Corporate Hustle Series: Cheat Codes
Corporates reward a certain set of behaviours to such an extent, people end up developing separate personalities. Youbecome pre-conditioned to speak a certain way, engage within specific boundaries and become an expert in passive/aggressive communication. When you send a "Kind Regards", both you and the recipient know there's absolutely nothingkind about those regards. How about "as per my previous mail" which loosely translates to "are you a fuckingidiot?". Then there's the "I hope you're well"... you really don't. Do you think people who sign off with "rgds" usethose extra seconds they save to work on developing the Coronavirus vaccine in their spare time?
Of course a large part of this "altered personality" stems from corporates essentially operating within a pyramid hierarchy while still requiring you to be civil and operate within a team. Space at the top is limited. You need to advance through the ranks yet somehow avoid pissing everyone off.
Negotiating life in a corporate is really no different to a season of Survivor. You share office island space with the same crew of people with varying personalities. There's freeloaders on the island (right now you know at least one freeloader in your team) - the person who never cooks rice or goes fishing but is ALWAYS there eating. So you have a discreet conversation with the rest of the castaways to remove the freeloader at the next tribal council. Great! They're gone. Except now you don't know who the next target is. If you can't figure out who the target is - you're the target.
Different corporates have different islands. What works on one island won't work on another. The trick is to develop skills that are resilient and versatile. Learning to start a fire, knowing how to spear fish, extracting fresh water, building shelter and avoiding being eaten are skills which work on any island. More importantly - you want a set of skills that allow you to escape the shackles of the corporate island so you can survive on your own.
Here's the cheat codes to outwit, outplay & outlast.
Become a Specialist
There's only a few elite and coveted jobs with thousands of people aiming to secure these roles. The best way to cement a high earning role is to have an edge in the labour market. Ultimately, how much you're paid as an employee comes down to labour economics. The fancy economic terms involve reservation wages, indifference curves, elasticity of supply/ demand curves, union involvement, minimum wages, etc. Bottom line - if you're part of a small group of people with a highly specialized set of skills which are in high demand, you will be paid handsomely.
One of the key determinants of how much you can earn depends on the elasticity (fancy for slope) of labour demand & supply. The steeper the supply curve, the more difficult it becomes to fill those positions and the higher the salary commanded. Once you overlay the demand side, it ends up looking like this:
Source: A2 Economics
Okay, neurosurgeons generally earn more than cleaners - surprise! Neurosurgery is highly specialized and command a higher wage. Can anyone perform successful brain surgery? No.
How do you beat the market and make sure you're a front-runner for a juicy salary? Specialization. The level of specialization impacts earnings potential. At the core of any specialist field are three main drivers: education, experience and relationships.
A) Education - rack up credentials
In order to hack your salary and end up as a specialist, it's worth understanding the impact education has on overall employment. Here's the unemployment stats in South Africa against level of education.
Looking at the trend across the last 10 years, you're 3x - 4x more likely to be employed if you have a degree as opposed to someone with a Grade 12 certificate or less. A degree gives you an edge in the labour market, but how much more can you expect to earn? Considerably more.
Source: Analytico// BusinessTech
On average, holding a bachelors degree in South Africa will earn you over 4x more than someone with just a grade 12 certificate. Not all degrees are created equally either. The degree majoring in Puppetry Design & Performance might land you a role on Sesame Street instead of Wall Street and there's a good chance you feel like a muppet when receiving your first pay cheque.
Source: Analytico// BusinessTech
Although this is the median income, the lower and upper bound across each field can vary drastically. It's very possible to study computer science and end up with half this salary in your first job
Graduating with a sought-after degree from a high-quality institution with a great GPA is brilliant for breaking in - but it's nothing more than a foot in the door. Ongoing corporate education is a signal you're a leader ready for executive leadership roles and can really step up.
Will an MBA boost salary prospects?
MBA salary data in a South African context is fairly inaccurate given the wide salary ranges and the inability to track the salary changes due to attending a specific business school. The median salary of an MBA holder in SA is estimated at just over R730k. The Financial Times (FT) MBA rankings is widely acknowledged as a great benchmarking tool.
Qualifications from top Ivy League schools result in salary increases comfortably over 100%.
There is a growing movement towards recruiting candidates without any tertiary education although the corporate world is still predominantly filled with roles that require college degrees as a minimum qualification.
The skyrocketing costs of continuing education shouldn't be a deterrent to developing technical abilities since there are a number of online learning platforms and distance learning options which you can use to upskill (worth checking out https://www.edx.org/).
The student debt crisis has demonstrated how earnings don't necessarily always catch-up to comfortably pay off the costs of tertiary education within a reasonable space of time. Paying for a degree from over 30 years ago qualifies as a bad financial decision. Other bad financial decisions include purchasing the AbFlex from Verimark thinking it would result in a chiseled torso.
Bill Gates and Mark Zuckerberg are famous Harvard dropouts & if there's a great place to dropout it's Harvard. The value of top tier institutions isn't about the actual textbook knowledge as much as it is about the network you have access to. For this reason, it's highly recommended to pursue the MBA after notching up a couple years of work experience when you can reciprocate value to relationships and establish enough depth to comfortably pivot into another role/ industry.
Does an MBA make financial sense?
A massively important consideration is the cost of funding executive education. Here are the MBA fees for the University of Cape Town (UCT) - it costs twice as much for international students.
Source: UCT GSB MBA Fees
Focus is always on the course cost of an MBA but the entire year (or two years) can end up with an overall cost of 2x tuition fees.
Since you're studying in Cape Town, lifestyle expenditure is slightly higher as it accounts for commodity prices*
The first option is to simply keep working and collect a 5% pay increase each year. In this instance you don't do an MBA. Let's say you're currently earning R500k each year.
Your salary increases steadily to R640k and you live a very vanilla existence*.
*Vanilla existence = complaining about the government, buying the occasional pair of shoes, having an affair with a co-worker. Nothing exciting.
Most people don't factor in the opportunity cost of an MBA. That's basically the salary you're giving up for the duration of the programme. It's massively important since by choosing to do an MBA essentially, you're giving up the R500k you could be making if you were working instead. Not factoring in the opportunity cost leads to people making terrible decisions.
You also have to fund the R550k for tuition + living expenses so you end up taking out a personal loan at 10% interest per year. This loan works out to roughly R140k each year for the next 5 years. You can already see this getting messy. So, the "true cost" of this MBA now balloons to over a million bucks (R1.2m to be accurate).
But wait, there's upside right? You will expect a salary increase. Let's give you a juicy 60% post-MBA salary increase. For the sake of comparison let's also you assume you won't be seeing more than a 5% increase each year (it's a tough market!). So, your first job after the MBA lands you a meaty R800k. Sorted right?
Across a 5-year horizon you end up R380k worse off, and your MBA returns a dismal negative 21% each year. You were better off trading forex signals instead of getting this piece of paper. It's becoming clearer how student debt and not ending up with a higher paying job can end up with you in a suffocating financial hole.
Now let's see what happens if you "forget" the opportunity cost of that year of work. Let's totally ignore the fact you're giving up a R500k salary.
These numbers look considerably more attractive... and also to fails to capture the financial sacrifices you have made. How do we fix this and make it work?
We're not in the business of cutting out coffee, hitchhiking to campus and rummaging through trash to survive. It's not hipster to live in a dumpster - it's just dirty. The entire tuition, lifestyle, food and rental budget will not change. We keep it at R550k.
What we do is be smarter about the interest rate we source for our student loan. More than one bank allows you to borrow close to prime. We also push hard for a higher post-MBA salary. Graduates from certain programmes out of China see a 200% increase in their salaries - you push for 75%.
With two tiny tweaks (higher post MBA salary + a lower interest rate) AND still accounting for the R500k salary you have given up; this is where you end up...
You're probably thinking, well the MBA will show benefits long after 5 years. That's 100% bang on. After 5 years the benefit accrues disproportionately especially since you're not paying off any of the student debt.
The ability to use executive education to pivot into another role/ industry is crucial. If you're racking up the MBA without leveraging it into a promotion or transitioning into another industry - that's a really expensive piece 3 letters after your name. You don't magically wake up to C-suite job offers 24 hours after scoring a MBA.
Pro-tips for doing a MBA: Take a longer term view on the benefits, push hard for attractive financing (or use cash saved up), have a strong sense of what exit salaries look like, account for the costs of living and make sure to include the opportunity costs of what you're giving up (a salary/ bonus). All of this considered you may find it makes sense to do the MBA part-time.
B) Experience - get your hands dirty
Having a ton of qualifications are great - PhD, MSc, CFA, MBA, BBW (don't ask), except it means nothing without actual, tangible experience. If education was the only determinant in scoring the perfect role there would hardly be any unemployed graduates... except there are.
Nearly every profession has a period where you spend time at the bottom of the food chain racking up experience - lawyers, pilots, accountants, doctors, investment bankers, engineers. That window is humbling in that you realize how little you know and how steep the learning curve actually is.
My first day as an investment banking analyst on a frantic paced desk in London, the VP next to me flatly said "you know nothing, you will spend the next few months Googling everything - stay hungry, soak up everything". Fast forward a few years as a VP and I found myself sharing the same advice. Reading books on management is great, actually managing a team with different personalities is completely different. You watch helplessly as the textbook economic theories and frameworks break down every single day on your multiple screens - markets are irrational and people are even more unpredictable.
In the real world you're paid for "flawless execution", "attention to detail" and being a "safe pair of hands". Mistakes cost money and relationships are priceless. It's obsessive, pedantic and you will wake up in a cold sweat thinking about whether the footnote on the slide 3 had a full-stop. You read important mails 3-4 times before hitting "Send". It's a far cry from drunkenly scribbling down a copied essay in university and racing to submit by midnight.
Securing a top tier salary in any industry means effortlessly operating at "unconscious competence ". You're a Jedi. To get this point it takes years of repetition and awareness. Have you ever looked at a set of numbers and intuitively knew something was wrong a split second before your brain even registers why it's wrong? You can't learn that level of intuition at business school.
A massive mistake many people make is to spend their entire career within a single department in a single division of a single company. Because corporates are large juggernauts that depend on many different areas to succeed - it's highly unlikely performance depends entirely on one division. Push for the chance to rotate into other teams on secondment or short term cycles. Anyone with a better sense of how the entire business functions is more likely to get paid than someone who remains in a forgotten corner of the large machine.
Rotating also helps breaks the monotony of doing the same job repeatedly, builds new relationships and gives you more experience all while still having the overarching safety net of working within the same company.
C) Relationships - collect keys to open doors
Relationships (within this context) don't refer to the countless failed talking stages over lockdown. It's not amassing business cards at "networking" events either. Business cards are nothing more than stuffing for suit pockets & suit pockets should not be stuffed. There's many archaic schools of thought when it comes to establishing relationships.
For instance, networking only with people you believe can help you grow at events is completely flawed. The traditional technique of getting everyone in a room and forcing them to manufacture conversation is tired. Furthermore, most people are forgettable. There's no chemistry. Sometimes the most powerful people are found in the unlikeliest of places. It's the "friend of a friend" approach.
You: "I'm starting a cake business, I just need to connect with a party planner"
Friend: "Lerato's sister has a new events agency. You met her at my birthday last year. I can connect you"
That's it. Done deal.
The central elements of longevity in any solid business relationship (like romantic relationships) are trust, reciprocity and communication. Would you marry someone you couldn't trust, never reciprocates your energy or can't express how they feel? Reciprocity is often overlooked. Most people are looking for contacts who can help unlock doors but few people ask themselves, "which doors can I open for other people?". Symbiotic relationships are inherently designed to last much longer.
Luck = Preparation + Opportunity
Let's say your absolute dream job is to be a lead star in Hollywood. Tomorrow Christopher Nolan pitches up and offers you a role in a Sci-fi flick (which is excessively complex). Can you act? Have you practiced? You failed grade 6 science; how can you explain time travel? Do you have the ability to memorize a script? Truth is, it's not the opportunity preventing us from our dream careers - it's that we aren't prepared. For as long as we remain unprepared, these will always amount to just dreams.
Oprah Winfrey had a part time job at a radio station. In high school she won a speech contest that secured a full scholarship to Tennessee University to study communication. At 17 she also won the Miss Black Tennessee beauty contest. At 19 she began co-anchoring the local evening news. By the time she received her biggest break on talk show TV, she was ready for a career in broadcasting. She knew how to curate a public image and established all of the core skills you need to be successful in the industry.
Charlize Theron was famously discovered by a talent agent while she was throwing a tantrum at a bank cashing her last cheque. It's a fantastic "lucky break" story. Except, by that point she had already completed a modelling contract in Milan, Italy & was a trained ballet dancer at the prestigious New York's Joffrey Ballet School. Charlize knew what it took to be in front of the camera and she knew how to perform.
The emphasis on building out healthy networks to discover people to make our dreams come true has drowned out the most important question - are we ready? If you meet the right person tomorrow, are you ready to leverage the network or will you miss out the opportunity of a lifetime because you're unprepared?
This reinforces the importance of "conscious networking" - meeting people with a purpose. The thousands of LinkedIn contacts mean nothing. Quality & depth in relationships mean considerably more than being loosely linked to a list of names. How many people can you call up who will take time out to give you decent advice? More importantly, how many people will refer your skills/ abilities and recommend you for a role when you aren't in the room?
If it's technical skills you need to develop, connect with a mentor that happens to be technically strong. Look for people to strengthen specific areas instead of just... looking for people.
Start and you will attract the right people. If you go around pitching the idea of a cake business to thousands of people, you won't get too far. Why should anyone bother giving you the time of day? Why should they finance you or invest in this business? Worse - eventually you're going to start to focus on reasons why you shouldn't do it (there's so much competition, margins are low, gaining customers is tough).
Get people to taste your cakes. Take pictures of the cakes and upload them onto social media. Ask people to review new flavors. People are more likely to support a half-baked business than a lofty idea. The world is filled with amazing ideas people & too few "make it happen" people. Execute on ideas and your circle of influential relationships will grow.
Education, experience and relationships don't just give you the edge in the corporate hierarchy but more importantly - they provide you with the artillery to walk away from the corporate grind. Hustling it out on a crowded island playing Survivor & living off scraps of rice and dry chicken is a fucking miserable existence. You're considerably better off on your own luxury island.
So, while Karen is talking trash at the water cooler about Janet (who took an extra 10 minutes on her lunch break) and happily playing futile corporate Hunger Games - focus on yourself. Stay grinding and rack up skills that make you lethal.
You're destined for great things.