Load-bearing / Career-minded / Act Two rationales @ Irrational Exuberance

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- Load-bearing / Career-minded / Act Two rationales

Load-bearing / Career-minded / Act Two rationales

One of the common conceits in leadership is that nobody is truly essential for a company’s continuity. I call it a conceit, but I do mostly agree with it: I’ve felt literally sick after hearing about some peer’s unexpected departure, but I’m continually amazed at how resilient companies are to departures, even of important people. About two-thirds of Digg’s team left in layoffs in 2010, but we found ways to amble on. Much of Uber’s leadership team turned over in the 2017 era, and it was chaotic, but they continued on.

However, even if organizations are too resilient to collapse from departures, some departures are more impactful than others. I think of folks whose departures would leave a large hole–whose departures require reworking how the company works–as “load-bearing.”

Load-bearing

Someone is load-bearing to the extent that there’s no meaningful way to replace them. Their departure would leave an irregularly shaped hole, such that no existing member of your company can fill it, and hiring an external candidate to fill it is also impractical. For example, someone who is a deeply empathetic people leader, and a deep expert in machine learning, and has domain context in accounting. Sure, it’s possible to find such a person, but it’s quite challenging in a time-sensitive role.

Once you start factoring in holding specific relationships, e.g. someone who’s a great engineering leader and was also able to be the glue connecting the finance and product teams because they had a great relationship with both leaders, then it’s simply not possible to replace some individuals. Instead you have to change the company’s internal system to manage their departure.

Even if you personally don’t believe in load-bearing employees, most large companies do. It’s an open secret that most very large companies (think Facebook or Google) have special equity programs for employees believed to be in this category, such that they can’t rationally leave the company because no competing company can match their current compensation without violating their internal compensation rules. In some cases, they can’t match it even if they do violate their internal compensation rules.

It’s inevitable to have some number of load-bearing employees at any given point, but it’s a bad sign if the identities of load-bearing employees remain the same over time. A healthy organization rotates load–bearing-ness across different employees over time rather than reinforcing the dependency.

If you find yourself in a load-bearing position, digging your way out is the same incremental process as succession planning. This takes a long time, but it’s doable if you are willing to accept necessary tradeoffs that in the short-term reduce your own impact to create greater organizational durability in the long-term.

Career-minded

I think the concept of “load-bearing people” effectively explains a conversation I had recently, where a startup CEO told me they backchannel reference checked each executive candidate early on to make sure they were not “overly career-minded.” The reference checks were intended to derisk the executive joining, becoming a load-bearing person, and then leaving soon thereafter. To, in the lingua franca of CEOs, determine if a candidate is a missionary or a mercenary.

It’s hard to disagree with the premise that load-bearing people who shift roles frequently are disruptive hires, such that it’s worthwhile to reduce the risk of voluntary departure. This is particularly true today when executive retention has gotten more difficult. In the 2012-2022 period where valuations rapidly climbed, financial packages became “golden handcuffs” that kept executives in their current roles. That’s less true today, where more executives have underwater compensation packages. Further, the low points of being an executive–layoffs, shutdowns, and so on–are more frequent than they were last decade, and each is a moment where an executive might reevaluate their current role.

I do think that a more nuanced mental model of executives–who are nothing more or less than people–makes this conversation more interesting. For example, I might suggest talking through the premise of A forty-year career with a prospective executive, and using that discussion to determine their priorities for their next role. How do they stack rank their personal priorities across profit (increasing their networth), people (building their network or working with a familiar group), prestige (increasing perceived value of their career), learning (increasing their own abilities), and pace (managing the time between work and other components of their life)?

As usual, reality is most interesting in the details. Many people who you might consider “optimizing for their career” would stack rank those areas very differently. Someone maximizing for learning in 2024 might change roles frequently because many companies are narrowing their focus to areas where they already understand how to operate an effective business. Conversely, someone pursuing a learning objective might also conclude the opposite, and decide to stick with a financially struggling company because it has so much to teach them. This era is the first opportunity for many recently emerged executives to learn to operate a financially responsible organization, a learning lab for handling change management effectively, and an education in showing up for their team each day despite challenges.

Act Two rationales

Switching away from the CEO or hiring manager’s perspective for a moment, I think it’s interesting to dig a bit into why executives themselves choose to stay in challenging roles. The profit/people/prestige/learning/pace model from “a forty-year career” remains relevant in explaining behaviors of executives who are optimizing for their career, but there are a small but meaningful number of executives who are beyond career optimization.

For example, imagine someone who’s spent fifteen years at Google or Meta, and is leaving to become the engineering executive at a startup. They’ve already fulfilled their financial goals. They have a large network from working within such a massive, well-positioned organization. Maybe their first startup role is oriented around a certain sort of prestige (“I’m more than just a FANG leader, I can succeed in many environments”), but why would they move to a second startup executive role three years later? Sure, many don’t, but many do, and generally I believe they’re looking for dimensions that I missed when developing the 40-year model.

I’ve roughly found four common rationales among these folks:

1. They don’t really have much else to do, or feel a social pressure to continue working. To be totally honest, I can only think of two people I’ve worked with who have been successful as an executive and stayed in the role out of boredom, but I think it’s worth mentioning this bucket as folks believe this category exists
2. Desire to help others succeed. When a load-bearing executive leaves a company, it causes a fair bit of disruption, even if succession planning was done effectively. People in this bucket feel the weight of their many colleagues who haven’t accomplished their financial goals, and recognize that those colleague’s equity in their current employer might be their one and only opportunity to reach those goals. Sometimes this is more focused on helping folks succeed in their career trajectories instead (e.g. this is why I set a personal goal for helping folks I’ve managed or mentored reach executive roles)
3. Continue working with a specific group of people. There are “squads” of colleagues who really enjoy working together and move from company to company. In the worst case, these are a flying wedge that dislodge the existing team, but in the best case this is a founding team or loose collection of folks who are collaborative rather than cliquish. They simply enjoy how the group works together, and want to continue doing it
4. They’ve found a personal mission and/or goal. This was my motivation behind “advancing the industry” which is a mission where my work and writing intersect to become larger than the sum of their parts. Others have missions around bringing technology to government, climate change, artificial intelligence, and really anything else that’s meaningful to them personally. It doesn’t need to be a mission that resonates with others, just that enduringly resonates with themselves

In many cases, I see very successful folks having a two-act career. The first act is operating under the “forty-year career” structure, and the second act working under the above “Act Two” rationales instead. Certainly some stop working as well, which is–like other personal choices–a totally reasonable thing to do.

This disconnection between the first and second acts–and ambiguity about which act a given person is currently in–is the source of many misunderstandings about motivations. Trying to motivate someone according to one act’s rules doesn’t work well if they’re in the other act. For example, I once worked at a company whose CFO wanted to tell our employees that they should be grateful our valuation was declining, because it meant they could use it as a loss to reduce their other capital gains obligations. Unsurprisingly, this didn’t resonate very well with the vast majority of employees who had few capital gains to offset.

That's all for now! Hope to hear your thoughts on Twitter at @lethain!

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