How technology loses out in companies, countries & continents and what to do about it

tags: Outsourcing Deskilling

Notes

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Notes

a lot of time within these telecommunication companies. These are basically all the largest telecommunication companies in Europe, and some in the US.

over the past 20 years, I’ve seen the extremely sad decline of all these communications companies into branding and ﬁnancing bureaus,

no one can buy my so�tware anymore, because none of these telecommunications companies are technical companies anymore.

How technical do we need to stay to remain viable as a company or a country or a continent?

If you outsource too much? Is there a point where you cannot go back and relearn how actually making things work?

how does it happen that people sell toasters this bad?

If you are a toaster manufacturer, it is clear that you need to make some of these things in order to be a toaster manufacturer. But you don’t need to make all the things.

what is le�t as a toaster manufacturer is that you maintain the logo, you maintain the brand, you write the manuals, you do the logistics of shipping the toaster, and you’re going to be an actual credible toaster company without doing any of the things that are actually around making toast.

So actually, there’s a runaway process where getting the bread toasted just right is a matter of seconds. So it’s actually not that easy to make a good toaster.

you need extremely strong quality assurance

if you only own the logo, and write the manual and do the logistics, can you still innovate?

But we still have this room full of people that are experts at toasters. And we don’t allow them to make any toasters. They’re not allowed actually to do anything. But on paper, they are the biggest toaster experts.

The smart people will not work for your company, because you have turned into a marketing and ﬁnancing exercise.

If as a company you have outsourced too much. No good engineer will still want to work for your company.

They were even telling the manufacturers look, we only put up requirements, we don’t actually tell you what to do just build us this 787 Dreamliner. And it didn’t work. And they nearly went bankrupt over it. And in the course of a lawsuit, this paper was ﬁled.

if you outsource production, it does not actually become any easier because the thing you are no longer doing now has to be done by someone else.

So as you do less, then the e�fort in doing something becomes relatively speaking far larger (and relatively more expensive), because your company has no expertise le�t in actually doing any things.

it should be obvious that a company cannot control its own destiny, if it creates less than 10% of the products itself.

All over Europe, this is happening simultaneously, where we’re saying, look, we’re not that much into actually building things anymore.

you can not be an intellectual property continent

In the end, you cannot survive if all you create is intellectual property.

And you can wonder what do they do, and actually what they do is ﬁnancing.

We barely develop any so�tware here anymore.

So we have found ways that you can ﬁnance all kinds of things without paying taxes and, and driving up your stock price to tremendous heights. And this, of course, is not anything real.

the main thing we do is we get actual experts in Asia, to design things for us and a manufacturer of them for us.

if you have decided that as a company, that you’re only going to source things, realize that the company that is then building your stu�f, they’re not going to innovate, they’re just going to build exactly what you asked for.

If you separate the thinking about things from the doing of things, then innovation will su�fer.

that’s very expensive, because you might just have wasted like, like 500 person years of development work.

third parties that take on the risk of toaster development or whatever,

these technical people I don’t know, give up. So they just lose interest, they’re no longer performing, they’re no longer innovating. They’re no longer happy.

you go through this cycle a few times where you say, look, this is disappointing, we’re just going to buy this stu�f from now on, you end up with a company that consists of a pile of contracts.

your company knows so little about what it does that if you would ask a random person on the street for advice on the thing that your company makes, they are more likely to provide correct answers than the people that actually work for the company.

On shareholders, the people that care about the company, they should, in theory not be happy if you turn your company into this zombie pile of contracts that has no technical skills le�t. Turns out that shareholders are actually very happy with that.

in the longer term, they are not strategically interested in the company, because if the company doesn’t do well, they will invest in another company.

there was a clear point in time when all telecommunications companies decided they had to stop being telecommunications companies and become outsourcing ﬁrms. And you can trace that back to a bunch of reports from McKinsey, and PriceWaterhouseCoopers.

Why are telecommunication companies but even also aerospace manufacturers and defense companies, why does the board consists of lawyers and art students

The reason that we are not in that room, the reason why technical decisions are not getting made is that we ourselves as technical people are di�ﬁcult. We are not rational about stu�f.

the technical people are all convinced that the management people are all stupid.

we have alienated senior management

also we hate meetings. We hate sitting in meetings, we hate doing actual management things.

you can sort of measure, how many forms do we have to ﬁll out, how many change advisory boards do I have to convince before something happens.

if you think your company is dumbing down, it’s probably true, and there’s probably almost nothing you can do about it.

bet big, start your own company. There is so much investment money in Europe right now