What To Know To Get Promoted Quickly In Big Tech
May 20, 2020
(This is an 80/20 post. It’s 80% of the truth in 20% of the time.)
Most publicly traded companies are C-Corps. A C-Corp exists to make money for its shareholders. When someone buys a share they are hoping the share’s value will increase by at least ~8% per year. This is called capital appreciation. If a company’s shares don’t increase in value by ~8% per year, companies pay people to own shares. This is called dividends. In summary, companies exist to appreciate capital for its shareholders or to pay dividends.
There are many shareholders. Some own a lot of shares and some own a few. Some are in it for the long term while others come and go. Because corporations ultimately exist to make shareholders money, shareholders get a vote per share. Much like the electoral college, there are different classes of votes and the decisions are about who will represent those votes on “The Board Of Directors”. The Board is some number of elected individuals that get to represent the shareholders’ interests which are:
- make money in the short term,
- keep making money in the long term.
Shareholders vote to hire and fire The Board and approve or reject raises for them.
The Board Of Directors
Usually members of The Board care deeply about keeping their jobs because they own a large portion of shares themselves or because they enjoy the status and pay of being a board member. Board members have three primary powers:
- hire or fire the CEO,
- vote to give the CEO a raise,
- propose a vote to give themselves a raise.
The dynamics of how little or how much the board tries to involve itself with the CEO’s day to day operations varies from company to company.
From there the CEO hires a set of people they trust to delegate their responsibilities to. While the CEO is a legal office, the rest of the positions in the eyes of the law are employees. Technically the CEO is responsible for everybody and has the final decision making power. Because in practice that doesn’t scale CEOs delegate out their powers. Various employees get delegated various powers and depending on their style delegate their own responsibilities.
CEOs are responsible for growing the company’s stock prices about 8% a year. Ideally more. If they don’t, they usually get fired by The Board. If they do, and especially if they exceed the company’s goals, they get paid more and get more shares to try to keep them for the longterm while their shares vest.
Because CEOs are human like everybody else, they realistically care about 3 to 6 initiatives a year that they think will generate significant additional revenue. They also care about not tarnishing existing revenue streams by hurting the brand or doing something bad that will result in long term losses.
You can easily tell what CEOs care about by looking at earning reports. The things they mention as “strong” or talk about over and over again without any seeming change are the “protect and preserve” assets. The areas that get split out into their own revenue streams or are shown to have significant growth are usually the high growth parts of the company. Those are usually the 3-6 initiatives.
If you work in the part of the company chasing one of the top 6 initiatives of the CEO, you’ll usually get promoted fast if you do well. You’ll also get paid a lot. Because not a lot of people know how to discover value quickly, you’ll be hard to replace.
If you work in the part of the company in maintenance mode you’ll usually hear a lot about the “culture” of the team and worry more about “fundamentals” such as quality. The better you are at quality and support the more money you’ll be paid to stick around and protect. Since there won’t be much room to learn and grow, money and fun will be the top tools used to keep you. Because your skills are likely replaceable, your skillset will quickly become commoditized.
There are usually 5x to 10x more people per role to de-risk. This will make your scope feel tiny. Paying $10M instead of $1M is a small price to pay when the CEO is protecting $1B or $10B.
C-Corporations exist to make shareholders money. Shareholders elect the Board of Directors to supervise the operation of the corporation for them. The Board Of Directors put a CEO in charge to run the company. If everyone does well, everyone makes more money. If something is not going well, different parts of the chain get fired depending on who’s perceived to be the source of the problem.
CEOs care about 3-6 initiatives per year. Those initiatives need to grow the company’s revenue about 8% per year. CEOs also care about making sure existing sources of revenue don’t decline and that the company’s long term revenue potential is protected.
As an employee you’re either working in the high growth sectors of the company as can be determined by the company’s earning statement or you’re on maintenance duty in the protect and preserve parts of the company.