Double Journey

I went back to my ten year college reunion this weekend.  Princeton has reunions every year.  The big reunions are every five years (the biggest being the 25th reunion) and as such, I decided to go down for the day since I was in New York City.  Quite a crowd turned out.  Despite it being her 25th, Michelle Obama was not one of them.   It was more enjoyable than I would have predicted.  Last time I went to reunions for my fifth, I did not have a particularly good time.  I decided to go for the entire three day event.  By the end of the second day I really was wondering what the heck I was doing there.  This time, I decided only to go for the day (and none of the nighttime activities) and it ended up being the perfect amount of time to see the campus and a few of my friends I wanted to catch up with.

One of the things that sticks out to me though was a fact that was given at the end of the P-rade.   As my classed marched down I heard two facts.  One was that my class, the class of 2000, was setting attendance records for the 1st, 5th, and 10th reunions (all reunions I attended).  But the more interesting fact was that the number one profession of my class was being a lawyer.  To be exact, it was stated that 14% of my class had become lawyers.

Now, I went to an Ivy league school and you would expect a large percentage of my class to be in high paying jobs.   Since law is a high paying job it does not surprise me that it is a profession many in my class pursued  What surprised me was that it was number one.  And as I thought about it I though what a sad commentary that actually is for our society.

Don’t get me wrong.  I think lawyers are necessary in our society.  I also don’t think all lawyers are scumbags like others might.  But for me, law is an ancillary profession.  It is best as a supporting function to the creation of value and wealth to our society.   It is in the same class of profession as accountants and clerical work.  These are jobs that are absolutely necessary but at the end of the day is overhead to the actual creation of wealth.   This is in contrast to things like medicine, manufacturing, or the creation of intellectual property that actually drive the economy and create value in our lives.

So what does it say that the brightest mind in the country if not the world are pursuing careers that are not creating wealth to our society?

I think it says a couple of things.  First, I think it says something about how the cost of obtaining a world-class education has skewed the choices we make.  Most of my class graduated with quite a bit of debt.  This problem is only getting worse has college becomes more and more expensive and having a college degree does not make you stand out anymore.  It used to be, for my parent’s generation, that having a college degree was not the norm.  Now, all my friends have one and that in itself means you have to find other ways to differentiate.  Most people are finding it necessary to get a post-graduate degree to really make themselves stand out and earn the money needed to pay back these college loans. This is a true fact.  I am the ONLY one of my college friends that does not have a post-graduate degree.  Think about that for a second.  I’m the only one.  I have lots of friends from college and they all decided to pursue even more education.

The second problem I see is that we are emphasizing the wrong things. As a country, we have created a society where one of the best paying jobs is being a lawyer.  Now to be fair, this has been the case for quite a while.  But I would argue that before it was more a function about the scarcity of the education required to practice law than it was about the voracious appetite to produce lawyers.  But we are now pumping out lawyers at a very large rate.  There must be an overwhelming demand for lawyers in order to keep salaries as high as they are.    This is because we have created such a complex set of laws and a society that is so litigious that it is required for any large corporation to have an army of lawyers ready to protect and to sue.

So rather than create professionals ready to find the cure for cancer or to create the next great product we create an army of people ready to sue others.  How on earth can we change this dynamic?

This past week, a co-worker of mine had her last day at work.  She was leaving the company to attend business school.  While I was happy for her, it got me thinking about my own experience applying to business school and my eventual decision not to attend.  Many people I know have attended business school.  I often tell people that I am the only one of my Princeton friends who did not get some sort of higher-level degree.  It is absolutely true, no exceptions.

So you would think that someone like myself, ambitious and smart, would have done like my friends and gotten an MBA.  But things for me were never that simple.  So I decided to outline why I think someone contemplating going to business school should perhaps think twice about making a decision like this.

First off, let me give you a brief account of my own decision.  I only applied to two MBA programs.  Harvard and Stanford.  These are two of the top four business schools and the hardest to get into (Penn and Northwestern being the other two).  The chance of success is quite small.   While this may seem crazy on my part I definitely had my reasons.  Like most things, it came down to money.

At the time I applied to B-Schools I was already making six-figures.  The average starting salary now for a Harvard MBA is $120,000.  When I applied five years ago it was even less, averaging right about what I made.  So just do the math.  Attending a top-tier business school will cost you somewhere in the ballpark of $200,000 for two years.  You add that to the opportunity cost of someone like me (lost salary) and now you are looking at something close to a cost of $400,000.  Yikes!  Now consider that on average, I could not expect to make more money upon graduation.  How would I ever make up the $400,000 difference?  The numbers get even worse at less prestigious universities.  Their graduates can expect to earn less.  So now you see why I did not apply to other schools.

So if I am not going to go to make more money, the only other reason I would go is to get a job I might otherwise not be able to get without an MBA.  I have two potential career paths.  I either want to start my own business or I want to be an executive at a large technology company.  The goals are similar in that I want to be the boss at a high growth and exciting technology company.  The paths are only different in the risk I’m willing to take to get there.  Do I need an MBA to do either of these two things?  Not really, but it would have made it slightly easier.

Starting my own business obviously does not require an MBA.  However, getting one has two advantages.  First, I would focus on classes in entrepreneurship.  Even today, I’m not totally sure where I should start if I really wanted to start my own business.  How would I go about making a business plan?  How would I get funding? What are the pitfalls I should avoid?  Second, it is all about the network.  It is a very big reason to go get an MBA.  The circle of friends and colleagues you will encounter will go well beyond your two years at school.  These are the people you will count on to tell you of new opportunities or help you get your own business off the ground.

But when I looked at it, the benefits just did not outweigh the cost.  If I was realistic, I thought I could get where I wanted to be without having to put everything on hold for two years.  Here is a dirty little secret of the top MBA programs.  Those who are most likely to attend are often the people who probably need it the least.  It is a strange situation in that you have to show the schools why you need to attend their schools to achieve your goals but you have to be the type of person who can succeed given almost any circumstance.  How is that for irony?

In any case, the bottom line is that you should not get an MBA if it does not actually make any financial sense to do it.   Just do the math.

Lifetime incremental increase in salary > Cost of MBA + Lost Income

Keep in mind that it is the incremental increase you could not have gotten if you did not go get your MBA.   If you did not get your degree, you would still get raises at your current profession.  So you have to think of the total amount of money you could gain above and beyond what you would normally be able to do.

For completeness, here are some other reasons not to go get an MBA.  These are actual reasons I have heard given.

• You don’t know what else to do
• Everyone else you know, friends and family, have an advanced degree
• You are tired of working and just want a two year break
• Might as well, you don’t have a job currently
• It is expected of you
• You want to move across the country and your parents will foot the bill for school

About two weeks ago, my company just went through a second round of layoffs.  This is happening about six months after we already had one round of layoffs.

Most people in my situation would probably be very concerned right now.  I am not.  I have been through layoffs before, and these are not quite the same.  This round was truly a right sizing of the company.  The company is still profitable and there are very few situations which would cause that to change.  Now, we have not been making as much money as we had forecast a year ago, but the fact is that we are still making money.  This is contrast to my experiences at a former company where we were bleeding cash and were doing everything possible from going under.   That was a pretty miserable experience as there was very little chance of turning that company around.

This is not the same situation.  There is very much some good opportunities for the company and for its employees.   How can I say this?  Some of the best opportunities are created when things look their worse.  One can just look at Warren Buffet’s strategy, buy assets when they are distressed.  Right now is a great time to invest in the market if you can buy the right things at the right price.  While it can be scary to double down when things look so awful, those are when the best opportunities arise.

The same is true during layoffs.  For those individuals who step up and do more, the opportunity is great.  During most layoffs, it is not as if the work just disappears.  The work has to get done somehow.  In fact, most of the time, there is more work to do as the company must better execute on a plan if it hopes to return to the “good” times.  During this round of layoffs, I have had to take on much more responsibility.  I had originally come in as the senior Program Manager on the team.  Shortly after the first round of layoffs, I inherited the responsibility of managing the development staff on a temporary basis  It was a responsibility I took reluctantly even though many saw it as a step up (I did not see it as a step up but that is another discussion). After this round of layoffs, I inherited even more responsibility and am now in charge of another development group as well as the entire testing organization.  Along with the additional responsibility came a promotion to a Director level position.   While I would have achieved this promotion in due time, it was much easier to obtain given my additional level of responsibility and the current organization structure.

My career growth has been quite fast and most of that has been through hard work and a good attitude.  But I’ve been lucky at times because I have been in the middle of turbulent and often difficult situations.   If things do not change, new opportunities are not created.  This is why change is good.   This is why I am not panicking even though my portfolio has taken a huge hit in the last year.  I planned carefully and was prudent when I should have been.  Because of this, I can now take advantage of opportunities when they present themselves.

I am one of those people who will always do whatever it is to make sure my team succeeds.  If it means staying late, picking up more work, or doing whatever it is nobody else wants to do, I will do it.  Now at most companies, there are more problems than there are people to solve them.  Those who are willing to step up and grab responsibility for a problem will tend to be the ones who advance their career the fastest.

This week, I found out that one of my peers will be leaving my company.  This leaves a huge hole as this person was responsible for majority of engineers in the largest division. Despite the fact that I am no longer in the development org chart, I do program management, my boss has no logical person to temporarily take charge of the team while we find a replacement.  So I, being the person that I am, told him I would step up and manage the team.  He understands that other things will drop from my Program Management plate.  In reality, I just doubled my work load as there is nobody currently to back up my Program Management responsibilities and they are too important to not get done.

But was this a good idea?  I’m still not sure.  This takes me out of my core competency and means I will do two jobs at a lower level than my normal standards.  Now, I’m sure I will get brownie points for stepping up, but will it be worth it?  In the end, I think so, I would not have done it otherwise, but is the extra stress and workload worth a few extra brownie points?  I guess we will find out.   What do you think, should you always take on more responsibility?

Today, I found out that one of my coworkers is doing what I did, quitting without another job lined up. He is about my age, maybe a little bit younger, but he just didn’t feel that the opportunity was right at our company and has decided to go and try it on his own. He doesn’t have a real plan but knew that he had to move on. I know a few more people who have done this or are planning to do it. Most of them are younger without a lot of obligations. Most of them however have really good paying jobs. Free Money Finance just recently had a post on whether or not you should quit your job without another one lined up. He came down on the side of you should definitely not.

I however, having done it, really do see both sides of this argument. It really just depends. Most people are probably unhappy with their job in one form or another, especially younger people. I think my generation more so than any other before take job satisfaction to be very important. Our parents understood that a job was just that, a job. You didn’t like your job, you did it to put food on the table. But somewhere along the way that changed. A job became who you were, it defined you. We constantly heard our parents tell us, “Do what you love” and we took it to heart. That has caused my generation to job hop until we find something that really makes us happy. The problem is that it is always still a job, and many people don’t ever come to realize that. They jump from job to job always hoping to find something better. I know very few people my age that haven’t had at least two different jobs. I myself am on my fourth while only being out of college for a little under eight years.

I disagree with the conventional wisdom for a few reasons.

1. You can be doing a lot of other things besides a 9-5 job to earn money - This didn’t use to be the case, but you can spend your time coming up with alternative ways to earn income. In the end, this might actually be smarter if you can make it passive, and then return to the work force. You will have double income!
2. It really depends on your financial situation - If you are like me with no obligations or debt, and could survive years unemployed, than you have little to worry about. Believe me, the fear is bigger than the reality most of the time. This is where living frugally really pays off.
3. Depends how much you make and how in demand your skills are - I make a lot of money. There aren’t a lot of jobs that pay what I make now. It isn’t easy for me to just find a job that will pay me what I want to make. However, I have the advantage of having skills highly in demand, so most of the time I have very little trouble finding a new job when I really want one.
4. Money isn’t everything - Coming from a guy who highly values money, this may be shocking, but it’s true. I would rather have a job I liked and get paid less for it than a job I hated and got paid more for. So I would be willing to take a job that paid me less if I ever got so desperate. That being said, a lot of people are miserable no matter how much they get paid, so this makes the argument that perhaps you should just stick it out. Might as well get more money than less money for the same level of misery!

So what do you think? How bad of an idea is it to quit a job without another one? Do you think it really is an epidemic among the younger generation?

Do you know a guy at work who seems to always have a lot of work, but in reality you know he doesn’t?  They appear in most companies.  There the guy running around all the time complaining about how much work they have and how they can’t get any of it done.

I’m not saying that everyone who does this doesn’t actually have a lot of work.  Many people are genuinely overworked.  However, I’ve come to the conclusion that most people do this to themselves.  I will admit, that sometimes I probably made it seem like I had more than I had simply so it would look like I was working hard.

But I’ve decided to go the other way on this one.  I want it to appear that I’m always in control.  Think about this carefully.  I’m at a point in my career where I want to make the move from middle management to upper management.  This is a big jump, and the rules at the top aren’t the same at the bottom.  While working your ass off is what it takes to get where I am, I don’t think it will get me much further.

Executives need to always be in control of the situation.  Things can not be hectic around an executive.  Having “too much work” is a sure way to cause chaos.  Things get missed when you are overworked, and when things get missed at the top, they have a BIG impact on everyone else.  Further, it is crucial that management always be able to do more with less.  If you can’t manage your own workload, how are you going to be able to manage the workload of others.  How are you going to manage it when you inevitably have to cut staff and produce even more?

This isn’t to say I’m not going to work hard.  Of course I am, it’s just who I am.  But I’m going to be sure not to make it seem like I have “too much work”.  What are your thoughts?  Is it more important to look busy or look like you can manage your time effectively?

The comic for Dilbert yesterday was fantastic and it actually covers a topic I’ve been wanting to talk about. I’ve done a lot of thinking about how reviews work in corporate America and how they fail miserably at achieving what they are set out to achieve. Reviews should be set up to give honest feedback to someone about their job performance, set clear goals going forward, and to motivate an employee to reach their full potential.

Everywhere I’ve worked, there has always been a mantra that “Our people are our most important asset”. This is particularly true in the tech world because your business is based on information and knowledge which must be created by smart and creative people. So, on the surface, there is at least some recognition that for a business to succeed in this space, they must have great people.

But almost every employer bases their review system on a bell curve. Now think about that. A bell curve represents a normal distribution. It is supposed to represent a nice AVERAGE population. For every “great” person you have, you must have someone who is not so great. The majority of the people will be “average”.

Now, I’m all for differentiation. I believe people need to be ranked within an organization and under-performers need to be pruned. But to go into a review with the expectation that your employee pool must come out “average” is laughable. If you are a knowledge based business, and you have average people, you are going to get average results. It’s a simple equation.

But differentiation does not mean that there needs to be winners and losers. I think the only incidence that I have heard of someone getting this right is Netflix. Netflix has a policy of keeping only the best. There are no “average” reviews. Getting an “average” review means you will be shown out the door. They openly advertise that they pay more than market rates. And I agree. If you want great people, you need to pay for it. Great people know they are very hard to replace. You may pay these people 15% more, but you will get 100% more work.

It reminds me of a controversy at Princeton when I was there. Grade inflation was a big topic there and at other Ivy League schools. It seemed that too many students were getting A’s and B’s. At the time, I agreed. I thought more people needed to get lower grades. But now being removed from the situation, I kind of see how ridiculous that is. Almost every single person at an Ivy League school was a top performer in their high school. Giving someone an ‘F’ because someone got an ‘A’ would be ludicrous. Someone else’s success should not diminish yours. Certainly, their success needs to be recognized and appreciated. They should get better rewards. But the notion that the only way to succeed is to make sure your peers fail is a very dangerous path to go down. But it is something that corporate America hasn’t seemed to figure out yet.

So now you have that great Ivy League Degree, now what? How do you go about finding a job? Well, it isn’t always as easy as it sounds, even for those with great credentials. Here is my advice. Diversify. No, I’m not talking about your portfolio. I’m saying that there is no one single way you should go about looking for a job. You need to look under every rock you can and try multiple methods to try and find that perfect dream job. (I think the same thing applies to finding the right woman, but that’s another story)

I’ve had four different jobs in my life. I found each job differently. Here is how I did it, and what I would recommend.

College recruitment - If you are still in college, this is the way to go. Many larger companies will come to the university and recruit right on campus. This tends to be great for new college grads because you know that they are looking for good entry-level positions. This is especially helpful, because a lot of time, these are treated as informational. If you are like me, you might not know what you even want to do out of college and this can be the way to go.  Word of advice though, just because you don’t know what you want to do, don’t let on to the recruiters that you don’t know what you want to do.  Employers want to know that you will have a passion to do whatever it is they do.  If you go for a banking interview, you must show you love to bank.  If it’s a tech job, computers need to be your life.  It’s fine to go on lots of different types of interviews, just don’t let it on that you aren’t sure where you will go.

Post your resume online - Probably the least effective way to go about getting a job, but I’m living proof it works. I posted my resume on one of the job boards, either Dice or Monster, and I was contacted by a person in a company looking to fill a position. Most of the time, this method will get you lots of calls from recruiters looking to present you to a company. I have had very little luck with these types of placements but some luck with companies directly. The big advantage here is that if they contact you, they already like your resume, so chances for success here are very good. However, this has the strong disadvantage that you have little or no control over who is looking at your resume or when they might contact you.  Make sure you resume has lots of keywords in it, but still presents well.  You will be found by people searching for keywords, but you will be called because your resume looks great.

Networking - Everyone says this is the best way to find a job. Ask your friends and see if they know of anyone who is hiring. I found my last job this way, and I will agree it is the easiest way to find a job for most people. Getting through the many layers of HR and decision makers can be very hard. Having a friend on the inside can only help you. My advice to all people is this, be friendly at work. You never know who can help you land the next job. Further, be friendly with the right people. While it may sound underhanded, attach yourself to smart people who are going places. Chances are, they may take you with them if you are ever looking for a change of scenery. Not only will these people always have a good job at a good company, but their recommendation tends to carry a lot of weight wherever they go.

Apply directly to jobs you find either on a company’s website or one from a job board - This is how I found my next job but it can be very difficult. Most people will not be able to duplicate my 40% success rate at getting replies back from hiring companies. You would probably be doing well if it was closer to 10% or even 5%. You have to understand, these companies may look at hundreds of resumes. I’ve been a hiring manager. Believe me, I may look through fifty resumes before I find one I like. You have to be able to stand out from the crowd. That’s where a great corporate pedigree comes into play. It can make you stand out. If you don’t have it, you need to be sure that you stand out in some other way. I’ll get to that later when I talk about resumes.  The one very strong bit of advice I can give here is to put some work into each resume you said.  Read the job description, make sure you are a good fit, and then customize your resume to fit the job description.  You don’t have to rewrite the whole thing, just make sure that within 3o seconds, the employer knows you can do the job.

There are still some other ways, but I haven’t found too much success in them. How about you? What ways have you looked for jobs and how successful were they?

So Ningpo makes a good point, I never really discuss what I think “good” is vs. “great” So what is my definition of “good”?

First off, when doing this comparison, I’m going to talk strictly from a financial sense. There is not good or great without great friends, family, and if you are lucky enough, someone to share your life with. So that being said, this is what I consider to be a “good” life. A good life is a life where you are very comfortable, have all the things you need, and with a little bit of work, will continue this way indefinitely. This implies

• Having no debt outside of your primary residence (bonus if you have none of this).
• Having a job you like.
• Having a job or income source that allows you to live an upper-middle class life and afford a few luxuries.
• Having enough savings such that you could choose not to work for one or more years and still be OK.
• Having a savings plan that,if continued, will allow you to comfortably retire at your current consumption level by the age of 60.

So what makes something great?  Having all the above, but not having to work at it anymore but taken to a whole new level.  You can quit your 9-5 job, and just enjoy doing whatever it is that you want to do, even if that is to work.  You can afford pretty much whatever reasonable luxury that you want i.e. you could afford the BMW but maybe not the Ferrari.  You are probably “good” if you are in the top 15% of the population in terms of income and wealth, you are probably great if you fall into the top 1%.

So what is your definition, from a financial perspective, of good vs great?

My girlfriend was reading a book called The World’s Greatest Resumes by Robert WM. Meier. In it he talks a lot about having the perfect corporate pedigree and how his book can help those that don’t have a perfect corporate pedigree. It tells you how to emphasize certain aspects of your resume, and how to work your way around some of your weaknesses. Overall, I think she would recommend the book, as her resume looks pretty good now.

I write about this because when I asked about the book, she told me I didn’t need it, because I have the perfect corporate pedigree. I laughed when she said this, except she was serious. I’ve never really thought of myself this way despite the fact that I’ve always seem to be able to find a job, and a good job, when I want one. So just what does make a perfect corporate pedigree? While not coming out and explicitly saying it, Meier seems to suggest that a great pedigree involves

• Having an Ivy League Degree
• Working for a big Fortune 500 Company
• Having a continuous work history that shows good career progression

I fit the bill because I graduated from Princeton University, I have worked for two Fortune 500 Companies, Accenture and Microsoft, and I have no large gaps in my resume. I believe I took a small step backwards with my move to Microsoft, but I can easily explain the move and to outsiders it looks like a smart career move. So having these “qualifications” supposedly makes me more desirable to potential employers. Is it true?

Hard to say. I would say there is no doubt that many doors have been opened to me because the Princeton and Microsoft name carry some clout. I have a pretty high success rate of responses to people who I sent my resume to. I would say that of all the resumes I sent out in my latest job search, I had about a 40% response rate. This is a phenomenal number. But I want to stress this. I think this allowed me to get a call back, I don’t think it helped me all that much to actually get the job. But considering the fact that getting the call back might be the hardest part, then this may indeed be a key success factor.

HR and hiring managers might look through hundreds of resumes to fill an important position. Lots of times, they will only scan your resume and look at your eduction, job history, and previous titles. It is important to have something on your resume that will let you stand out from the crowd in this case, and having the above criteria certainly won’t hurt you.

The point of me writing this post is that you need to understand what many employers are looking for in order to prepare for it accordingly. If you have the above pedigree, great, you are set. Just make sure your resume looks decent and that you use the advantage that you have wisely. If you don’t, you need to be sure that you are showing off your qualifications in some other way to stand out. Further, if you have the opportunity to enhance your resume in some way, like going to get your MBA at a top-tier school, or to go work for a Fortune 500 company, you need to seriously consider it.

That’s my admittedly bias perspective. What do you think? How important is having a good “corporate pedigree”?