Wednesday, January 28, 2015

Not Personal

I have always been a team player. The guy making a lot of noise and trying to rally people to the cause. When you spend the majority of your waking life at work, your identity can start to get wrapped up with what you do and where you work. It becomes a cause. Introductions typically start with what work you do and that frames the conversation. This is a fair assumption since weekends often become recovery periods rather that a real time to pursue any other interests. So business can quickly become very personal. Your life can become the habits of the commute, the meetings, the colleagues, the goals, the competition, the career path and if you do a good job, the recognition. Some people are able to make protected bubbles where they can leave work behind when they head home. I always struggled with that, and am more of an all-in kind of guy.

The idea of a 'job for life' has faded, and there is an asymmetry between companies and the individuals who work there. One of the key tennets of sensible investing is to have a margin of safety. That means that even if you think you are right, you want to have a buffer so that being wrong doesn't matter that much. Businesses are very aware of this and so focus on something called 'key man risk' or 'key client risk'. You don't want to have too much of the future of the business reliant on an individual, since if she leaves the company will fail. You don't want to have too much of the future reliant on one client for the same reason. Sensible investing does the same. You don't invest all your money in one business since even if it has fantastic management, an impregnable competitive advantage, a loyal client base and incredible prospects - things can still go wrong.

For ordinary individuals working for one company, you have no such buffer. You can build one by investing in your skills and keeping in touch with other prospective job opportunities, but your risk typically won't be quite the same as for the company. We like to speak of a company as a 'they' or as a person, but a business isn't that. A well run business exists beyond the individuals that make it up. It can have a culture, and the individual decisions that get made may tend to align with each other. But it isn't a person. Sometimes decisions will be made that affect the individual significantly more than the company. The cold, hard, impersonal truth can be the best thing for the clients and for the business, but terrible for the individual. In 'Revolution', Russell Brand bemoans the loss of jobs in motor factories where shifts are made to locations with cheaper labour. This is devastating for the people losing their jobs. Sometimes this is devastating for entire cities - see 'The Ruins of Detroit'.

I don't think the answer lies in Brand's suggestion of co-operatives running the businesses. There wasn't an evil mastermind trying to destroy peoples lives. The work could be done cheaper elsewhere. Consumers want cheaper cars and there are plenty of people in the poorer countries who would have been pulled from poverty by the massive outsourcing of manufacture to poorer countries. I think the answer lies in guarding against defining ourselves by our jobs, and focussing on managing our own careers, and lives in the way businesses manage their futures, and investors manage their risks. 

This is really hard to do since businesses want to get the full-time passion of an employee. There is a feeling of disloyalty if you are constantly going to job interviews. There is the emotional cost of going for interviews if you aren't really looking. It would be like dating while in a relationship. Although, if job hunting is like dating, we all know that there is nothing less attractive than desperation. Those fighting in the name of 'Labour' often fight for job security and contracts that ensure full time employment rather than actually focussing on increasing the bargaining power of those who are working. If companies had to compete for the time of employees by providing interesting opportunities, that would be quite a big incentive to improve conditions.

To level the playing fields, it may mean you need to think of your career as a business or an investment portfolio - not an all-in bet.

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