The MBA Meathead: Compensation and Madness

TAGS: corporate, c-suite, max effort movements, compensation, iron game, powerlifting, dave tate

elitefts™ Sunday Edition

After many years spent at multiple Fortune 500 companies, in positions that interacted frequently with the senior leaders of those companies, I have reached two key conclusions about how the system works.

Conclusion #1: Compensation drives everything.

If you want to understand high-level decision-making in a corporate environment, look no further than the proxy statement outlining executive pay schemes. Similarly, if you want to understand why things happen down the chain of command, study the incentive compensation (IC) programs. The faithful employee doing what is right every day in the name of shareholder value is the exception, not the rule.

In all but the rarest of companies, management steers the ship with a laser sharp focus on impacts to the current year IC payout. It is eye-popping to see the repeated manipulation (sometimes legal, sometimes not) of whatever metrics define how leaders of a company get paid. Are you compensated on cash flow? No problem. As the end of the fiscal year approaches, just run inventories near zero, late pay suppliers, and ask a few large customers to pay early. Sure, you may lose some business by not having product on the shelves and late fees can add up. You can always promise to scratch the backs of your customers and suppliers later when they are in a similar form of need.

And it doesn’t end there. Every day, decisions representing billions of dollars of economic activity are made to the detriment of shareholders, lenders, employees, communities, and just about any other form of stakeholder you can imagine in order to benefit the select few in the C-suite.

Conclusion #2: The playing field is mostly level, but the individual decisions are maddening.

I do believe that career success can be had if you are smart, work hard, and develop quality relationships over time. Of course, nepotism exists. Of course, Biff from the CEOs country club will recommend a less qualified candidate and that candidate will be hired. Those vagaries will persist. But in large corporations as a whole, those types of blatant biases aren’t all that prevalent in my experience.

No, the maddening aspect is on display when people who garner zero respect from peers and are abhorred by direct reports somehow catch the eye of someone in power and achieve status. Maybe the CEO is impressed after a random PowerPoint presentation goes particularly well. Maybe (and I have seen this happen more than once) some guy firmly entrenched in middle management for two decades suddenly loses 75 pounds and shifts from being viewed as another lazy face in the crowd to being an up and comer. Or maybe it is a matter of specific need based on a ten-year-old resume line item.

None of these singular events should be extrapolated to indicate long-term performance, but they often are. The PowerPoint Pro viewed as polished has never been face-to-face with a customer. The guy who lost 75 pounds didn't get smarter with respect to business strategy. And that SAP power-user designation from ten years doesn’t really help in the completely different system currently in place. No matter. Perception has become reality.

What to do?

Coming to grips with conclusion #1 has saved me headaches and wasted time. In contrast to many coaches and athletes frequenting this site who are driven by passion, very few cubicle dwellers are driven by a love of the hum of fluorescent lights or the desire to complete TPS reports. For my part, I enjoy what I do from a relative standpoint and view my career as rewarding. I'm extremely grateful for what I have and recognize that there are many people working much harder and getting less in return. But if given complete financial freedom, I would certainly follow the sage advice of David Allen Coe and take this job and shove it.

There is also something to be said at the individual level for the influence on performance of more emotional factors like power, status, and pride. However, from a macro org-wide view, these tend to cancel each other out. Organizations tend to move based on what increases the compensation of those making decisions for that organization.

This is actually a good thing for the individual. No longer should you be surprised when decisions are made sacrificing long-term good for short-term payout. In fact, you should see them coming a mile away and be able to position yourself accordingly. Maybe it is a lateral move from a resource group on the blocks for outsourcing. Maybe it is developing a better network within a commercial unit seen as the star of the portfolio due to current profit margins. At a minimum, it should mean being able to understand why things are happening around you and save your skull from repeated desktop head butts as you fail to make sense of illogical decisions.

Conclusion #2 should give hope that good things can still happen to those who are patient, work hard, and position themselves correctly. Approach any interaction with senior leadership with laser-like focus. Treat even the most mundane of PowerPoint slide shows as you would an interview. Don't fail at promoting even the most distant experiences as relevant to the current environment. Everyone around the table has a finite level of knowledge about a finite amount of things. What you consider trivial may actually position you as the most qualified internal resource for a project or position. Sure, you may have to paddle like hell once you're invited in the boat but at least you're there.

Training

Our training program is four months into what I would call off-season work. The next meet is still five months out, so we have mainly been doing hypertrophy type activities in order to build a better infrastructure before embarking on the meet cycle in another couple of months.

The reconstruction time has been great. Injuries that persisted while going from one meet cycle to the next in previous years are now gone. My central nervous system hasn't been fried in months, so my body feels fresh and ready to go week in and week out. This doesn't mean that sessions have been a cakewalk. The weights have been waving up and down and movements have been added as we have progressed. The current mini-block is brutal, as can be seen in my feedback to Dave in the following email excerpt:

“Nice work coming up with last weekend’s training. After twelve sets of pulls on Saturday, my low back was ready to explode out of my skin. On Sunday, after benching, dumbbell presses, and push-downs, I was feeling beat but with a nice pump. After the barbell press to failure, I was light-headed. After those torture delt swings, I couldn’t move my arms.

At one point, my wife came to the garage to get her car for a trip to the store. She asked if I was OK. It was then that I questioned why I didn’t pick a different hobby for my life’s passion. Then later in the day, she was trying to pop a zit on my triceps and couldn’t because the cannons were jacked and the skin was so tight that she couldn’t get a good squeeze on it. That’s when I realized that all the work is worth it. Skin so tight you can’t even pop a zit.”

I was then promptly reminded that a real powerlifter hasn't reached full potential until there is a combination of jackedness and high blood pressure so strong that the zits pop themselves during max effort movements. Someday I will get there.

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