Spot the Chairman

Corporates aren’t democracies. They have shareholders who employ (or are) managers, who set the goals and manage the performance of their teams. Corporates also aren’t free markets. Once you are hired, central decisions get made up the chain and strategies set. The most obvious exhibit to demonstrate this is salaries. If there was an internal market for skills and knowledge, then whoever needed something done would have to bid for their team. Instead, in most companies I know of, the bosses would be irate if a Spreadsheet of everyone’s pay got leaked. Like Chairman Mao managing the iron supply in a 5-year plan, the central powers need to trust the train of information about who is doing what. Layers of grades and metrics can be added to maintain the illusion of price (salary) and value bearing a relation. The beauty of free markets is the lack of pretence. Price isn’t value. It is a way of matching supply and demand. It is very noisy, but if both parties are happy, value is created. In Corporates, this falls apart because (1) the employee is full time, and (2) we don’t talk about pay. In some ways that is good. Imagine your pay moved like the markets? To cope with that you can’t live hand-to-mouth. To cope with noise (transparency and truth), you need to create space to breathe.

Can you handle the truth?