John Dvorak's blog pointed to a column by Robert X. Cringely. It's a fascinating column that intelligently covers several topics, but eventually it focuses on how to improve an IT organization while cutting it. His solution is to fire the (likely incompetent) boss.
Cringely reminds me of a time in my career where I and my boss audited a large software organization. We eventually brought a lot of bad news to the vice president of software development at that company, including the fact that the programmers were a C+ group. (He had thought they were A- at least.) His organization was not producing, and hardly anyone realized how far behind schedule they were. He asked us how to improve his organization. We couldn't bear to tell him: he had to go. This was just one more case where you could only improve the group from the top down.
Imagine a really fine programmer coming to interview at this company. They desperately want to hire him, to improve their staff. But he sees that if he takes a job here, he'll be working for incompetent management. He sees that his coworkers won't be very competent, and their work will make his own work more difficult. He could hardly miss all the signs we saw. He won't take the job. When an organization is a mess, you can't fix it from the bottom up.