Wednesday, March 18, 2015

Goliath vs. David - Observations from the Corporate R&D World

No, this isn't about Netanyahu (David) vs. Obama (Goliath).  It is my observations of large companies getting thrashed by the smaller ones.  Most of my career has been in the small companies with the startup spirit, so the David perspective is the one I am most familiar with.  My job was to thrash, not to be thrashed.  In recent years, I have moved to the large behemoth organization, so now I get to see first hand the problems of the Goliath mentality.

Getting slightly more specific, there is a large R&D organization with the best equipment in the world which tends to hire the best and the brightest from top universities, like MIT and Caltech.  They were recently in competition with a startup, which being short on money and in the middle of nowhere with almost no resources hired a typical engineer who liked the business and was willing to move to the middle of the desert.  It really wasn't a competition, since both organizations were hired to do the same problem by a government agency.  Yet it was (is) a competition since it is a high visibility contract and both organizations are doing their best to show off their stuff.  The large organization assigned Ph.d's who specialized in the problem, whereas the small organization's engineer is a bit out of his experience.  How has it gone?

The lone engineer from the small outfit turned out hundreds of difficult simulations over a nine month period, while the large organization failed to turn out anything for the first few months, then produced some one-off mediocre simulations.  Being from the small company environment, I have offered to save the necks of my big company colleagues several times, but they have steadfastly refused, while always insisting they were on the verge of being able to compete, only to fail again and again.  Since I really don't want them to fail, I have pushed harder, but anger is all I have gotten in return.  There is another set of anger directed at the young man at the startup who they are convinced is cheating outlandishly somehow, but they can't figure out quite how.

It is a little too early for the full post-mortem, but here are my thoughts:

The young man from the small organization knew he was a loner.  We will call him the Lone Engineer, or LE.  But LE had some friends at a small software vendor who knew how to solve parts of the problem.  They agreed to help Lone Engineer make the computer models and LE returned the favor with marketing support for their product, which I will call The Widget.  LE managed to convince another large organization to donate some computer time and was rapidly off and running.  Since this was a marketing exercise in addition to an engineering one, Lone Engineer gave credit to The Widget for his success.  From my perspective, the key feature here wasn't The Widget, but rather having friends and knowing what friends are for.  Friendship + talent + energy are the driving forces behind a startup.  When the friendship fails, which is usually due to people behaving badly, then the company ceases to be a startup.  The fact that the The Widget was used was almost incidental.  It could have been any similar product, but the friends needed just to agree on something so that they could work together.

The large organization failed with their equivalent to The Widget, which was obtained from a third party so workarounds weren't possible.  I wasn't immediately part of this section of the organization, but I had also produced a version of The Widget, and demonstrated my ability to solve the problem.  My efforts to help were all rebuffed. There are also free products on the internet that would do the job as well.  Rather than exploiting friendly relations (which were free in this case), however, the organization persisted in failure when there was clearly no hope without changing directions.  What did provide some hope to the big organization was a marketing pitch from Lone Engineer claiming that his big secret to success was The Widget, rather than basic relational skills regarding friends.  Thus, Big R&D Incorporated invested in The Widget, but then proceeded to struggle and fail for several more months.  Then a sudden inspiration occurred:  We need formal training on The Widget!  Never mind that the original marketing pitch was that The Widget would solve all problems with no effort.  So the Vendor of The Widget was paid to do more training, and more resources were invested, so that the total cost to Big R&D Incorporated now probably exceeds the development cost of The Widget.  I am not sure how this will come out as the saga continues, but it seems to me that Lone Engineer's friends, since they work for the software vendor, will always be ahead of Big R&D Incorporated (BRD), and that BRD's best hope in following this path is that they can convince the government sponsor that they can do industry standard work at 10X the time delay and 100X the cost, using people who are world-class experts, rather than Gen-Y losers.

So why post on this now?  Because BRD just issued a press release talking of their contribution to humanity as a result of winning this contract.  In the end, it will be all about politics, so Goliath is still standing strong.

No comments: