They paid me to make them more money.
No, really. And it’s not just me. I’ve discussed the relationship between work and wages with a variety of corporate types; from middle management to the C-suite of Fortune 500 companies. Moreover, I’ve experienced the phenomenon that I’m about to describe, both from the standpoint of an employee as well as from the standpoint of a capitalist (e.g. someone that leverages equity and assets to generate greater equity and assets in the future).
The truth is that every worker competing in the jobs marketplace experiences this phenomenon at every job he/she will ever work. It’s just that most don’t ever fully grasp the nature of the exchange.
The first time I experienced this was when working for the CBS Corporation. I was able to implement a basic digital advertising system that allowed the business to turn a profit on a very popular product offering that had always been assumed to be an advertising loss leader that would never be capable of turning a profit and was also able to manifest enough of an increase in organic search traffic to catch the eye of some folks in the C-suite.
I was able to do this while working a shorter workday than most of my colleagues – I negotiated this stipulation prior to joining the organization and it was due to an extremely long commute bordering on two hours – and this led to a palpable sense of jealousy on the part of some work colleagues that felt it was “unfair” for me to work less hours than everyone else.
The workaholic types were the most upset. Probably because I was upsetting their sacred order of late nights, back to back meetings, endless Powerpoint presentations, and long hours of “busy” work.
Eventually, even the concession I was given in terms of daily work hours was not enough. I had been building up a fairly lucrative internet advertising network that would allow me to cover my living expenses and still have $500-1,000 in disposable income left over at the end of each month, so I decided to leave CBS.
That’s when things got quite interesting.
A senior executive, who in hindsight was my most influential life mentors, asked to meet with me as soon as news of my resignation made the rounds. He had given me a copy of the book “Good to Great” early on during my tenure, so between that and other gestures of intelligence and understanding it was quite clear that this gentleman was a serious business executive with a clear vision for where he and his business wanted to be. What he would ask me when I got to his office has etched an impression in my mind that will not soon fade:
He asked me if I would stay onboard with CBS as a consultant, so that I could train my ex-colleagues to operate the systems I had created.
- The pay? They could match what had been my monthly employee salary even though I would only be needed to consult a handful of hours per week.
- The length of the consultation? One year. Guaranteed.
- The payment terms? They cut me a check for 50% up front and 50% halfway through the consulting engagement.
Take some time to let that sink in. They allowed me to work less hours than most of my fellow employees from the get go, and once I demonstrated that even that concession was not enough to keep me around they allowed me to cut my total work hours by more than half while also allowing me to spend no more than a few hours per week in their physical offices.
And it was a very profitable move for them.
What I came to realize is that no matter what they paid me it was much less than the long term return on investment the CBS Corporation would generate if they were able to fully integrate the advertising and marketing systems I had implemented on the corporation’s behalf. In other words, my systems likely generated incremental dividends and equity gains for the corporate stockholders long after my consulting engagement came to an end.
From that perspective, I could actually argue that I got the short end of the stick, but I prefer to think of this particular market transaction (e.g. my profit-generating work in exchange for a tangilble chunk of CBS’ capital) was a true “win/win” situation. In fact, I would argue that this particular example of the labor market in action benefited not just myself and CBS, but also the economy as a whole. I created value for corporation that they could capture on a residual basis. I received a lump sum of capital that would allow me to improve my standard of living and open the door to future capital investments of my own. Both CBS and I were able to stimulate the economy in a more significant way thanks to the new capital we generated literally out of a thin air.
We’ll explore this phenomenon in far greater detail, including potential ways that it can be leveraged to impact immigration, politics, U.S. Fiscal policy and the world economy as a whole. Just please make note of the fact that this brief anecdote I’ve shared is just the first of many instances in which I came to realize that those who have a truly decent grasp of how the economy works (nobody fully grasps it or ever will, but a decent grasp will do) and thereby understand what it means to grow a business – measure the value of their employees and vendors based on the equity and profit they generate, not the number of hours they work. “Scrooge McDuck” a popular cartoon character from yesteryear, said it best when he instructed his nephews to “work smarter, not harder.” Why? Because not all hours of work are created equal. It is not hyperbolic to say that in many instances one person’s hour of work can produce more long-term value and productivity than 1,000 hours of run-of-the-mill meetings and Powerpoint presentations.
For those with entrepreneurial tendencies, both within the corporate workplace, the startup/small business universe, or the non-profit space this is a very valuable lesson to learn. The corporate “workday” as most of us envision it is a figment of our collective imagination that only came into existence once the industrial revolution truly took hold and will likely fade into oblivion once the energy and automation revolutions are more fully manifested and there’s no longer enough human work to go around. If you want to or are forced to sell your physical or mental labor in the the conventional marketplace (e.g. you want or need a conventional job that pays wages) value your labor and look for employees who do the same. If you’re an employer, pay your employees a truly fair wage that will encourage your strongest and likely most entrepreneurial employees to stick around. It’s much more profitable than the typical approach we see with the majority of small and large businesses; paying people the absolute bare minimum and then dealing with the adverse impacts of high employee turnover and low employee output.
We ain’t built for the 9 to 5. Act accordingly.
P.S. Note that this isn’t a treatise on the virtues of laziness. I’m well aware of the value of hard work and long hours in certain key roles and situations. I also understand that in many current fields – like elementary school education – there is no real substitute for physical hours worked. My goal here is simply to help illuminate a very real dynamic with very real implications for things like economic inequality.