Contracting and the Stockholm Syndrome

I had an interesting chat last week with some colleagues from ThoughtWorks about a situation we currently have at a few of our clients. It’s an interesting economical challange and, even though I’ve missed most of my Economy classes, I still like the subject. Point is, companies and IT contractors tend to develop a variation of the Stockholm Syndrome over time because of the way incentives play out.

It goes like this: FooCorp has a big IT project ahead of them, which will need about a dozen developers. They’ll only need a third of that to maintain the application once development has finished. It makes sense for FooCorp to hire the remainder of the staff as contractors, so that they can show them the door without too much hassle when everything goes to production use. Contractors, therefore, take the risk of having to look for another gig sooner than expected, in case the project gets cancelled, and adjust their rates accordingly. Those high rates may lead to a project management working under budget pressure, which might drive managers towards shrinking the feature set and/or the schedules. Here’s where the fun bit starts: are there any incentives for a contractor to actually deliver any quality software at all?

As I see it, there are two positive incentives: peer pressure in justifying rates, and collecting good contacts and references. In the situations we have been witnessing, those pale next to doing whatever is possible to extend the contract, which more often than not are some incarnation of finger-pointing, back-stabbing or just plain inaction in order to make the project as late as possible. By extending the contract, they can ensure there’s always time to fix the mess created by blaming everyone else but their contracting buddies (those who’ll happily point them to new gigs) and pretending to work harder than everybody else by assuming authorship of other people’s work and ideas, while happily surfing the web all day.

Wouldn’t anyone at FooCorp notice that? They may have, but by the time they realize how serious the situation is, it’s usually too late to dismiss the contractors without seriously bleeding knowledge from the project and risking the schedules too much. In a way, there’s all this business knowledge being held hostage by the contractors, and the ransom is to be paid in monthly installments, until FooCorp’s employees pick it up and are able to run maintain the project on their own. Keith Henson wrote, in Sex, Drugs, and Cults:

Fighting hard to protect yourself and your relatives is good for your genes, but when captured and escape is not possible, giving up short of dying and making the best you can of the new situation is also good for your genes. In particular it would be good for genes that built minds able to dump previous emotional attachments under conditions of being captured and build new social bonds to the people who have captured you. The process should neither be too fast (because you may be rescued) nor too slow (because you don’t want to excessively try the patience of those who have captured you).

Of course, there are contractors with good ethics and who manage, against all odds, to deliver some truly amazing code.