The Destruction of the Corporate Ladder.

The corporate ladder is being destroyed, can you see it?

Christine Cacioppo over at Union Square Ventures wrote a great post yesterday called, What Comes Next?.  Christine is an analyst at USV and has seen over 160 start-up’s this year. She’s attended just about every tech start up incubator there is. Knowing this, I was very interested in her thoughts. Her post title was perfect. If anyone is going to know what’s coming next it’s going to be her. If we assume that start-ups are working on the next big “thing” or in the next big “space”, then Christine is right in the thick of it.

Christine noticed two specific trends; Software is developing its own component industry and work is shifting toward a peer-to-peer model. It’s the second one that got my attention and the one we all need to be paying attention to.  The future of our careers depends on it. Especially if you are younger than 40.

This excerpt says it all:

Workers who can’t differentiate themselves using their reputation will be commoditized.

Christine is absolutely right.

I started this blog 3 years ago.  I recognized, as an executive, it was becoming increasingly more difficult to move up the career ladder. Performance was no longer the sole determinant behind career growth. As I moved up the career ladder things such as politics, relationships, experience, brand, ability to play the game, etc. all played an increasing role in executive career advancement. To address these changes and increase my ability to move up the executive ranks I started to blog. My thought was to document my knowledge, my approaches, my ideas and by doing so I would create more opportunities for advancement.  It worked to a degree, but not exactly as expected. What I didn’t expect is what makes my blogging journey interesting and what makes Christines observations so germain.

Blogging increased my exposure. Blogging improved my reputation and it expanded my network.  However, blogging didn’t move me up the corporate ladder. It created ME as a corporation.

Companies didn’t start asking me to come work for them. Recruiters weren’t calling me to be some companies new EVP of Sales or Chief Sales Officer. Instead, companies started calling me to help them fix their organizations. They didn’t want me as an employee.  They wanted me to work with them, not for them. They wanted my knowledge and wisdom. They wanted me to help their sales executives. This outcome of blogging was not expected.

Here is the money quote from Christine’s post that supports what I experienced:

Between identified, liberated individuals and the nameless, faceless drones of Mechanical Turk lies identity: does it matter who performs the task at hand? If the worker’s background, skills, or experience matter, there’s likely to be higher variance in demand for a particular person’s services, and free agents will be sought after and chosen by reputation on services built for those purposes. Less-skilled people are likely better suited for tasks for which identity doesn’t matter, and other marketplaces that don’t include a concept of reputation will provide access to a global pool of workers.

This is spot on and is happening now.  Identity and reputation matter when the service can not be boxed or is not repeatable.  When a service varies based on who is performing it, and is impacted by the knowledge, experience, understanding and the creativity of that individual, reputation and identity become paramount. If companies can get the knowledge, experience, and information they need to achieve their goals without creating more employees, they will. Employees were necessary when information didn’t flow well.

One reason to create firms is the coordination and signaling problems of situations with imperfect information and transaction costs. As technology increases information flows and decreases transaction costs, individuals can leave their old employers and strike out on their own. Their livelihoods will still depend on providing valuable services in exchange for fees, but they’ll do so as freelancers – and on their own, they’ll capture more of the value generated by their work.

Information is flowing like the Colorado River and is only increasing. Transaction costs are decreasing. Firms/companies can perform and compete with fewer “employees” therefore reducing costs and increasing margins. At the very same time, those performing the service, the freelancers, will capture more value for their efforts.

What does all this mean?  It means reputation and identity matter and are going to matter even more in the future. It means jobs, once consider corporate ,will be outsourced or freelanced. It means measuring job experience and resumes to identify a workers value are diminishing and will eventually disappear. It means reputation will be a huge determinant in success or failure. It means those who are proactive and deliberate in managing their reputation their brand, and their service will out perform those who are not.

To put a fine point on this last paragraph. Sales is NOT and will NOT be the nameless and faceless. Identity and reputation will matter in sales.

I started this blog to move up the corporate ladder.  Instead, I’ve built a reputation. The reputation is giving me a lot more than I expected. The one thing I can say that it hasn’t given me is another rung on what appears to he a very wobbly corporate ladder.


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