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Hiring is Not a Competition

Mar 16, 2015

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In 1995, economists Robert Frank and Philip Cook wrote a book entitled The Winner-Take-All Society. They connected globalization to the amplification of small differences and thus an increase in economic inequality. Globalization means not only that market participants face competition on a global scale, but also that the disappearance of regional markets leads to fewer winners overall.

Winner-take-all markets create two kinds of market inefficiency. The first is that they attract too many participants — especially since participants often overestimate their odds of winning. The second is that they create a positional arms race: participants invest in the hope of improving their relative position, but their competing investments cancel each other out.

The Talent Marketplace

On one side of the talent marketplace, hiring managers pursue “top talent”. Especially in Silicon Valley, it’s hard to get through a week without reading a blog post about the "war for talent", "rock stars", “A players”, etc. Naturally, companies attempt to attract and retain "rock stars" by competing on compensation and perks, as well as by enlisting armies of recruiters. They also use hiring processes that have a high rate of false negatives, since their biggest fear is accidentally hiring a "B player".

On the other side, potential employees find themselves in a positional arms race of credentials. Jobs that once required high school degrees now require a college degree — or even an advanced degree. And not just any degree — employers place far more value on degrees from a small set of selective schools. And the credentialing arms race doesn't stop with graduation —since job experience serves as competitive differentiation, many people pursue a competitive job opportunity today in order to obtain a more competitive one tomorrow. The rat race is endless.

As with other winner-take-all markets, the result is an inefficient over-concentration of resources. Our obsession with “top talent” guarantees that both companies and employees waste significant resources in positional arms races.

Is There a Better Way?

Frank and Cook propose the idea of "positional arms control agreements" to reduce the waste of positional arms races. For example, sports associations ban performance-enhancing drugs in order to avoid a particularly dangerous positional arms race.

But even if it were possible to get companies to agree to some kind of positional arms control agreement, such an agreement would probably violate antitrust law. And such agreements are even less imaginable on the employee side, at least in a technology industry that is historically averse to organized labor.

If collective action is impossible, then is it possible for individual market participants to act unilaterally? Yes, but it means resisting the prevailing culture that frames hiring as a competition.

Play a Different Game

If you're a hiring manager, then your goal should not be to hire the best employees. Hiring should not be a competition. Rather, your goal should be to find people who are the right fit for your needs. Evaluate your candidates' ability to perform, but do so in absolute rather than relative terms.

If you're contemplating your own career trajectory, then don't frame your own goals in competitive terms. I'm not suggesting that you should be unambitious. But frame your ambition in absolute rather than relative terms. Don't define success as winning a race.

Zero-Sum Games are for Losers

By definition, zero-sum games are poor investments for most of the participants. If you're privileged enough to be reading this post, then you're not competing with your fellow human beings to meet your basic needs. But it’s likely that you engage in competition on a regular basis to maintain or increase your status. Or that you do so as an employer through your hiring practices.

Stop wasting your precious time and effort on positional arms races. Forget all the war and rock-star metaphors, and focus on creating value. It’s a lot easier to win once you stop playing a game that’s designed for losers.

Hiring is not a competition.

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Daniel Tunkelang
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The One Sign You Will Be Wealthy

Mar 16, 2015

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I have written in the past about how working harder than anyone else will make you rich. And over 1 million people read that post. In it, I was careful to define "rich" as achieving what you dreamed you wanted. That means I defined rich as an abundance of anything that is most important to you.

I do believe that being rich is about sustaining happiness and following your own journey. It is about becoming your best self and doing more of what you love. I tell our team at Aha! (visual product roadmap software) this every day.

This post is a bit different though. It is about what it takes to be financially wealthy. Financial independence comes when you generate enough wealth to live comfortably without having to work again.

A lot of people think about being financially independent. 52% of people say having the financial freedom to do volunteer work or donate to charity is a very important priority. And more than 65% of Americans say they wish they had more time to do what they love.

The thing is, money is a tool. And the wealthier you are, the more you can afford to invest in yourself and others.

We all have different goals, but I think you will agree that most people want to gain material wealth. But few who do think deeply about how they will make it happen. So, do you know the one sign that you will be financially wealthy?

The one sign that you will be wealthy is that you "own it."

"Owning it" means possessing a unique asset that is in demand and will significantly increase in value over time. Here are a few examples:

Business
Do you dream of being your own boss? Starting your own company is not for the faint of heart. If you are successful, your business will not only build a solid foundation of wealth, but could someday generate a substantial amount of money as it grows or is acquired. If you are not in a position to start your own business there are other options. There are plenty of companies that offer stock or equity to employees as a part of an incentive program. Owning a small part of a company is better than owning nothing at all.

Property
Owning real estate has historically paid off. As a property owner you have the freedom to rent, renovate, or sell your property on your own terms. Depending on your strategy, you can generate income and yield over the short term, increase value long term, and gain tax advantages by deducting the cost of ownership.

Skill
My mom often complains that NBA players are overpaid, but I disagree. They have a unique skill that people pay lots of money to watch. That skill increases the value of their team and keeps countless others in business as well, from stadium managers to ticket venders. The same can be said for cardiac surgeons who are highly trained, scarce, and in the business of saving people's lives. If you possess a difficult to obtain skill, think of it as your key currency.

Now, some people are born with trust funds and other easy paths. In their case, the one asset they own is money. And owning money is an obvious path to making more of it.

For most of us though, we must study and work hard to gain financial wealth. It does not come easy or overnight. And if we do make it, we were likely blessed by good fortune and others helping us along the way.

I believe that "owning it" is the surefire sign that you will gain financial wealth. You must have possession of something special that will increase in value over time to become rich.

Do you agree that you must "own it" to gain financial wealth?

Also, if you would like to read my future posts then please click 'Follow' at the top of this article and feel free to connect via Twitter

__________________________________________________________________
ABOUT BRIAN AND AHA!

Brian seeks business and wilderness adventure. He has been the founder or early employee of six cloud-based software companies and is the CEO of Aha! -- the world's #1 product roadmap software. His last two companies were acquired by Aruba Networks [ARUN] and Citrix [CTXS].

Signup for a free trial of Aha! and see why 10,000+ users on the world's leading product and engineering teams trust Aha! to build brilliant product strategy and visual roadmaps.

We are rapidly growing and hiring. Rails Developers. Customer Success. Marketing Campaign Manager. Product Manager. Join a winning team -- work from anywhere in the US and be happy.

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