Is Dark Management A Local Solution To A Global Problem?

When we talk about dark management, we almost always associate such practice with twisted managers having perverse motives. But as it’s so prevalent, especially in the software industry, that it’s led me to think whether there are some hidden global driving forces behind it. And unfortunately, I seriously suspect that it’s indeed the case. It can be illustrated in the article Are Small To Medium Companies Serving Lots Of Big Customers In A Short Time A Red Flag?

However, that article itself still doesn’t link to any universal factor directly, as you can just explain that maybe the protagonist should just go back to an excellent business school or conclude that he/she’s merely not suitable for running a small/medium software vendor company.

Let’s step back to think why the protagonist have done all these — What choice did he/she have? What if he/she tried to run the business in a sustainable manner instead of utilizing dark management? How can he/she keep securing contracts without resorting into death march at all?

These questions led me to have a hypothesis — Maybe the root cause are these global trends:

1. The world is becoming more and more overpopulated

2. The globalization is becoming more and more irreversible

3. The winner takes all market is becoming larger and larger

4. The people demands are becoming higher and higher

5. The overall pace of change is becoming faster and faster

The 1st trend means that the competition is becoming more and more fierce due to having more and more competitors in the same place(local/global), while goods supplies are becoming more and more insufficient so competitors have to compete on increasingly scarce but vital resources.

The 2nd trend means that one can hardly compete without facing the best competitors in the world as the latter can and will integrate all the local markets into a single worldwide one so everyone must compete in that same market. Also, the best competitors can become more and more competitive by relocating various departments to the most advantageous countries and utilizing the economies of scale better.They can also hire the best employees all over the world.

The 3rd trend means that the best competitors in the market can take most of the market share there, and the rest of the competitors(i.e., most) will have to compete for the little market share.

The 4th trend means that the costs of entering and remaining in competition are kept increasing, due to both customers and employees demanding more and more from all companies.

The 5th trend means that the competitors become harder and harder to keep up with the pace of change that are becoming faster and faster, so they’ll have to invest more and more on learning the new stuffs and/or becoming more and more innovative in order to take over the lead/trend.

Combining all the above, the best competitors are taking more and more market share all over the world from the more and more number of competitors by controlling more and more good supplies, keeping the pace of change faster and faster and the people demands higher and higher to ensure no one else can ever threaten their leadership under these global trends.

One reason they can stand out in such a fierce competition is the project management triangle:

1. Fast — Companies need to roll out their results quickly or their competitors will eat their lunch. Also, the slower the rollout, the more costs the companies have to invest in order to keep the projects running, so companies are supposed to finish projects quickly rather than slowly.

2. Good — Customers always want the best of the best, or at least good enough products, so rolling out an obviously bad result is almost always a financial and even a strategic disaster. Also, developing obviously bad results is one of the best ways to kill the employee morale.

3. Cheap — Most customers don’t want to/can’t afford expensive results rolled out by companies, so companies must control the costs tightly in order to have a profit. On the other hand, as employees are becoming more and more expensive, keeping the costs under control are becoming harder and harder, as underpaying them can lead to very high turnover rates.

However, this triangle suggests that it’s almost, if not just, impossible to be all fast, good and cheap. Actually, even just seeming to have achieved them all is already incredibly hard. On the other hand, in order to be competitive, a competitor must at least appear to have accomplished the impossible, or it’ll quickly be outclassed by the best of the best no matter where it’s.

Actually, there’s an exception — A company can avoid most competition all over the Earth if it managed to open a new niche market. This ensures that it’ll be 1st one in the market as that market just didn’t exist before then. Of course, it only holds until another competitor entering the market has gained decisive competitive advantages. Or, if a company has entered an existing niche market, it can still compete if it can be innovative enough to push that market forward and take over the lead. Even if a company doesn’t have a chance to compete, it can still be sold to those believing that buying it will help them conquering that niche market.

Nevertheless, the overall situation remains largely the same:

1. Very few companies can have such a large market share that can afford being fast and good in the short term, and fast, good and cheap in the long term by utilizing economies of scale, talented employees in underdeveloped countries and scarce resources in cheaper places.

2. Very few companies are innovative enough to be able to open a new niche market or push the existing ones forward, meaning that most companies still have to aim for the impossible.

3. While some companies managed to appear to be fast, good and cheap at the same time, such appearance are maintained by utilizing all sorts of dark management tactics to exploit employees and fellow collaborators. Sometimes they even cheat their customers covertly.

Therefore, for most companies, it isn’t(at least not just) that they want to have dark managers, it’s that they(at least also) have to. Many of them simply won’t survive otherwise.

If you’re still not convinced, then let’s explore more closely why just taking 2 out of the 3 doesn’t work in most cases by analyzing each of the combinations for normal companies:

1. Fast and good but expensive –Unless they’re targeting a luxury market(where the more expensive products actually sell better as they give more bragging rights to their buyers), a good result that is rolled out quickly is still very hard to sell well if it’s expensive on the customer side. But making it cheap on the customer side as well will reduce the profit for the company, eventually to the point of not even covering the development/maintenance costs.

2. Fast and cheap but bad — Unless they’re targeting a market where quality doesn’t matter at all, a cheap product that is rolled out quickly can actually harm the company’s reputation and thus its market share if it’s of low quality, as most customers expect good and cheap products.

3. Good and cheap but slow –Unless they’ve next to no competition, by the time they’ve rolled out their good and cheap results, their competitors have already rolled out something else that have eaten the lunch. In extreme cases, the customers simply won’t care about those outdated results no matter how good and cheap they’re, as they become irrelevant already.

Therefore a seemingly working formula for those companies is to pick 2 of 3 for real, and make the remaining 1 appear to be achieved by utilizing dark management. So there are 3 choices:

1. Fake The Fast Part –A rolled out result can be incredibly fast while still being cheap and good by rolling it out even when it’s incomplete. Early access is 1 such business model that, in extreme cases, rolling out a MVP or even just a prototype can already reap enough profits. Of course, the company really needs to believe in their results and the business model, as it can kill its reputation instead by releasing an unfinished product that are full of defects, making many users to think that the company doesn’t even perform the most basic testing.

2. Fake The Good Part –A rolled out result can actually be bad even when it appears to be good.

1 way to achieve this is to sweep defects under the carpet, which is very common in software. While the best fakes can keep all the dark sides under the soil forever, all the others are just minefields waiting to explode when some customers unknowingly walk over them in ways the companies can never ever dream of. The key here is that, by the time the minefields do explode, the rolled out result would already been irrelevant to the company and/or customers. In short: One Just need to seem to be good enough for just long enough.

Another way to achieve this is to make up an empty hype that most of the targeting audience will believe in even though the results to be rolled out will never live up that hype. The aim is this: By the time the customers have realized that the result’s just a scam, the company has already made the profit and bailed out. The damaged reputation can be compensated by replacing the old company with a new one while keeping its internals intact all along.

3. Fake The Cheap Part –A rolled out result can be cheap or even free at first, but then the real profits come from deferred payment. DLCs, microtransactions and SaaS are some examples of such business models. They all utilize the fact that deferred benefits are much more elusive. In MMORPG, deferred benefits can come from inflation and sunk cost fallacy, causing many players to continue to pay for more and more new stuffs in order to stay relevant in the game.

But, you may say, dark management, except executed just right, almost always end up harming everyone, including the dark managers. And getting dark management right is extremely hard. So those companies should either run their businesses properly, or be sold to those who do.

However, let’s ask this question– If most companies did exactly that, what would happen to their belonging industries? The answer is nearly certainly this — Many of them would either be sold to the best of the best or simply go out of business, meaning that plenty of employees will lose their jobs too. Whether such a dramatic change does more good than harm in the long term in another thing, the point here is: Honestly, are we able/willing to take such a big risk now?

Also, the fewer the number of the companies, the less choices the customers have. While more bad choices will only harm customers and the number of good choices are what really matters to them, quite frequently a sweatshop utilizing all sorts of dark management tactics in order to keep the crunch mode running can indeed roll out good results, and thus good choices for customers. It’s just that the damages done to the employees are so great that such a business model is hardly sustainable at all(Only the best dark managers can make dark management truly sustainable).

By banning dark management altogether, the market will also ban plenty of good choices. In extreme cases, the remaining good choices can be so few that the remaining companies will become brave enough to turn them all into bad choices — overpriced mediocre results that customers must rely on thorough their lives, as those companies don’t have to provide good and cheap choices anymore to stay in the market. Eventually blatant monopoly will be the game.

Nevertheless, dark management should still be left behind eventually, as, except their best forms, they’re just too harmful to all stakeholders. In order to stop using this local solution to the aforementioned global problem, the humanity will have to try at least 1 of the below right now:

1. Remove the global problem altogether. Anti-globalization movement is one such attempt. However, I personally doubt whether it’d just replace the current problem with a bigger one.

2. Use a global solution to solve the global problem. Third Way is one of the more ambitious attempts, while a more conservative one is to believe that the mankind will eventually be evolved to the point that an individual’s self interest will be aligned with that of the society.

3. Use a better local solution to solve the global problem. This can be done by making the best form of the dark management — making all subordinates’ goals aligned with that of their managers, easier to achieve without resorting to the FOG.(Read Dark Managers Keeps Targets Under The FOG for details) Examples include mission statements, corporate values and social responsibilities. These image projects are greatly aided by all those education systems/governments that perpetually/proactively brainwash people to internalize norms and values that are advantageous to the advances/developments of companies/societies.

To conclude, while it’s clearly wrong to say that dark management will disappear automatically when the global problem’s solved, I still remain highly skeptical on whether eradicating dark management is possible/beneficial when there’s still a global problem to be removed/solved. Maybe the prevalence of dark management is still a lesser/necessary evil for the near future.