A Bloomer!

In claiming that cheap Indian coders brought down the plane, here is the actual Bloomberg headline: ‘Boeing’s 737 Max Software Out-sourced to $9-an-Hour Engineers’(https://www.bloomberg.com/news/articles/2019-06-28/boeing-s-737-max-software-outsourced-to-9-an-hour-engineers). The article goes on to strongly imply that the reason the 737 Max crashed was cheap Indian coders. This section below is in the first part of the article:

“ … Increasingly, the iconic American plane maker and its subcontractors have relied on temporary workers making as little as $9 an hour to develop and test software, often from countries lacking a deep background in aerospace -- notably India. In offices across from Seattle’s Boeing Field, recent college graduates employed by the Indian software developer HCL Technologies Ltd. occupied several rows of desks, said Mark Rabin, a former Boeing software engineer who worked in a flight-test group that supported the Max. The coders from HCL were typically designing to specifications set by Boeing. Still, ‘it was controversial because it was far less efficient than Boeing engineers just writing the code,” Rabin said. Frequently, he recalled, it took many rounds going back and forth because the code was not done correctly’. .... . In one post, an HCL employee summarized his duties with a reference to the now-infamous model, which started flight tests in January 2016 as ‘Provided quick workaround to resolve production issue which resulted in not delaying flight test of 737-Max (delay in each flight test will cost very big amount for Boeing’)…”

Later on, it goes on to, in effect, challenge that first part:

“ … ‘Boeing was doing all kinds of things, everything you can imagine, to reduce cost, including moving work from Puget Sound, because we’d become very expensive here’, said Rick Ludtke, a former Boeing flight controls engineer laid off in 2017. ‘All that’s very understandable if you think of it from a business perspective. Slowly over time it appears that’s eroded the ability for Puget Sound designers to design’. Rabin, the former software engineer, recalled one manager saying at an all-hands meeting that Boeing didn’t need senior engineers because its products were mature. ‘I was shocked that in a room full of a couple hundred mostly senior engineers we were being told that we weren’t needed’, said Rabin, who was laid off in 2015. ... Boeing has also expanded a design center in Moscow. At a meeting with a chief 787 engineer in 2008, one staffer complained about sending drawings back to a team in Russia 18 times before they understood that the smoke detectors needed to be connected to the electrical system, said Cynthia Cole, a former Boeing engineer who headed the engineers’ union from 2006 to 2010. ‘Engineering started becoming a commodity’, said Vance Hilderman, who co-founded a company called TekSci that supplied aerospace contract engineers and began losing work to overseas competitors in the early 2000s …”

So here was what was really going on. Boeing senior management (including the CEO they hired from GE), decided to pad short term profits to please Wall Street and keep the stock price high so they can make their ‘numbers’ (i.e. the earnings-per-share numbers so beloved of Wall Street), so the CEO and his bean-counters can earn their fat bonuses. To achieve those all-important ‘numbers’, Boeing outsourced most R&D. In fact, Mitsubishi in Japan builds a critical subsystem, an Italian company builds another critical subsystem, Indian companies write code, among numerous other sub-contractors to Boeing that do R&D for Boeing. They laid off engineers in expensive Seattle (it is a separate topic on how Seattle became so unbelievably expensive - another consequence of the global financial bubble but I won't go into that aspect in this post).

And Boeing top management collected fat bonuses for making the numbers. By the way, the entire Bloomberg article never mentions a single senior executive at Boeing by name. But let's make sure to mention the cheap Indian coders repeatedly and the backend team in Russia. Cheap Indians are dumb and Russians are evil, right?

A thought experiment

Now, let's stop here and do a thought experiment. Imagine that I transformed myself to my evil twin, and I ask tell our R&D head: "We are spending too much money on R&D, Chennai is expensive, we can do it cheap, I want you to figure out an outsourcing strategy". I set various metrics for our senior managers, who then transmit those metrics to their own leads, and so on. To ensure compliance, I also appoint lots of spreadsheet-armed MBAs overseeing various aspects of R&D, in modern corporate style.

Our senior managers, under serious pressure from me, come up with a plan. The frameworks will be built in Cambodia. The database will be built in Uganda. The UI will be built in Bihar. The security reviews will happen in Colombia. All those places are a lot cheaper than Chennai. The "final assembly" will happen in expensive Chennai. How many of you think that this project can be managed in any sane way at all? Our managers will have zero time to do any technical work and simply focus on "coordinating" projects across these vastly different time zones and cultures. They will travel often. They will have lots and lots of meetings. We will feel very ‘globalized’. In fact, this is the heart of much of what passes for globalization today.

Meanwhile, by cutting costs by outsourcing this way, I can enjoy an exceptionally fat paycheck! This is not that different from destroying a forest and burn the wood to generate energy - once the forest is gone, it is gone, but in the short term, it seems like a smart idea.

Magical code should have compensated for a bad sensor and bad data

And the article finishes on this note:

Multiple investigations – including a Justice Department criminal probe – are trying to unravel how and when critical decisions were made about the Max’s software. During the crashes of Lion Air and Ethiopian Airlines planes that killed 346 people, investigators suspect, the MCAS system pushed the planes into uncontrollable dives because of bad data from a single sensor.

That design violated basic principles of redundancy for generations of Boeing engineers, and the company apparently never tested to see how the software would respond, Lemme said. “It was a stunning fail,” he said. “A lot of people should have thought of this problem – not one person – and asked about it.”

Boeing also has disclosed that it learned soon after Max deliveries began in 2017 that a warning light that might have alerted crews to the issue with the sensor wasn’t installed correctly in the flight-display software. A Boeing statement in May, explaining why the company didn’t inform regulators at the time, said engineers had determined it wasn’t a safety issue. “Senior company leadership,” the statement added, “was not involved in the review.”

Senior company leadership, of course, cannot be responsible for trivial matters like 737 Max falling out of the sky and killing hundreds of people. Perish that thought. Don't look there, look at the cheap Indian coders, who should have compensated for a deeply flawed hardware design having a single point of failure - a single bad sensor giving out bad data - and compensate for it with magical code that could spiritually sense that the sensor was giving bad data. Indian coders should have had magical powers, right? They were the ones collecting the fat paychecks, right?

There is a basic principle of software: garbage in, garbage out. If the sensor is going to give out bad data, and there is only a single sensor, no amount of software magic is going to save that plane. The problems started long before the cheap Indian coders got on this project. Now, re-read the headline and decide for yourself.

Why India must master these complex technologies

I wrote about the structural problem in the Indian economy. Our basic problem is we want the advanced products of the human mind (including Boeing planes) but we do not have to know-how to produce them. That lack of know-how is why India remains poor and that is why "cheap Indian coders" arise, because we have a vast population that is desperately poor. The solution lies within - I won't blame a Boeing or anyone for it, the solution is in ourselves.

As the great philosopher-statesman Lee Kuan Yew often said "We have no option but to roll up our shirt-sleeves and get to work building from the ground up". Lee transformed Singapore from a slum-infested third world city subject to frequent communal riots to one of the world's richest. So rich that Singapore does not have cheap anything anymore.

Now, I do feel sad for HCL, TCS, Infosys and Wipro. Their business model involved selling Indian brains cheap and we got projected as digital coolies as this Bloomberg article demonstrates. They earned a name as ‘outsourcers’, got blamed for destroying American jobs. During all that time, they never thought "We can take our profits and invest in long term R&D driven products". They could have easily done it - each of them have had billions of dollars of capital and hundreds of thousands of engineers.

It is even sadder when you read that HCL actually had a business model to partner for R&D work:

Still, for the 787, HCL gave Boeing a remarkable price – free, according to Sam Swaro, an associate vice president who pitched HCL’s services at a San Diego conference sponsored by Avionics International magazine in June. He said the company took no up-front payments on the 787 and only started collecting payments based on sales years later, an “innovative business model” he offered to extend to others in the industry.

Think about it. HCL was basically investing in R&D along-side Boeing. If the product never makes money, HCL never makes money. Yet, HCL did this investment as a subservient junior partner. Can you imagine a Steve Jobs agreeing to such terms? Trust me, if I am going to invest in R&D, I will demand creative control of the project. Given that HCL is taking such risks of R&D, why could not they build products themselves? Basically Indian senior management did not show enough faith in Indian engineers to build the products. That is the root of the problem.

Contrast that to the Japanese. Mitsubishi, which always had aerospace dreams, also was an R&D partner for Boeing. They recently launched a plane of their own, and it is now approved for flight by the FAA (https://www.aero-mag.com/mitsubishi-aircraft-corporation-introduces-spacejet-aircraft-family/; http://www.flythemrj.com/).

I have always looked to the Japanese for inspiration in these matters, an impoverished and over-populated Asian nation that made it in the world through sheer hard work and persistence. That is why, from the very beginning, we used Japanese companies as role models. For the first 10 years of this company, that made it very hard for us to hire talent, because establishing deep know how and make enough money from products to pay people well was hard. But I always felt that any shortcut would destroy our self-esteem as a company and was not worth it.

We have built core technologies from the ground up. We don't outsource to anyone. We have showed the world we can build these products. We take full responsibility for those products - when things go wrong, I am on the front-lines fighting the fight. I won't throw our employees under the bus. Now, after all this, I hope HCL and other IT services companies draw the right lessons. As an example, HCL can start with drones - India itself needs large numbers of drones for everything from agriculture to traffic management. We may feel we have no "domain knowledge" to build drones. But the Chinese, starting with equal lack of domain knowledge, figured out drones and they are global leaders in drones now.

India's intellectual slavery

There is a deeper problem here. For the most part, Indian senior management in most companies is in thrall to what I am going to call the Harvard Business School ideology. It was Harvard and its ilk that supplied the core philosophy here. A lot of the fat-bonus collecting senior management in America were Harvard/Wharton/Stanford/... MBAs. Indian companies have faithfully followed the blueprint from Harvard and its ilk. The vision in much of Indian industry can be accurately summarized as: "Our vision is to faithfully follow the latest intellectual fad out of Harvard". This is intellectual slavery at its finest. Harvard loves that, of course, and it also helps that a lot of the false-ideology-pushers at Harvard are also Indian professors.

You may think I am exaggerating. Narayana Murthy, founder of Infosys, had Harvard Business School professors on his board of directors, and he drank that intellectual ‘kool-aid’. Harvard reciprocated the love. Narayna Murthy set up the "Infosys Leadership Institute" in Mysore to train its future generation of leaders at Infosys. After all that Harvard-inspired leadership training, Infosys has hired the past 2 CEOs from outside, because it could not find one person amongst its hundreds of thousands of employees (many of them trained at Mysore) who would qualify to lead the company. This is sad.

Now, contrast that with what Steve Jobs did (Tim Cook, long term Apple veteran), and what Bill Gates did (Satya Nadella, long term Microsoft veteran), and what Larry Page did (Sundar Pichai had spent over a decade at Google).

Indian management simply does not have the gumption to invest in forward looking R&D. One reason I wanted to create a School of Philosophy is to groom the next generation of leaders, desperately needed in India (and not just inside our company) who have the gumption to think for ourselves, and do not become intellectual slaves of any fad, particularly the Business School fad, that puts short term financial profits ahead of long term vitality of a culture and a company. It is that fad that destroyed the Boeing culture, and brought down those planes; Indian programmers most certainly had nothing to do with it.

I really wish Indian services firms realize the fundamental problem with the outsourcing business model where we get the blame without having the responsibility.

( The paper is a senior analyst’s individual scholastic articulation . The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>

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