truly criminal behavior we probably just have to accept this and move on.
From the perspective of IT professionals there’s a betrayal of trust that stems from the attempted commoditization of their function. What once were people now are resources and like any commodity the underlying idea is that a ton of IT here is exactly comparable to a ton of IT there.
So there’s a tug-of-war between corporate ambitions and personal goals. And to complicate things further this struggle is taking place on a playing field that also involves government, finance, and media — all entities that deal mainly in stereotypes, generalities, and bull shit.
Wall Street just wants the numbers to work out. Wall Street can win by going long or going short so all they really need is change. This further depersonalizes the struggle that’s going on because the traders who benefit from those stock shifts don’t really care what’s happening or why. To Wall Street there is no such thing as a bad (or good) business, that is until some CEO goes to jail.
Government wants improvement and overall prosperity but their tools for accomplishing this aren’t very precise and the culture of government is both corrupt and stupid. If government wasn’t corrupt and wasn’t stupid, lobbyists would have no impact. Smart government wouldn’t need lobbyists to explain things. Uncorrupt government wouldn’t be open to manipulation by special interests. Worst of all the political game seems to have devolved to solely being one of spin — turning the events of the day to the disadvantage of opponents without regard to what’s right or real.
And the media tends to just repeat what it is told, tacking ads to the content. There’s a cynicism in the media combined with an inability to give more than 15 minutes of real attention to anything that isn’t a celebrity divorce resulting in little information or useful perspective in the news.
There are huge economic forces at work here — far bigger than many people or institutions recognize. Right now, for example, there are hundreds of thousands of experienced IT workers in the USA who are unemployed at the exact moment when big corporate America is screaming for relaxed immigration rules to deal with a critical shortage of IT talent.
How can this be? Do we have an IT glut or an IT shortage?
Like any commodity, the answer to this question generally comes down to delivered cost. If you are willing to pay $100 per barrel of oil there’s plenty of the stuff to be purchased. There’s a glut of $100 oil. But if you will only pay $10 per barrel of oil there’s a critical shortage. In fact at $10 America probably has no oil at all.
In America right now there is a glut of $80,000-and-above IT workers and a shortage of $40,000-and-below IT workers.
Remember that $80,000-and-above population comes with a surcharge for benefits that may not equally apply to the $40,000-and-below crowd, especially if those are overseas or in this country temporarily. A good portion of that surcharge relates to costs that increase with age, so older workers are more expensive than younger workers.
It’s illegal to discriminate based on age but not illegal to discriminate based on cost, yet one is a proxy for the other. So this is not just class warfare, it is generational warfare.
Yet government and media are too stupid to understand that.
There are some realities of IT that intervene here, creating problems for both sides. IT is a notoriously inefficient profession, for one. At its lowest levels there’s typically a very poor use of labor that might well be vulnerable to foreign assault. Exporting a crappy help desk to Pakistan might not be a good idea, but if the current standard is bad enough then Pakistan is unlikely to be worse. In short there are a lot of incompetent IT people in every country.
Toward the top end of IT the value of individual contributors becomes extreme. There are many IT organizations where certain critical functions are dependent on a single worker. These are complex or arcane tasks being done by unique individuals. You know the type. Every organization needs more of them and it is easy to justify looking wherever — even overseas — to find more. It’s at this level where the commodity argument breaks down.
What we see at IBM and most of its competitors is a sales-oriented culture (get the deal — and the commission — at any cost) that sees technical talent as fungible, yet sometimes it isn’t fungible at all. There are many instances where IT resources can’t be replaced ton-for-ton because in the whole world there is less than a ton of what’s needed.
From the big corporate perspective we discard local resources and replace them with remote or imported resources. This might work if there were no cultural, language, or experience differences, but there are. There are differences based on familiarity with the job at hand. All these are ignored by CEOs who are operating at a level of abstraction bordering on delusion. And nobody below these CEOs sees any margin in telling them the truth.
Against this we have a cadre of IT workers who have been slowly boiled like frogs put into a cold pot. By the time they realize what’s happened these people are cooked. They are not just resentful but in many cases resentful and useless, having been so damaged by their work experience. They just want things to go back the way there were but this will never happen.
So we have a standoff. Corporate America has, for the most part, chosen a poor path when it comes to IT labor issues, but CEOs aren’t into soul-searching and nobody can turn back the clock. Labor, in turn, longs for a fantasy of their own — the good old days.
The only answer that makes any sense is innovation — a word that neither side uses properly, ever.
The only way out of this mess is to innovate ourselves into a better future.
But that’s for some future column. This one’s long enough.