I recently oversaw a project that had me working with a distributed team (in the US, Europe and India). The same project also worked exclusively with independent contractors, whose work was hired on an assignment basis. The work was for a new web-startup. I have some concerns about such an arrangement being used for a new, innovative project. I’m going to attempt to explain my concerns in this essay.
First, I’ll talk about using freelance, independent contractors for a web start-up. The seeming advantage of having no permanent employees is that the operation has no fixed costs. An advantage? It depends. If you really want to avoid all fixed costs, simply close your business. Being in business means having expenses, the real issue is whether you are making a profit – does the labor you hire help you make more money than the cost of the labor?
The project I oversaw moved slowly, and some of the slowness can be attributed to the freelance nature of the labor we hired. The programmers would do whatever we asked them to, and they all did high quality work. However, because we made no long term commitment to them, they of course had to keep busy with other work. Sometimes we needed them but they were busy with their other clients. Also, they were not part of the conversations we were having in New York City, so they lacked a broad overview of the project and its goals, so they could not easily take the initiative to move ahead on their own.
If a project has no particular deadline, or if it is simple, then working with independent contractors is a great way to keep fixed costs low. However, if a project is suppose to move fast, or if it needs to achieve certain deadlines, and especially if it is very complex, then I would recommend against the use of this kind of arrangement. For fast moving, complex projects, you need full-time, committed programmers.
Now I’ll offer some thoughts about agility, and the importance of physical proximity.
Agile practices have 2 main hopes:
1.) to allow a fast-forming team to quickly become highly-productive.
2.) to control costs by ensuring discipline in regards to goals and deadlines.
I used the word “hopes” instead of “goals” because the ultimate aim of agile practices is more of an ideal to be aspired to rather than a reality that can be achieved, and by that, all I mean is that we are constantly learning more about what these practices truly mean, and in the future we can reasonably hope to do better than we are doing today. I’m speaking for the entire profession of computer programming when I say this.
I am in the United States, in New York City. I’ve been working on websites since 1996. I’ve worked on many small teams, and over the years I’ve used some agile practices, such as frequent iterations, frequent in-person consultations with the client, and unit tests. When I started on this last project, I first thought it would offer the chance to experiment with a fuller range of agile practices. However, I came to realize that most agile practices depend on physical proximity. The programmers need to be able to meet, preferably every day (”every day” in the sense of casual conversation, not “every day” in the sense of “let’s have a formal meeting”). Consider some of these practices:
1.) pair programming (two people looking at the same screen, checking for errors)
2.) the use of index cards to map objects
3.) stand up meetings (meetings kept short and lively because everyone is standing)
None of these make any sense if the programmers are in different countries.
I’d also add code reviews. One can do a code review at a distance, but I think in person is much more effective. And code reviews don’t make much sense when you are working with independent contractors. Code reviews are meant to develop each programmer’s long-term abilities, and also they are useful for helping the whole team agree on certain programming habits. But one would have to have a long-term relationship with the programmers before doing such a thing would make sense.
Programming is an art, and art needs passion. Many agile practices are aimed at soliciting a greater emotional commitment from the programmers. I might write “For an agile project to go well, the programmers need to emotionally commit to it” but that isn’t quite right. What would be more correct would be “For an agile project to go well, the programmers need to emotionally commit to their own professional ideal.” That is, they need to care about the craft of programming. They need to be constantly pushing themselves to always be better programmers.
I would never argue that agile practices are needed on every project. If a project is routine, then long-distance, non-agile practices might be perfect. For instance, suppose you decide to launch a new online magazine. After researching your options, you decide you will use WordPress as the software that powers your site. I’d suggest you find a good designer, local to you, and work with them to come up with the design. Once you have the design, the rest of the process is mundane. You could certainly hire a team in India to install WordPress and implement your design for you. And you would not need agile practices for such a project. In fact, you do not even need great programmers for such a task. Mediocre programmers can do a reasonable job with tasks that are standard, routine and mundane.
However, I would argue that agile practices are needed at projects that need to be fast moving (this would include most start-ups), or at any project where the aim is to create something altogether new and unique. If your project is venturing out into the great unknown, if you are going where no one has ever gone before, you will need a team of excellent, committed adventurers to go along with you.
Let’s look at the history of agile practices, going back centuries.
In the 1990s, DARPA invested some money in agile research, which lead to such books as that by Goranson: Agile Virtual Enterprises.
Goranson looks back at the whaling industry of the mid-1800s and examines how 2 small towns in Massachusetts were able to capture 90% of the whaling industry, when most of the actual hunting was done in the South Pacific. He found that the patterns of hiring and team building had much in common with what start-ups aspire to nowadays – a tight-knit, fast-forming team of highly competent professionals held together by a commonly understood body of professional ethics and expectations.
Goranson emphasizes the role of geographical concentration (and therefore physical proximity), to the evolution of culturally unique traits, leading to competitive advantages:
Geographical and professional isolation allowed for the evolution of a unique and very effective system which for many years put a brand new, fairly high risk/high payoff, virtual enterprise in the water at the rate of one every two weeks. The return of each whaling expedition triggered the formation of another. It was considered an invitation to bad luck to reuse the same combination of partners, so during the six to nine months it took to recondition the ship for another voyage, the owner of the boat assembled a new group of key players who would join him in setting up the basic physical and social conditions needed for a successful venture.
The primary partners required to launch a voyage consisted of a ship owner, an insurer (of the ship cargo), a provisioning financier to supply the expedition with food and other consumables, a captain, and often a manufacturer who agreed to buy the oil at a set price. This component of the partnership was formed in the first couple of months, the partners being determined partially by availability.
A month or less before the ship was ready to sail, a secondary group of partners, the crew, was formed. They shared a distinct cultural background; almost none of them had, or would ever, serve in the navy or the merchant marine. This professional distinctiveness, coupled with an intense geographical concentration, fostered the development of a unique culture based on the virtual enterprise.
Goranson uses the word “agility” to refer to fast forming supply chains, and also (relatedly) the ability to overcome the administrative costs that might keep a new supply chain from forming (in the early 90s, when DARPA funded Goranson’s work, one problem seemed especially prevalent: the fact that the most innovative technologies in America were being developed at small start-ups, and yet large Fortune 500 companies were having difficulty integrating small start-ups into their supply chains, because of the administrative hassles of developing relationships with a multitude of small companies). He uses the word “virtual” to refer to an organization that is project-specific and not meant to last. For instance, in the modern context, the best examples of agile, virtual enterprises are in the movie industry. Each movie is its own independent business, and the production of each movie entails the fast formation of a team of highly competent professionals who understand they are being hired to work on a specific, time-limited project, which will disband as soon as the project is done.
Whaling ships and modern web start-ups share certain traits::
Every voyage included a team of skilled craftsmen – carpenter, blacksmith, cooper, and a sailmaker (often a boatwright, a rigger and a cook were also in this class) – whose combined expertise allowed the enterprise to respond effectively to a broad range of situations. Each of these professionals, along with the tools, supplies, and sometimes apprentices they brought abroad, formed an essentially self-contained business which was integrated into the enterprise as a whole. In these cases, it was not just the person who signed up for the voyage, but their business. From the shipowner to the cook, everyone was paid with a pre-arranged percentage of the take.
In other words, every ship was its own little agile, fast-forming start-up.
Goranson’s use of the word “agility” is somewhat different than the way the word “agility” is used by its proponents in the software industry, but the meaning of the word overlaps for both groups in the sense of “the ability to get supply from a new source quickly”. Consider the words of the Agility Manifesto:
We have come to value:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
With only minor tweaks of the wording, you could use the above as a statement of the professional culture that pervades Hollywood. The emphasis is on doing what is necessary to get something working into production fast. By contrast, the slow moving process of low trust, heavily documented, laborious negotiated, carefully vetted contracts are anathema in this context.
(Stephen M. R. Covey has a written a book called The Speed Of Trust, which does an excellent job explaining how much a project speeds up when the participants can trust each other, and therefore how important it is to work toward facilitating the long-term development of trust in any business relationship.)
Goranson emphasized that one of the legal traditions that the whaling industry and movie industry share is a very strong reliance on verbal contracts, as opposed to written contracts and detailed documentation. Goranson points to the bankruptcy of Kim Bassinger as an outstanding example of the importance given to verbal contracts in the movie industry. (Bassinger met some producers for dinner to discuss the possibility of her starring in their movie Boxing Helena. She promised, over dinner, to star in the movie. When she later backed out of her promise, they were able to sue her for $8 million.) The Agility Manifesto de-emphasizes contracts, but still puts a heavy emphasis on the importance of verbal communication, a point made clear by “Customer collaboration over contract negotiation”.
Goranson emphasizes the role that geographical concentration played in allowing this culture of virtual enterprises to flourish. I believe that geographic concentration still plays the predominate role in allowing the continued evolution of unique agile practices.
I’ve had it suggested to me that the cheapness of overseas programmers (in places like India) can speed a project up, simply because, since they are cheap, you can hire a lot more of them. This is flatly contradicted by Fred Brooks thesis in The Mythical Man-Month. When the System 360 project was running late at IBM, Brooks tried to speed up the project by adding more programmers to the team. But he found that the additional programmers actually slowed the project down. Each new programmer became one more person who needed to be kept up to date with the latest documentation – and every few additional programmers required that a new manager be brought into the project to manage them. The growing complexity of communication across a growing mass of workers helped to slow the project down, rather than speed it up.
In this sense, the cheapness of overseas programmers actually encourages bad habits. Because they are cheap, you may get tricked into thinking that you can hire a lot of them. But the more you hire, the more time you will need to invest trying to keep everyone unified in their understanding of what the code is suppose to do. And after a certain number, you’ll need to start hiring additional managers.
If you are a project manager, and you rely on the cheapness of your programmers to keep a project’s costs under control, then you need to fire yourself. There is only one correct way to keep costs under control, and that is through disciplined focus on goals and deadlines. Agile practices have evolved to make it easier to keep complex projects on track. To the extent that geography matters to agile practices, then geography matters for the goals and deadlines of your project.
Nicole Radziwill approaches this subject from a different angle, but she makes a similar point about the importance of geography:
Space does matter. We know this when we are designing facilities and plant layouts, for example, because one of our common considerations is to minimize traffic between areas and departments. More often than not, we do this to minimize the time spent moving people or equipment around a plant, so that time is not wasted. But the same concept could apply to our supply chains. Why aren’t we minimizing the time that components or goods spend traveling through the supply chain, when it could lead to reductions in energy costs? Furthermore, why aren’t we shortening our supply chains to strengthen local and regional businesses, and train the next generation of skilled workers (who can actually do something useful for the regional economy)?
The logic has been something like this: energy is cheap, therefore transportation is cheap, and transportation is easily available and accessible through third-party providers like FedEx and UPS. But I can’t shake the feeling that “supply chain status quo” is not good for quality in the long-term – because it encourages us to source the products and components that are most affordable, rather than the ones that might help us cultivate a quality consciousness in our local areas.
To offer a partial answer to the question that Nicole poses, I think the reason why products get sourced to where they are most affordable (at the current moment, in the short term) is that people tend to fear losses more than they value potential gains. There is an abundant literature on this subject. In regards to sourcing, buyers go with what is cheapest in the short-term, rather than developing long-term innovations that might lead to much greater gains in the future. Consider:
Prospect theory… argues that people center their expectations around a variable and moveable reference point. The reference point is most easily thought of as the status quo, though it is not always so. In most situations, people are more likely to ensure that they preserve their current situation, than to risk losses by seeking potential improvements. Indeed, people tend to sacrifice a great deal in order to maintain their current situation. As Levy notes, “people tend to be risk-averse in choices among gains, but risk acceptant with respect to losses.” This is often the problem in intractable conflicts; the risks required to resolve the conflict seem much too great compared to the potential losses. This sort of framing is what leads ultimately to hurting stalemates. Loss-oriented framing is, ultimately, this tendency to minimize losses while missing opportunities to improve one’s situation.
The status quo of any culture, in the short-term, can be regarded as an under-developed blandness, relative to the unknown brilliance of some unknown future innovation. It takes a leap of faith to believe in that unknown future brilliance. It is easier, and safer, to go with what is cheapest in the short-term. This is cowardice, but it is extremely common. True business leadership is rare.
In terms of developing some unknown future brilliance, I’m thinking especially of those cultural traits that, in part, give rise to comparative advantage. There is, at this point, a mountain of literature about the advantages that agile teams have when it comes to fast-forming, fast-moving projects. Agility is a cultural innovation that deserves further refinement, and each nation, depending on its legal traditions and its labor laws, is going to develop agility in a unique direction. The future development of these potential innovations is undermined by the extended supply chains that send work to distant parts of the world. I’m arguing that, just as Goranson stressed geographical isolation as playing a role in the evolution of a uniquely competitive culture in Massachusetts, then the dispersal of work from a geographic center must lead to the opposite – the dissolution of uniquely competitive cultural traits.
I can imagine someone reading this essay and raising certain objections. What about Linux? What about Apache? Certain open source projects have been successful with teams that are scattered all over the world. But then, these were not fast moving projects. Teams that never meet in-person can become highly productive, but it takes years. And by the time these projects hit their strides, much of the core team had, in fact, traveled to different countries and met each other in-person.
One other fact argues for the importance of physical proximity. For a team to be highly productive, it needs to have both high levels of communication and high levels of trust. Body language is important to trust. In a normal, in-person conversation, the bulk of the communication is non-verbal. Below I’m going to quote from an article that is aimed at teaching salespeople how to make more sales. On a start-up, the team members are not trying to sell products to each other, but they are often in the position of having to try to sell a given strategy to each other. One team member may feel that their site should be pitched to consumers, another team member may feel strongly that the site needs to be pitched to businesses. The success of the start-up depends on all of the team members being to able to listen to all points of view, take in the maximum amount of information and opinion, and reach the best decision.
It really doesn’t matter how knowledgeable you are about your product line or how many closing techniques you have mastered, unless you earn your prospect’s trust and confidence you’re not going to make the sale.
…Body language is a mixture of movement, posture and tone of voice. Research indicates that in a face-to-face conversation, more than 70 percent of our communication is nonverbal.
Our body language reveals our deepest feelings and hidden thoughts to total strangers. In addition, nonverbal communication has a much greater impact and reliability than the spoken word. Therefore, if your prospect’s words are incongruent with his or her body language gestures, you would be wise to rely on the body language as a more accurate reflection of their true feelings.
On a slightly humorous note, I’d like to offer a movie review. The best movie ever made about an agile, virtual enterprise was Akira Kurosawa’s 1954 movie, The Seven Samurai. Of course we need to translate the movie into business-speak before the comparison becomes clear. I’m only partly kidding when I write this. I really do believe this movie offers a good example of some of the above ideas.
In the opening scene, we meet the client (poor village farmers). We then come to see their problem: bandits who plan to raid the village as soon as the harvest is in. The villagers then go to a big city to hire a contractor who can solve this problem for them. They meet Kambei, a samurai. Though the villagers can pay very little, he takes pity on them and agrees to help them. He therefore steps into the role of project manager. He must then assemble a team, and this part is pure agile enterprise in practice. The city is full of many samurai, and out of this sea of potential recruits, a group of 6 is selected. These are highly skilled workers with a strong emotional commitment to their own professional ideal – that is, they all strive to be the best samurai that they can be. The 7 samurai then set out for the village. They almost instantly form a tight-knit, highly cohesive team, because they share a commonly understood body of professional ethics and expectations. The enterprise is “virtual” in the sense that Goranson uses the word – it is project-specific, and will disband as soon as the project is complete. At the village, the samurai work in close consultation with the client to ensure the goals of the project (the defense of the village). Finally, after a decisive fight, the goals of the project are achieved – the bandits are defeated. The client is happy. The surviving samurai then disband.
In this movie, the samurai are recruited in the same fashion as sailors might have been recruited for a whaling ship, or the same way that a computer programmer might be recruited for a web start-up.
To recap, my current experience teaches me that:
1.) Agile teams should be small (as per Brooks).
2.) They should meet in person several times a week.
3.) Everyone on the team must be highly competent.
4.) Everyone on the team must be emotionally committed to their own professional ideal.
5.) For the duration of the project, everyone on the team should be full-time
Furthermore, on projects that aim to be unique or innovative, or on projects that are complex, or on projects that need to be fast-moving, I will be discouraging clients from these practices:
1.) part-time, independent contractors
2.) distributed teams, with workers geographically dispersed.
One last point, unrelated to the rest. A number of people have said to me that they feel the cheapness of overseas workers (in places like India) is driving down wages in America. I do not believe this is true. Wages in America have declined over the last 40 years, but that is because the American people have themselves become unwilling to invest in their own country. Consider the fact that in 1955 the average middle class family saved 17% of their income, but in 2000 the US savings rate hit 0%. Wages will decline in any nation that does not invest in itself. By contrast, consider Germany, which has a high investment rate. Not only does Germany have higher average wages than America, it has also had more economic growth over the last 30 years. And right now China is saving and re-investing 40% of its income. I do not know a single American family that saves 40% of its income. Most of my friends, even those with college educations and good paying jobs, only save 10% or 15% of their income. It is wrong for Americans to first engage in an orgy of over-consumption and under-investment, and then blame poor nations like India and China for the obvious problems that must result from such reckless behavior.
