It's Always About the People (Even in Tech)

By Avi Deitcher

Two months ago, I posted an article about a United Airlines series of failures that, if not so painful for their paying customers - and their employees too - would be laughable.

Yesterday, I had the pleasure of reading an interview with the legendary Gordon Bethune, who turned around Continental Airlines in a single year, from a loss of $600MM in FY1994 to a profit of $225MM in FY1995.

While it is easy to view the interview as taking aim at current United Continental CEO, Jeff Smisek, whom Bethune hired back in the 1990s, albeit as a lawyer, not as general manager of the business, (disclosure: I wish he were taking those shots, as it might indicate an intention to return and save the company from its severe mismanagement), there are some really important lessons for managers, especially at tech firms.

Everything Bethune says all boils down to one thing: it is all about your people.

A company succeeds or fails on the ability of the CEO to hire great people who can lead people to do great things. Yes, you need sufficient capital, and a product customers want, and pricing that attracts those customers profitably, and all of the necessary ingredients to run the business, but it is all about helping your employees serve their customers.

What does all of this have to do with technology businesses? Everything.

We in the technology world tend to get caught up in one of two related narrow mindsets:

  1. The engineer: It is all about the cool technology.
  2. The investor: It is all about the ROI, or market share, or finances.

Both of those matter, but both focus too narrowly on the numbers, something that can be put in a formula, at the expense of the people. True, without the product you cannot sell anything, and without great technology, you cannot hire the A-list people who will make it even better, reduce your costs, respond quickly, scale and innovate to better growth. Without the investment, you don't have the cash to hire those great people, and build the product, and sell to the market.

But when it comes to running the business, which is what you do every single day, it is all about the people.

I have worked with multiple clients who have had scale and stability issues with their online or cloud or Software-as-a-Service offering.

  • Sometimes, I find the problem in people who are not up to snuff. We simply have not hired the right calibre of people.
  • Most of the time, there is some technology problem. We are using old architectures, or the wrong technology, or lacking some basic processes or tools.
  • Always there is a management problem.

After fixing the immediate issue, I always ask, "you have hired great people. With such good people, how did we get into this situation in the first place?" Inevitably, the answer is that either the team lacks the support it needs to do it right, or it has incentives that unwittingly deter them from doing it right.

Does this mean management is bad? Of course not! After all, they were sufficiently concerned and dedicated to the company to want it to succeed, open-minded enough to ask for my outside help, and willing, in almost every case, to take it.

It means management is learning, which is precisely what they should be doing. The smartest executive of all is the one who says:

  1. I successfully got us to this point.
  2. We have issues, I am hiring outside help to solve our technology challenges.
  3. I have learned from that help how we got into this situation and what to do better.
  4. Now let that help assist us in putting in place support, incentive and risk-taking structures that keep us from getting bogged down again.

Which kind of management are you? Ask us to help you find out.