Short-term Benefits in the Information Service business

It’s a fact that companies and their management have money in mind. However, they’re many ways to achieve this goal. In my short career as an employee, I’ve been faced with two strategies, the short-term one and the long-term one.

Here are some examples I’ve been directly confronted with:

• A manager sends a developer on an uninteresting mission a long way from home. At first, he tells the developer it won’t last more than 3 months but in effect, it lasts more than one year. Results: the manager meets his objectives and gains his bonus, the developer is demotivated and talks very negatively about his mission (and about the manager and the company as well)
• A business developer bids for and wins a contract regarding a proprietary and obsolete technology that needs maintenance. Results: the business developer gains a hefty chunk of the contract money, developers who are tasked with the maintenance become increasingly irrelevant regarding mainstream technology
• Coming to a new company, a developer is proposed a catalog to choose his laptop from. The catalog contains real-life (read “not outdated”) laptops (such as Mac Book Pro) as well as real-life hardware (8Gb RAM). Results: the developer is highly motivated to begin with, the company pays the hardware a little more than lower-grade one
• A developer informs his boss there’s been an error in his previous payslip: overtime he has made the previous month has been paid again. The boss says it’s ok and that the bonus is now becoming permanently included in his salary. Results: the developer is happily surprised and tells his friends, the boss pays extra salary each month.

What these experience have in common is a trade-off between short-term gain and long-term (or middle-term) gain.

In the first two examples, the higher-up meets his objectives thus ensuring short-term profit. In the first example, this is balanced with trust issues (and negative word-of-mouth); in the second example with a sharp decrease in human resources asset. On the contrary, the two last examples balance marginally higher costs with loyalty and good publicity from the developer.

I understand that stakeholders want short-term profit. What I fail to understand is that in the long run, it decreases company value: when all you have in your IS company is a bunch of demotivated developers looking to jump out of the train, you can have all the contracts in the world, you won’t be able to deliver, period. Of course you could invest massively in recruiting, but what’s the added value?

Kepping your developers happy and motivated has a couple long-term consequences that have definite value:

• Developers will speak highly of the company, thus making the company more attractive to fellow developers
• Developers will speak highly of the company, thus building trust between the company’s customers and the company itself
• Developers will be more motivated, thus more productive by themselves
• Developers will be more motivated, hence more collaborative (and so even more productive)
• etc.

The problem lies in that those benefits are hardly quantifiable and translatable into cash equivalent by any means. Average companies will likely ignore them while smart ones will build upon them. Are you working for the first kind or the second?

Note 1: this article reflects my experience in France and Switzerland. Maybe it’s different in other European countries and North America?
Note 2: in Paris (France), there’s a recent trend of companies caring more about long-term profits. I can only hope it will get stronger