How to prevent dispute in IT companies

Common problems

Preface: quarrels tend to occur in IT companies

Working in an IT company, you may occasionally encounter quarrels. We often hear stories of co-founders leaving a start-up company due to a dispute. It is also rather common in publicly traded companies to see a rift between old employees and new employees as a result of rapid expansion.

This kind of story is common to all types of work, so it is not limited to IT companies. However, I have the impression that it tends to happen in many cases where the company is relatively small, labor (knowledge)-intensive, and not in a stable period.

How can we prevent dispute in IT companies? I would like to address some of the issues.

The continuity of the organization is precious. Other priorities can be lowered.

My basic principle is that the continuation of the organization is more important than others.

The PayPal mafia (former PayPal officials) like Eron Musk have many success stories, but even in the early days of PayPal, they quarrelled about technological choices and decided to adopt technologies that were not the best because it was more important to get along with them than to choose the best technological option.

Perhaps it may not good from an engineer's point of view, but I think it is better to prioritize the avoidance of discord among team members than excellent technology selection except for security.

What causes quarrels?

There are many reasons for quarrels, but the following are just a few that come to mind.

• Full stack rather than expertise is required
• Sudden policy changes due to pivots
• Assumes too high an average person's ability
• The percentage of hands-on people is too high
• Lack of transparency in information sharing
• Dissatisfaction with benefits

The smaller the size of the company, the more stress is derived from business instability, and the larger the company, the more dissatisfaction there is with the rigidity of the structure, or the fact that the neighbor department is a government office.

Smaller scale causes more stress from business instability

• Full stack rather than expertise is required
• Sudden policy changes due to pivots

is a case of quarrels that occur more in the case of new businesses.

In many cases, only the minimum number of staff is allocated to a new business, whether it is a startup or a large company, because it is not known whether the investment will be profitable or not.

Some people find that moving to a smaller organization increases the scope of their duties, and the need to pick up the ball between them becomes stressful.

It can also lead to frustration as a result of changes in what we sell or make as a result of pivoting from the hypotheses we had in mind.

The best people don't come to a venture

• Assumes too high an average person's ability
• The percentage of hands-on people is too high.

These are management issues.

In many cases, the founders of startups are highly educated. They do not necessarily have experience working for a startup, and there are quite a few cases where they suddenly started a startup after working for a large company.

As Mr. Takafumi Horie, a famous Japanese businessman, once said, Excellent talents do not come to venture companies. It is better to work on that premise.

Recently, startups have been treated better, so this assumption is gradually changing, but even so, the weight of new graduates is still high in Japan when it comes to employment. It is unlikely that a talented CXO with a proven track record from the beginning will join your company.

In the case that you have been working for a large, prestigious company for a long time, you tend to assume too much about the average person's abilities and fail to recognize that the people you have been working with are a bit filtered, or that they are smarter than the average person.

In such cases, I think there is a false assumption that mature people don't dispute so much, and that it tends to happen more often than assumed.

If you start judging brilliant jerks, management has already failed.

It is also common to have too many people working with their hands, and it is often the case that senior management is not hired, or there is a lack of motivation to hire due to impatience to develop the product in the first place.

There is a term for people who are brilliant but have communication problems: brilliant jerk. In my opinion, when you encounter dispute, start judging someone is the worst case. If you start judging someone as a brilliant jerk, you have already failed in management.

I've had bosses I didn't get along with, and there were many cases where the person who was the subject of the brilliant jerk judgment was a nice guy when you talked to him in a normal way. So I think an organization that can unilaterally judge someone as harmful at the discretion of the immediate boss is much more harmful.

According to a theory, if you want to pass an opinion, it is more successful to agree on the decision-making process than to pass the opinion itself. Brilliant jerk judgment has a similar aspect. Organizations where dispute occur disregard KPT and 1-on-1.

I get the impression that there is no outlet for the usual complaints, and that the improvement cycle of organizational improvement is often not going around, resulting in people suddenly complaining.

Complaints that larger companies are more rigid in structure

• Lack of transparency in information sharing
• Dissatisfaction with benefits

is more of a case of dissatisfaction that is more common in larger companies.

It is more common in large companies that information is not given out until the reason for the overall policy or decision is heard, or work has to be done without much explanation.

As I wrote in The Story of Scrum, in my experience, the longer a company has been in existence, the more prevalent the presence of "me-me-uncle/auntie" types is, and it can be a cancer in the organization.

A COO-like person who was probably full-stack and very useful in the early phase sometimes become useless when a company scales and specialties become more important. I sometimes see cases where he or she tries to force his or her way in between and create his or her own useless position or obstructs communication.

Also, it's a tough world for middle management around here, but I sometimes encounter people who are unwilling to do anything due to dissatisfaction with their benefits. While the motivation of work is not only money, but high salary sometimes solves everything.

Summary

Summary. To summarize the above, here are some measures to prevent quarrels.

• Hire people with high tolerance for full-stack nature in new businesses.
• Don't rely too much on the excellence of people, but ensure good rapport through structure.
• Do not disregard KPT and 1-on-1, but vent on a daily basis
• Consider feedback from members when evaluating managers
• Follow the market in the evaluation system and wages

In terms of mechanisms, lunch meetings and club subsidies might be a good idea.

Thoughts

I sometimes see people who are mentally ill, although it is different from quarrels.

My recent view is that it is important to have hobbies and community contacts outside of work and to exercise.

Scrum may not be inherently necessary for Web development in Japan

Is a full-time Scrum Master needed?

Introduction

I recently read the paper "The New New Product Development Game," which is the source of Scrum. It is generally a discussion of how US companies can become as good as Japanese companies by adopting good development practices. The Scrum Guide's Scrum also seems to have been influenced by it.

Scrum is a method that is widely adopted in agile development, but there are still companies that do not have a full-time Scrum Master. Let me try to summarize at what point Scrum Guide Scrum is useful and the rationale for having a dedicated Scrum Master.

The New New Product Development Game Overview

Now this paper compares the products of several companies as examples. The products are below.

• Fuji Xerox mid-size copy machines
• Canon home copiers
• Honda passenger cars
• NEC personal computers
• Canon SLR cameras
• Canon's lens shutter camera

The author analyzes their development methods. The classification seems to be waterfall type A where each process is independent, type B where adjacent processes overlap, and agile type C where all processes influence each other.

Leading firms are said to have the following characteristics

• Inherent instability
• Self-organizing teams
• Overlapping development phases
• Multi-learning
• Little control
• Transmission of organizational learning

Generally speaking, it seems that the strength of bottom-up and the ability to turn the cycle of improvement without a strong top-down approach is a good thing about Japanese companies.

Japanese companies have been able to do what Scrum wanted to do from the beginning

In this way, it can be said that at least in the top Japanese companies, the elements of Scrum were already conducted.

The Scrum Guide can be seen as a manual for U.S. companies to adopt Japanese corporate development methods. Japanese companies may not have to do anything.

In Silicon Valley, I hear that engineers change jobs after one or two years. The U.S. is very active in immigration and has a diverse population. It is difficult to share cultural context, so there is a rationale for having a full-time coordinator.

On the other hand, traditional Japanese companies are almost all Japanese and employ people for life. More likely, it was almost exclusively male. Colleagues are familiar faces who have worked together for years. They will often do well without a full-time coordinator. The less diverse the team, the less need for a full-time Scrum Master.

Japanese Companies Need to Raise the Bar at the Manager Level

On the other hand, it is questionable whether Japan can use the same approach in the future. According to OpenWork statistics, overtime hours have decreased from 46 to 24 hours per month in the last 10 years. That's the impact of reforms in the way people work.

It can be said that Japanese companies managers were free-riding on the abilities of players, because even if the managers made a slight mistake in direction, the players covered for them on their own with overtime. As the manpower shortage progresses further in the future, such managers' lack of ability will become more and more visible.

Of course it is good to make what is strong now stronger, but Scrum is a framework for players to work harder, and it is possible that it has already been done in Japan. Instead, it may be more important to consider the opposite framework, such as training for managers, how to bring salaryman presidents closer to founding presidents, and how to incorporate the best aspects of the U.S. into Japanese companies.

There are companies that use employee engagement of members as an indicator for manager evaluation.

No need for a scrum master unless there are many positions within the development team

There are other perspectives on whether a dedicated Scrum Master is needed, for example, one indicator is whether there are many communication paths within the development team.

I think people were talking more about scrum, scrum in the heyday of social games. It is sort of a given, and essentially game development is asset heavy compared to web service development. Programming is not necessarily the high weight of the game. Graphics and voice are also necessary, and naturally there are more communication paths within development. So there is a necessity of having a full-time coordinator.

On the other hand, in the case of toB SaaS, it is said that customer success is necessary due to the business structure. The communication path has shifted from inside development to outside compared to social game development team. The demand for coordination within development is relatively low. On the other hand, PMs in between tend to be busy, and there are companies with multiple PMs here and there.

It is difficult to capture the business structure of not only Scrum, but also other IT companies in general, and since the elements required for web service development, game development, and system integration are different. The team topology of different business types is often not very helpful.

The easier the area is to modularize, the less need for a Scrum Master

There is another factor that makes IT companies less likely to need a full-time Scrum Master. That is because programming is a relatively individual sport among team sports.

The companies in The New New Product Development Game are manufacturers. There are so many parts in an automobile, and they often interact with each other. Mechanical design is hard to be loosely coupled due to its existence in physical space. When you improve the module to improve the sound quality of wireless earphones, it is easy to exceed the weight target, or something like that.

This is not to say that collaboration is unnecessary in IT companies, but what is at the root of the story that the productivity of programmers differs many times from person to person is a baseball pitcher's characteristics, or a highly individualistic part.

I have written before about the difference between capital-intensive and labor-intensive businesses, and there are two types of labor-intensive businesses: those that are team-oriented and those that are highly individualistic. Compared with manufacturer making a camera, if designed properly, we can avoid the tight coupling between modules in programming.

DX consulting jobs will eventually disappear. No need for scrum masters

Finally, I will also write about Scrum Master as a DX consultant. Some people say if Scrum Masters are the teachers of the DX method of Scrum, they are no longer needed once they have finished teaching the method. I think that is true.

I think if a full-time Scrum Master is the actual role name of a startup, it's the COO, because he's not a PM or a tech lead. From an investor's point of view, a company with a strong board of directors is a company you want to invest in. So it's not as if you don't need a COO. However, when you look at stock option grant rates, COOs are often not paid as much as CFOs or CTOs.

Is it helpful to have someone who doesn't know the technology and can't give direction to the product? I think there are some cases where it is necessary. But not all.

I think engineers can be roughly divided into those who like technology and those who like product development. It is more often the case that the first person who can develop it for any given area A is someone who likes technology. There was a moment during the machine learning boom when student Kagglers were stronger than experienced engineer. There are stories that blockchain entrepreneurs are young.

Google, for example, is an example of a company formed by geeky young engineers + adults, and it is possible that the Scrum Master is a sort of expedient for the formation of these adults. However, as time goes by and geeky young engineers gain experience in their careers. There will be engineers who can be managers. So over time, the COO and Scrum Master necessity declines.

A COO who can fill in for the CEO is welcome, but there's possibility a COO-like career can be a risk if you don't behave well. He or She may become someone who is not quite sure what he or she can do.

Summary

In Japanese companies where diversity is low, and programming itself is a relatively flourishing business category, web development companies where the main focus is not on out-of-the-box technology may not need Scrum, especially a full-time Scrum Master.

The Scrum Guide also mentions that ScrumMaster is a concept, but seeing that so many companies have a ScrumMaster who also works as a different role. It would be nice to invent a model that better describes the necessary team topology.

Designing and Operating a Successful IT Company Evaluation System, Learning from Fujitsu's Collapse Case Study

Notes from reading "Fujitsu from the inside".

I read "Fujitsu from the inside"

This is an old book from 2004, but I read "The Collapse of Fujitsu's 'Performance-Based Management' from the Inside" , which describes the inside story of Fujitsu's performance-based management system.

The book describes how the performance-based system was introduced at Fujitsu, which originally had a seniority system, and what went wrong. Although it is only from one author's point of view, as you can see from the title, the tone of the book is that most of the things did not work out.

Fujitsu Group is a large company with 124,000 regular employees and 12,000 non-regular employees in FY2021. While there are many articles on the organizational structure and the difficulties that startups face when they grow rapidly, I felt that it was rare to find a detailed case study of a large company.

The table of contents is as follows

1. The business performance that took a nosedive
2. How the employees lost their motivation
3. Total irresponsibility within the company
4. "Performance-based system" and corporate culture
5. The dark side of HR
6. Establishing a Japanese-style "performance-based" corporate culture

After listing a number of problems, the author concludes with his own suggestions. I agree with some of the author's suggestions and disagree with others, so after briefly summarizing the problems that arose, I would like to offer my own suggestions, ignoring the author's suggestions.

Note that this is an old book, about 20 years old, and it may well be improved now. In 2020, Fujitsu has announced a personnel system that will pay 35 million yen a year to advanced IT professional.

Gradual introduction of evaluation system

In 1993, Fujitsu introduced a performance-based target management system. The entire system was not changed at once, but it was introduced to only managers.

Since the idea of performance-based management includes wage cuts, the introduction of the system from the management level may mean that higher wages = higher effectiveness. Discretionary labor systems, grading systems, etc. are similarly introduced from the upper levels.

Fujitsu's evaluation system is based on grades and target management. The grades are roughly as follows.

Grade 3: High school graduate
Grade 4: University graduate
Grade 5: Graduate school graduate
Grade 6 Chief, section chief
Grade 7 Section manager
Grade 8 Department manager
Grade 9 Division manager
Grade 10 General Manager

The goal management is based on a five-point scale of SA, A, B, C, and E. E is rarely given, according to the company.

Problems that have occurred

There were a surprisingly large number of problems, but some of the most common problems are

• Inappropriate goal setting
• Evaluation is unfair
• Unestablished evaluation methods for managers
• Relative evaluation

Inappropriate goal setting

It seems that although goals were set, but they were rarely checked within the department. It was evaluated by personnel. Since it was a large company, HR could not read the goals of all members. As a result, the evaluation was based on the sense of effort by looking at overtime, sick leave, etc. without reading the text.

Evaluation is unfair

It seems that the cooperation between the department manager and the section manager is weak, and the section manager, who knows the work of the members best, was not allowed to attend the evaluation meetings. There seemed to be an advantage in evaluation if you belonged to personnel. There were variations between departments.

Unestablished evaluation method for managers

There was no demotion system, and due to the change from a seniority-based system to a performance-based system, those who were promoted sufficiently through seniority were able to stay after the evaluation system was changed. There was a situation where younger employees were not be able to be promoted. In addition, the evaluation method for managers themselves was not yet established.

Relative evaluation

In target management, the ratio of SA, A, B, and C was predetermined. As a result, only subordinates of senior managers were given preferential treatment, and political factors for decision making increased.

Later, the evaluation system was formally changed to absolute value evaluation, but it was meaningless because the budget for bonus payment was fixed.

How can we prevent problems from happening?

Reduce the weight of goal evaluation

Although some companies have an annual salary system, traditionally, the HR system in Japanese companies separates base salary and bonuses. Base salary is often based on grade and bonuses are based on goal setting.

For Toyota in 2021, the bonus is 6.0 months, which is 1/3 of the annual salary. In Fujitsu's case, it seems that goal setting had a relatively large impact on annual income.

I thought it would be good to have a smaller impact of goal setting on annual income if the company was transitioning from a seniority system or was newly established from a place where there was no evaluation system.

The evaluation is based on a person's basic skills (competencies) and it is adjusted by performance. An annual salary system without bonuses is basic skills oriented. If it was completely determined by the number of contracts signed, it is incentive oriented. Since seniority is based on a person's potential, I think it would be less likely to cause problems if the ratio is shifted gradually rather than all at once to a set target.

In the case of startups, it is possible to pivot after six months, and the effectiveness of goal setting is often questionable. If the company is a 0=>1 startup, it is likely that the goals themselves will change and not be operational. In that case, I think it is fine to set goals as a tool to spread the vision, etc., and reflect them a little in actual compensation.

Some companies make a resume once a year, give it to a recruitment agent, and then decide on an evaluation based on the annual salary of the person when he/she changes jobs.

Although there are fads and fashions in technology, unlike sales and marketing, I don't think the contribution of an engineer to sales is not too affected by a single year's effort. I think it is a mistake to be too blind to set goals when using a performance-based system. You should also consider a professional evaluation of the person's potential.

The section manager's manager should sample regularly

In that sense, I think it would be good to keep the members' day-to-day work in a state where their manager's manager can properly say what the members' day-to-day work is. It is important for the evaluation committee to evaluate goal setting neutrally, but I wonder if it is difficult to be fair if the evaluation is rushed only at the evaluation time. In particular, if the competency part of the evaluation is left to the manager's discretion, it will lead to variations among divisions.

For example, if a department consists of five sections with eight members per team, 40 members as total, the department manager can get a feel for the atmosphere by attending the morning meetings of each section from Monday to Friday. If there is a low-performing team, he or she may be able to improve the way things are done. It is also a good idea to have 1-on-1s regularly, skipping over the hierarchy.

Consider also the evaluation of managers by their members

Evaluating managers is a more difficult issue than to the members. If a department is in charge of numbers, it is possible to use the overall total as the evaluation, but this is not always the case.

Some say that 360-degree evaluations between members are a bit too casual and don't make much difference, but I think it is better to take evaluations from members to managers. Recently, due to the labor shortage, some companies reflect the evaluation of the workability of their members in the remuneration of their executives.

It is surprising how many teams have a dark side, even if they seem to be doing well from the outside. Sometimes the better managers in term of sales achievement are more harsh with their members.

Prevent the explosion of evaluations by Two-point evaluations

Even though we try to ensure fairness in evaluations through the evaluation committee, I think we are creatures who try to set loose goals. In that sense, including commitment and target in goal setting may be a good method.

The goal is divided into two goals in the manner of a two-point estimate.

Commit is a goal that can be reached if you do your best, and if a perfect score is 100 points, you will get 50 points if you achieve your commit.

The target is a goal that you can achieve if you work really well. You can get 100 points if you achieve target. For instance, it is about a 50% increase in commitments.

Changing from a one-point estimate to a two-point estimate has the effect of slightly reducing the blurriness of the evaluation setting.

If you are still concerned about the budget in absolute value evaluation, I think it is better to move to a competency-oriented evaluation system as mentioned above.

Impression

This is an old book, but it was worth reading. It is an interesting case study, so please read it.

How NTT changed assessment & work style

The inside story of a traditional IT company

Preface

NTT Group, which has 330,000 employees, is working on reforming its personnel system. Fujitsu has 130,000 employees and Toyota has 360,000, so you can see the scale of the project.

I found a video on YouTube in which an executive officer herself explained the contents, so I will summarize the gist of the video as a memo.

Group Overview

• Integrated ICT Business (docomo, NTT Communications, NTT Comware): 50,000
• Regional Communications Business (NTT East, NTT West): 70,000
• Global solutions business (NTT DATA, NTT): 190,000
• Real estate, energy, etc.: 30,000

I had a strong image of telecommunications, but the NTT DATA Group has 150,000 employees, so the weight of that group is significant. However, the earning power comes from the integrated ICT business.

Of the NTT Group, 140,000 are overseas, and this is the part that has grown in the last 10 years or so.

Introduction of a job-based personnel system for managers

In this era of VUCA, they are moving to a job-based system. However, employment is being protected, so a Japanese-style job-based system is being applied to only 12,000 managers as start point.

Main change is a job grade system and they increased the linkage of company performance KPI to bonuses. There are 6 levels of job grade.

Revision of the system to enhance professionalism (general employees)

General employees are not job-based. Two specialist grades and six general grades.

Salary increase and promotion are determined by company outcome contribution, behavior assessment, and professionalism assessment. After the general grades, employees decide whether to become a manager or a specialist (grade).

60~70% of the employees come from new graduates.

Ensure diversity

They created Sustainability Charter, aiming for 25~30% female directors by FY2025. Super-flex system has reduced the number of women working shorter hours.

The standard pattern has created to encourage men to take maternity leave.

Remote Work

Remote work is also being promoted, and about 70% of office workers are doing so. Camera ON is recommended in remote work handbooks.

A remote standard system with no restrictions on place of residence was also be introduced from 2022 (30,000 eligible employees). The number of employees working alone from their original home has decreased.

Impressions

I think it is too late to keep the system with a strong seniority system. I got the impression that many smaller Japanese companies have already introduced a career path other than becoming a manager.

There were some good points in other areas, and I would like to imitate them when I am in a position to decide on a personnel system.

How Sony laid off employees

Book review of Sony Layoff

Introduction

Layoffs are booming at American tech companies. Information is summarized in layoffs.fyi. Twitter, in particular, reports that more than half of its employees have left through layoffs or voluntary resignations.

Some people often argue that the reason why Japanese salaries do not increase is because of too many restrictions on layoffs compared to the U.S., but according to the OECD survey, the U.S. requirement is off the median, and the data shows that the U.S. low restriction is extremely unique in the world.

https://www.dir.co.jp/report/research/economics/europe/20140318_008337.pdf

Therefore, it is not the case that the same thing will suddenly happen in Japanese companies, but I found a book "Kirisute SONY (SONY layoff)" which summarizes the case of restructuring at Sony. I've read it for my personal interest.

Book summary

The table of contents is as follows

• Chapter 1: Sony's Transformation 2006-2007
• Chapter 2 Turning Point 1946-2006
• Chapter 3: The pride of engineers 2008-2009
• Chapter 4 Volunteering for Restructuring 2012-2013
• Chapter 5 Undoable and Irreversible 2012
• Chapter 6 Hitokiri SONY 2012-2014
• Chapter 7: Suffering without end 1954-2014
• End Chapter ex-SONY Struggling

The book itself is from 2015.

Chapter 1 is an introduction to Sony's internal systems and surrounding environment. Chapters 2, 3, and 5 are about company history and past restructuring. Chapters 4 and 7 are about the restructuring room. Chapter 6 is about the person in charge of restructuring.

Sony's Retirement System

The report describes several measures taken within Sony in response to changes in the business structure.

• Second career support site within the intranet

Case studies of Sony alumni

• Sony University

Executive Candidate Training Institute

• Career Design Office

Commonly known as the restructuring room. You can either apply for resignation and get support from a job change agency at the company's expense, or you can take a training course if you can't decide.

As a measure, I have the impression that they are solemnly doing standard things. Either consolidate low performers in one department and train them to take openings in other departments of company, or give them early retirement benefits to help them change jobs.

Statistical Comparison

The Sony Group has 108,900 employees at the end of March 2022. It depends on the time, but it seems that the number of reduction is around 3,000 to 1,000,000 persons/year. 80,000 persons in 20 years, I guess. That is quite a lot.

I thought it was difficult for Japanese companies to cut people compared to American companies, but they are restructuring quite a bit. Since Sony's average annual salary is very high, they had to take the same measures like US company. Perhaps there is less flexibility in terms of internal role change when there are changes in the competence environment.

On the other hand, it seems that there are about 100~300 people who join the Career Design Office every year. That is less than I expected. It seems that the average person gives up and only about 5% of the layoff people hesitated to make a decision.

Sony has multiple businesses. Its business is portfolio. However, still, it seems to be difficult to be in long success in the manufacturer business.

Recent dismissal cases and precedents

In a related matter, I have also looked into cases and judicial precedents regarding dismissals.

Japanese restrictions on dismissal are strong. For example, even an employee whose employment term is limited in the contract can be invalidated. DMM had a dispute about that in 2019. In many cases, it is illegal to stop hiring a contract employee.

On the other hand, there are some recent cases where layoff is somewhat justified in job-type employment. The conditions are strict, though.

• Credit Suisse Securities, Tokyo District Court

The employee appealed against the dismissal due to the disappearance of his post was judged to be valid. The court evaluated the company's efforts to avoid dismissal by offering five internal job openings after the dissmiss of the department.

• United Airlines Supreme Court Termination valid.

The High Court evaluated that the company took all possible avoidance measures to mitigate the disadvantage of dismissal, such as offering reassignments that kept the annual salary and adding severance pay for early retirement, while the job title was limited in the contract.

Impression

One of the things I dislike about layoffs in Japan is that employment in Japan is limited to new graduates. If you are laid off, your job opportunities are limited. If you can be hired by another company with the same salary based on your past experience, you will be less likely to dislike layoff.

I recently learned that Washington State in the US will require companies with 15 or more employees to disclose their salary range when recruiting since 2023/01. Microsoft is included.

Come to think of it, Japanese job postings often do not disclose salary ranges, or only a rough range that includes new graduates to senior role. They plainly say it depends on experience. The reason why salaries do not go up and there are not enough room for hiring may be due to the lack of transparency when moving to another company.

Loosening the restrictions on layoffs is a proportionally painstaking revision, and Japan is not extremely bad compared to the rest of the world. In fact, I feel that it would be healthier as a society if Japan, like Washington State, made it mandatory for evaluation systems and salary ranges to be made public in job posting.

How to deal with businesses with hiring difficulties

I don't have the answer yet.

Preface

Although it is not true recently, Japan has had a popular salaryman working style of lifetime employment. The rate of job change is low compared to other countries.

Startups are required by investors to grow rapidly, but unlike advertising, hiring is often the slowest point of business growth. It is not something that can be achieved by just setting quota.

In addition, it is becoming more and more difficult to create new business opportunities every year. Some businesses are structurally difficult to recruit.

Business Domain Difficulties

One of the difficulties in recruitment is unique business domain.

For example, it is difficult to attract people due to public guilt if the service is adult-related or involves gambling. Even if the worker doesn't care about it when he/she was young, he/she may change jobs when they get married.

The other concern is non-tech speciality. For example, engineers are easy to imagine a scientific paper compilation service. However, if the business is for lawyer, it might be less motivating.

Recently, there are people who have changed jobs from completely different professions via programming schools, so one strategy is to target such people. Many of them are more junior anyway.

The other way is hire domain expert. For legal services, hiring a lawyer and separating the domain part and the development part as much as possible is the strategy. Reduce job descriptions to increase the interchangeability of workers.

The other strategy is to hold regular study sessions and focus on educating existing members on domain knowledge.

Geographical Difficulties

The number of companies that work remotely is increasing due to the covid-19. That means if the companies cannot take this approach, they are facing the difficulties.

For example, companies that require image recognition by physical devices such as Amazon Go may inevitably need physical maintenance due to hardware restriction. Companies that are contracted to analyze data close to personal identity information may be required to work in an environment without Internet condition.

Not being able to get hired people from country areas is a pain. The countermeasure might be to provide office work compensation, or to separate much jobs as possible that requires office work.

Language Difficulties

Let's say you have a cross-border service to sell Japanese cosmetics in China. The users are Chinese, so the UI must be created in Chinese.

Unfortunately, the employees, including the representative, are Japanese. What would be your strategy in such a case?

One strategy would be to create the website in English and separate the development from the translation part. Another strategy would be to actively support foreign engineers with visa support.

Hiring difficulty is not employee problem

As mentioned above, it is possible to complement hiring weakness by arranging them into several patterns.

On the other hand, it is difficult to solve recruitment difficulties by employee members. When you start a business, what you do and when you do it is a factor that has more weight on success than the excellence of the people in it. The destiny come from founder's decision.

If you were an investor and someone told you that he had invented an amazing air conditioner that would sell in 2021, would you bet on it? If you were in Africa, it might be a chance. However in Japan, every house already has air conditioner.

Even if the founder is a serial entrepreneur, it would be hard to beat the macro economy. If you have insights about the trends, your business will succeed in 90%.

How to find CTO-class engineer

opinionated article

What is CTO?

CTO(Chief Technical Officer or Chief Technology Officer) is the top of company in charge of technology. Some companies also have VP of Engineering as different role. In that case, recruiting, education and management are done by VPoE.

However, since the company size of startup is small, startup CTO do the both of technology and recruiting.

Where's CTO?

When I do freelance business, some clients lack CTO. The standard job change is move one person from company A to company B. However CXO have generally high commitment to their business.

They lack the motivation of job change. Since the number of founder grows, CTO demand is high. The application ratio of Tokyo engineer is around 10. If 10% of engineers achieve CTO criteria, you have to interview with 100 engineers for one CTO position.

The organization who have VP of Engineering is not majority. That means there's big role gap between tech lead and CTO because the candidate have to do technology area and non-technology area.

CTO skill requirements

When I discuss with clients, "CTO-class engineer" differs each. The requirement needs clarification.

Non Tech Area

• Is the team management needed?
• Do you want CTO to recruit engineers?

If you don't need these or you can do by yourself, just you need is full-stack engineer or Tech Advisor.

Technology

• Web server
  • Infrastructure(AWS, GCP, Docker, Kubernetes etc)
  • Backend(PHP, Ruby, Python, Go etc)
  • Frontend(Vue.js, React, jQuery etc)

Traditionally, the background of CTO is infrastructure and backend. Some use Firebase as data store, but I think web development knowledge is mandatory for the most cases. If the company focus is mobile app, web frontend is not needed.

• Mobile app
  • iOS
  • Android
  • ReactNative
  • Flutter

If the system is Web-only, mobile app is no need. Some CTO know web and iOS, but lack Android. They focus MVP.

• Game development
  • Unity
  • Unreal Engine
  • Cocos2d
  • XR

Apple Glass will be launched in a few years

• Machine learning, data science
  • Technique-based
    • SQL
    • Decision tree like XGBoost
    • Deep Learning
  • Domain-based
    • Image recognition
    • Sound recognition
    • Natural Language Processing

For improvement iteration, data analysis fundamental is mandatory. Most companies want to add recommendation and matching features. If the focus is MVP, just SQL is OK.

• DeepTech, Domain knowledge
  • Blockchain
  • Drone
  • Quantum computer
  • smart speaker skill
  • patent

There's less blue ocean for traditional web development. Additional domain knowledge is necessary for advantage. Some companies have CRO: Chief Research Officer as different role. Some companies have CPO: Chief Patent Officer as different role.

• Natural Language
  • Japanese
  • English
  • Chinese
  • Others

If the team is global team in Japan, Japanese and English are minimum criteria.

How to find CTO-class engineer

Now main topic.

First of all, the role CTO is not well-evaluated in large company. If the person who can do iOS, Rails and data analysis, that all Lv. 3 person cannot over-perform to single-specialized Lv. 5 person in each area. The role of large company is fine and specialized.

Some companies advise that full-stack engineer converts to specialized engineer when company grows. The standard assessment come from what they do now. Full-stack engineers are sometimes under-evaluated.

When you search CTO candidate, normal pitfall is contact famous engineer who speeches on tech conference. That thing is not bad, but specialized one skill engineer is not always good at full-stack development. My advice is search under-evaluated full-stack engineer in large organization.

Freelance may be close to CTO

As different measure, there's CTO training course recently. This is the senior version of coding bootcamp. Day1 content was

• Does the developer need to aim CTO?
• CTO role
• Startup DevOps
• Finance
• Incident management of team and product

No technical talks were included. Main part is how to read financial report, the discussion about major troubles.

This might be biased, but I think freelancer is close to CTO. Tax return grows financial skills. Working experiences with many clients grows the number of measures. Of course freelancers prefer solo-work. That is bad side.

Full stack is one of the advantage of freelancer. One way is using tech advisor on early stage, then CTO will be raised from internal tech lead.

Finally

Non-engineer sometimes think engineering is only one area.

The person who search CTO-class engineer is normally not the superman who can do sales, marketing, finance, tax and legal area. Making job description clear is important.

The super hacker who can understand Japanese, English, a little Chinese, infrastructure, backend, frontend, smart speaker skills, machine learning, data analysis, blockchain, iOS, Android, patent and VTuber is here.