Because they have no idea how to hire and manage teams that build software. It's a lot harder than it sounds if you have no personal experience delivering software (read: most legacy corp CTOs).

I've found myself wondering recently how much impact I could have at one of these large companies if given a modest budget and a mandate to build a high performing engineering org.

I've spent my career at startups and growth companies building and scaling engineering orgs. So I take it as a given that I could get a highly capable team but wonder how much it would matter. Would we still be weighed down by internal bureaucracy to the point of failure?

I suspect that might be the case.

If so it's hard to fault a CTO for outsourcing. If your company isn't built to support having a tech org then you might see these kinds of failures no matter what you do.

This is why these large companies often form "innovation" units that are spun out as separate entities or at lest setup as separate orgs sheltered from internal politics by the C suite.

It's possible. But it's really hard work, very politically expensive, and extremely high risk. So, yeah, not surprising.

I have seen a company spin up and after 2 years spin out a seperate innovation unit, and when it was a proper seperate entity outsource their core IT to the unit... Which was then branded a big success! It was liberating to see such systemic incompetence; The people were all highly educated but as a group just can't seem to organize effectively.

This Sounds like financial engineering. It is possible the people involved were incompetent, either individually or as a group. But this sounds like an incentive problem. Competence, misdirected.

> Branded as a success

I fear you aren't cyncical enough.

Was it a filure? Did the company's balance sheet improve? Did the company's stock price increase? Did the spinout attract a load of investment for its (pre-destined) success and turn that into a rich revenue stream?

Markets -- for both debt and equity -- are mostly idiotic machines on short timeframes. Your ability to generate free cash flow puts a floor on your price. Others' imagination and available liquidity are the only ceilings.

Additionally, these types of spin outs can behave like generational wealth. They may be incompetent idiots, but who cares? Daddy's money is more than you can raise and mommy's rolodex is richer than you could possibly imagine.

The problem isn't just the experience or capabilities it's the internal politics.

You have dozens of people with competing interests some of who are actively working against you and the C suite doesn't know what is really going on our what to do because all the information they are receiving is intentionally being distorted by people trying to spin it so they can keep creeping up the ladder.

The biggest enemy of a large organization is almost always itself.

> Because they have no idea how to hire and manage teams that build software. It's a lot harder than it sounds if you have no personal experience delivering software (read: most legacy corp CTOs).

I just want to point out that this isn't just legacy corps - I previously worked for a manager who went straight from a theory heavy CS degree to a theory heavy PhD to consultancy to management.

You still get companies like this where some middle manager with 0 years of SWE experience has to hire Software Engineers with 5+.

I'd say this is rather distribution at work. To build software competitively you need fairly good people and not a lot them would want to end up at Hertz. Places like Hertz are not tech companies which also often makes them very low margine, capital deprived and of limited scalability. Therefore, they cannot offer the compensation like top 20% of the players. The difference of compensation between top 20% and rest of the players is just amazing and reflects market forces operating in talent distribution that has sharp peak than other professions.

Software development requires placing millions of bytes exactly at right places to make billions of transitors sing and dance in precise sequence about billion times a second, every second. This is of complexity unlike anything humanity has ever encountered before.

However, Hertz did end up spending $32M, so it turns out they can offer compensation like the top 20% if they wanted to.

I think it’s two things that are pretty basic:

1) decision makers take on less career risk (we hired Accenture and they defrauded us is probably better than we tried to do it ourself and we screwed it up)

2) Larger organizations can’t staff up and build a capability quickly and efficiently in non-core competencies.

Yeah, also what are you gonna do with all the people you hired for a once every few year website overhaul?

Sometimes, I've worked at consulting shops that actually delivered quality though they were large-ish but not Accenture/IBM sized

Making yourself rich off the backs of your workers isn't exactly a new idea, this is just more blatant than usual.