Reading this reminds me of "The Elves Leave Middle Earth – Sodas Are No Longer Free," by Steve Blank.[1] Here's the key passage:
"...the new CFO got up to give her presentation – all kind of expected; Sarbanes Oxley compliance, a new accounting system, beef up IT and security, Section 409A (valuation) compliance, etc. Then she dropped the other shoe. “Do you know how much our company is spending on free sodas and snacks?” And to answer her own question she presented the spreadsheet totaling it all up. There were some experienced VC’s in the room and I was waiting for them to “educate” her about startup culture. But my jaw dropped when the board agreed that the “free stuff” had to go. “We’re too big for that now” was the shared opinion. But we’ll sell them soda “cheap.” ...
One day the engineering team was clustered in the snack room looking at the soda machine. The sign said, “Soda now 50 cents.” The uproar began. Engineers started complaining about the price of the soda. Someone noticed that instead of the informal reimbursement system for dinners when they were working late, there was now a formal expense report system. Some had already been irritated when “professional” managers had been hired over their teams with reportedly more stock than the early engineers had. Lots of email was exchanged about “how things were changing for the worse.” A few engineers went to the see the CEO.
But the damage had been done. The most talented and senior engineers looked up from their desks and noticed the company was no longer the one they loved. It had changed. And not in a way they were happy with. The best engineers quietly put the word out that they were available, and in less than month the best and the brightest began to drift away."
I remember getting into a long discussion with an engineering director at Google about "the entitled attitude" that engineers had. Their argument was that money spent on "lifestyle perqs" was money not spent on better computers or improved networking, or heaven forbid higher salaries where the engineers could spend the money on something for themselves.
They weren't wrong. But at the same time, they really weren't looking at it from the employee's perspective. Being a bit cheeky I mentioned that Google could save lots of money if they stopped heating and cooling the buildings. With the obvious counter argument that if the place was uncomfortable "everyone" would leave. But that is just as wrong. Not everyone would leave, only the people for whom working for Google wasn't as important as being comfortable at work. There were plenty of people who would sit there sweltering just to be "working at Google." And many of those people would do great work and build great things.
But the really good people, the people who constantly invent new things and have the skills to communicate their ideas and get them implemented, those people can work literally anywhere and if they can do what they want to do anywhere else, they will leave. So this "tax" of free soda and snacks is just a cost of doing business. And if you look at the revenue per employee, you do yourself no favor trying to maximize that number beyond the value that meets your net income numbers.
The other thing that a number of middle managers miss is that once you are paying a person more than their "wants" level, you get more loyalty and commitment spending additional dollars on snacks and sodas etc than you do on cash.
It's not just comfort, it's signalling. A company with a laid back culture, open kitchens, free food, a nice expensive architect-designed office is signalling that it is prosperous ("we don't cut costs here, we don't need to"). A company getting less prosperous is also about to get less promotions, less bonuses, and maybe some layoffs.
If you are 10 years old and you see your dad replacing his BMW by a beaten up Toyota, yes, he could just have decided to stop taking on so much credit, but chances are you'll think he's not doing well, even if he reassures you it's for perfectly valid reasons. So you mentally brace for giving up on that new bike you wanted for Christmas.
"They've cut the kitchens."
"Really? We just got an extra Jura coffee machine in every conference room..."
"Interesting, sounds like your cash flow is good at the moment. Are you guys looking?"
And the earlier you leave, the less affected you are - you benefit from the still strong brand, you get decent garden leave, you have little competition on the job openings and your former colleagues will be nice to you in case they need a hand out of the sinking ship later.
Absolutely true in my experience. What employees want, even more than additional money, is a lower mental load dealing with the everyday necessities of life, which an employer is perfectly placed to provide, since employees spend 40+ hours a week in the office.
A more cynical benefit of sodas/snacks/exercise classes/laundry/dogwalking/social events provided by the company is that it makes leaving a lot less appealing. A competitor can easily offer a higher salary, but when departing means completely restructuring an employee's daily routine, it can be a powerful force keeping people in place.
> those people can work literally anywhere and if they can do what they want to do anywhere else, they will leave.
I often wonder if the management team knows this. The people who are really good are also often:
1) more expensive
2) less likely to tolerate bullshit
3) will not be as submissive and willing to follow orders from the new managers
Since more bullshit is coming down the pipeline and orders from new managers will have to be followed closely, they do something like this, know exactly what effect it will have.
It is a variation of "we are not laying you off, just moving you to the basement". No company wants to be known for laying of the creator of language X, or famous technology Y. But if it seems they move on from their free accord then the company saves face.
However, I think I would prefer a higher paycheck every pay period instead of free lunch or soda and so on. What I don't have faith in is that the money saved from free stuff there will directly go to my paycheck.
For example, one way to fix the problem, at least for current empployees is to immediately give raises according to how much it was perceived it was costing the company in free soda or lunches, but that just doesn't happen I guess.
The amazing thing I've noticed is that employees of many startups have no problem paying a "startup tax" wherein they pay n times the current going rate for x service so long as the service is provided by their company, and the cost is deducted from their pay (+ some inevitably worthless stock options).
In other words, pay some employees below market rate, add in worthless stock options, and so long as you keep the "free" soda and dry cleaning cleaning coming (at a 2-4x cost over what they'd pay for themselves) coming, they're fine. Even if the fee they're paying is far more expensive than just going out to get those services themselves.
Once that ends, growth hacking ends and everybody gets burned.
But the really good people, the people who constantly invent new things and have the skills to communicate their ideas and get them implemented, those people can work literally anywhere and if they can do what they want to do anywhere else, they will leave. So this "tax" of free soda and snacks is just a cost of doing business. And if you look at the revenue per employee, you do yourself no favor trying to maximize that number beyond the value that meets your net income numbers.
Do you have any proof for this paragraph? :-)
I mean, demonstrate that there are 'really good people who constantly invent new things' that are in some way better than other people.
I accept that it's convention (or touch stone) amongst SV participants and developers on HN. And we all like to believe we're especially talented. But, then if this is true it must also be true for CEO's right, there are some that are 10x more talented and therefore they should get Y more salary etc.
I agree with your underlying point "it's a cost of doing business", but not with your reasoning - to me the reasoning is that it's the social signaling for the industry: if everyone else gave away free shoes then company X hiring people has to do the same or be so 'different' in some way that it can go against the grain. As you say everyone totes up the benefits/draw-backs of their work place, team and tasks to decide if a role is good for them - I think that's quite a messy process and more than simply to do with whether there's free soda!
>And if you look at the revenue per employee, you do yourself no favor trying to maximize that number beyond the value that meets your net income numbers.
The challenge here is that's exactly how FD's are incentivised (in the UK at least). It's often a case that their bonus will be defined as a percentage associated with cost saving or margin: it's effective as it gets one department in the business focused on whether costs are delivering real value, the downside is the one this article is talking about "knowing the cost of everything and the value of nothing".
I have been thinking about the proof question. I've been around enough, and in enough companies, to feel the truth of it is self-evident but the engineer in me is always looking for ways to develop objective measurements.
So evaluating folks is one of the things we end up doing as managers (often annually) and I look for people who have contributed to projects and those who have both contributed and started new projects. People who suggest new projects are often (but not always) less fearful about "rocking the boat" in the sense that every new project suggestion is potentially a judgement against an existing project. It is primarily their mental attitude that lets them operate freely, and in doing so I have experienced people who contribute more by inventing new things can communicating that to their peers. My hypothesis is that this lack of fear is the same thing that moves them to leave when the environment becomes less hospitable, they don't internalize that perhaps leaving may not include arriving anywhere else. For folks who are afraid they won't be able to find work again, they are unwilling to leave simply because the working conditions have gotten less comfortable.
I feel I understand the mechanics that underlies the basic assumption but I don't have a good way to prove it.
The macro question of how to (a) consistently support a high performance creative environment, and (b) objectively measure the performance of knowledge workers [0] must be the most significant challenge for leaders at all levels!
On performance measurement I agree - over time all managers build a nose for it with some heuristics - if it quacks like a duck, walks like a duck etc etc.
I suspect that with high performers "class is permanent, form is temporary" and this is why the challenge is how to create (hard) and then maintain (harder?) a creative culture. Personally, I increasingly put more focus on the way the individual interacts with the environment (and how the environment is configured for them) for enabling high performance.
What I get from your comment is that you're looking for people who are willing to be creative and challenge existing solutions which I agree are two hallmarks of challenger environments. I feel this is correct, but also have no proof.
I find the 'free X' stuff trivial (and possibly a signal of entitlement) but the underlying point is that touching anything that could negatively impact the creative culture should be done carefully and after a lot of thought. People always react with more anger to a minor thing being removed, than a major thing being added.
Ultimately, if 'free stuff' is a signal of an environment that values developers contributions less then there can be no surprise if developers leave when the environment becomes less focused on enabling them. I think the point you're getting at is that if the environment is less inclusive of inventing new things/trying new things then a person whose driven to try new things will inevitably move on to the next challenge. Again, I do sort of agree but have no proof - I probably feel that people tend to be more sticky due to human loyalty etc.
Moving on a bit from what you actually said ... I was picking at something I thought you implied which was the existence of the "10x performer" and them being able to pick and choose. This is something, I'm really cautious about. I feel like the narrative of the 10x risks becoming a really negative one where we're saying "there are rock stars that are 10x better who can pick and choose and float to whatever the best environment is". Even if this is true due to PR, I don't think this is objective reality. I see good people, and even great people, but team performance is far more valuable to me than individual performance and it's factors are complex. Even for personal performance individuals do wax and wane depending on the project/culture/situation and the idea of an order of magnitude of better performance(!) - I've yet to see it on a consistent basis ... except for me of course!
[0] This forum is highly focused on developers, but I see the same pattern across multiple groups, from UX/Design out to Finance/HR. We depend on individual and team contribution, but at best find some 'objective' measures for individual contribution and wholly flawed subjective ratings (ie likeability ratings) for team contribution.
A coworker told me about his experience at HP long ago. A new VP come aboard and thought they could save money by cutting out all the free coffee. Many employees were pissed and made a point by taking their 20 minute break outdoors to pick up coffee daily. Management suddenly realized that saving 25 cents for coffee was not worth >20 minutes of lost productivity.
At Morgan Stanley from 1996 through 2010 and an executive during the banking crisis.
I feel like that's gotta be simplistic and/or wrong because that's nothing but red flags for me. Could someone correct me? Why should this not be concerning? Those were some of the most predatory and poorly run companies in America at the time.
The Big Short gets into why it's misplaced to blame the big banks for the crisis, and calling them "predatory and poorly run" goes several unjustified steps beyond that.
I don't know why this was an unpopular comment. I believe they meant to say "to solely blame". I think Michael Lewis did a very good job at showing the crisis was caused by what I dub the 5 pillars:
1) Greedy bankers who were trying to maximize their bonuses by selling high risk instruments.
2) Predatory home loans that allowed for the financial instruments to exist and all the people associated (the lenders, the salespeople, etc.)
3) A completely backwards system for how the ratings agencies work and how their greed outweighed their duty to correctly rate instruments.
4) Greedy home owners who wanted to "keep up with the Jones" by having bigger and bigger homes and didn't understand their risk exposure.
5) While this is not explicitly mentioned by Lewis in his book, I think he makes it quite clear that simple regulation could've cut one of the previous four pillars from propping up the crisis.
Regardless, I thought Lewis' book was more of a treatise on how incredible human greed in all facets of the economy caused the collapse. Not just the investment banks, although they are certainly partly to blame.
Mortgage lenders, like Countrywide, who were selling predatory crap to banks that weren't questioning Countrywide enough, and had an unyielding faith in house prices always increasing. More doofus behavior than knowing malfeasance, at least, that's what I got out of the book? Clearly that's a minority viewpoint, perhaps I should re-read it...:X
I think the the more common impression from the book was that mortgage lenders were incentived not to ask questions, and banks were more than happy to take their offerings, repackage them, and resell them to dumb money.
Many at the banks seemed to know what was happening: remember how the price wasn't dropping as fast as they expected? That was Goldman covering their position and refusing to make the market at a reasonable price until they were safe.
I'm always very suspicious when a company saves easy to count money but pays with hard to count costs. For instance Google just got a little less cool. Everyone and their mother wants to work at Google, and the people who work there love it, and believe in Google's mission. But as it turns into a more standard profit-oriented company they will lose a lot of their kool-aid, and the Google kool-aid is an asset they have worth many billions.
Unfortunately that asset isn't written down anywhere, and the books won't mark down the capital loss from this depreciation. If they did, a lot of these cost cutting measures probably wouldn't look so great.
I think something like that might be accounted for as Business Goodwill on a valuation (http://www.valuadder.com/glossary/business-goodwill.html). It would definitely be interesting to know if it is actually included in some internal or public accounting valuation and if the accountants actually adjust the values in some way as it surely has some impact.
I think business goodwill is usually measured on the consumer side. And it's usually something like brand recognition like Coca-Cola. I've never seen it used to measure employee good-feelings/koolaid etc..
Judging by my experiences with IBM, within 5 years, Google will be "focusing on its core competencies" of advertising and will be cutting everything else loose.
Besides the "cult of shareholder value", there is also an opposite fallacy where the more difficult to measure a division's payoff, the more leeway they have in blowing through cash. Many of the "moonshots" seem like the kind of thing that sure, might have some kind of long-term payoff, but not necessarily one captured by Google, or that justifies arbitrary levels of investment. A company can survive such a tax even if it's negative payoff, especially if other divisions are crapping gold bricks, but at some point you have to figure out what your long-term expectation is and calibrate expenditures to that level.
Absolutely. Thanks for saying what nobody likes to hear. Markets consistently undervalue research in the utilitarian sense, but I'm pretty sure they don't undervalue it in the economic sense. To be clear, I think this is a shortcoming in the economic notion of value, not in research.
> sure, might have some kind of long-term payoff, but not necessarily one captured by Google
That's the crux of it. It's not about unwillingness of companies to "think big" and "take risks", it's not about a shrinking horizon of shareholder ROI expectations, it's about the difficulty of capturing the value that gets created. Economic value that can't be captured isn't economic value. Maybe (probably, in this case) it's utilitarian value, but it's not economic value.
The notion of intellectual property was a valiant attempt to turn things around, but it introduces so much friction and so many routes of exploitation that it really hasn't changed the fact that on some level markets are fundamentally incompatible with basic research -- which is why fighting to fund it through the government is so important.
I think this is a key problem for google. I am not sure there are many who believe that the Google R&D/moonshots are actually going to turn into businesses or executed products for Google sold by Google. Their "heart" never seems to be in any of the other areas that they entertain, even at huge amounts of funding (like GCE) they seem to still be hobbies. In contrast, I doubt there is any shareholder that would not believe that if Apple's r&d stumbles on something they wouldn't be able to execute on product and turn it into a $xx billion segment.
[using a throwaway here to avoid offending anyone]
I actually think there's a LOT of fat that could be cut at Google without affecting innovation. One person I know - I've literally never seen him wearing a shirt that he didn't get for free at Google. I've seen people get new Mac power adapters because the tech stop was closer than their desk.
These things are pretty small compared to salaries - and they do serve a purpose - having to buy your own t-shirts and pay for your own gym membership is a pretty good reason never to quit, but I wonder how much they foster a culture of just throwing money at problems instead of innovating? I wonder how much they make Googlers soft and entitled.
My point is less about the t-shirts specifically (as I said, it's a minimal cost) and more about the company culture as a whole. If you can make a silly request for an office fire pole and the company will give you a fire pole, does that foster an attitude where you'll just throw more servers at a problem instead of thinking hard about your systems, or an attitude where a cool project will stay in development for a long time, even when the business case for it stops making sense.
Sometimes throwing money at a problem is the right solution. I've been at companies where we've spent 16 man hours trying to figure out how to clear up space on a server(about 40 GB). Have there been a more open purchasing system we just would have gone out and bought a hard drive and saved the company $8500.
I remember working at a place that made employees buy their own pens, maybe as symbol of frugality. Nobody really got it - we just thought it was eccentric.
Some workspace amenities are basically just props - they don't cost anything once installed. People try it out a few times and go back to work. Day to day, it's about as significant as the junk on the walls at a theme restaurant, but it makes the space look "creative", and apparently that's more important than looking "frugal". Arcade games get used that way too - sure, you can play it, but who has time?
Meanwhile, important, recurring costs like improving data center efficiency do get a lot more attention.
That fire pole costs a lot less than the salary increase you'd need in order to achieve the same level of employee retention. Google has quite a bit of engineering talent; you don't want that talent to evaporate for the sake of some short-term cost savings. Your scheme will absolutely affect innovation: it will cause innovators to leave.
If you want to cut datacenter costs, reward engineers for impact, and include cost savings under your definition of impact. Engineers are pretty rational people and will respond to incentives.
as a thought experiment, Amazon is basically the opposite of the google culture in this perspective (door desks, soda/food is not subsidized, equipment is just barely enough, etc). now, this leads to lots of complaints from a subset of engineers who do then go to google (or like) pretty quickly. but Amazon does seem to be able to innovate (aws, kindle/fire, alexa) and survive in very low margin businesses. google seems to have struggled to move beyond search in any meaningful way.
I understand the point you're trying to make about the stress on frugality at Amazon and I agree with you, but your specific points are more accurate for past Amazon. These days Amazon has become significantly more accommodating.
The door desks are more of a tradition. You can request more expensive automatic standing desks easily. The soda/food is not subsidized day-to-day, but we do get coffee and tea (and if you stay late due to work you can get reimbursed for dinner depending on your team). The hardware is perfectly fine as well. I have 2x 1440p monitors and an i7 13" Retina MacBook Pro as well as a cloud desktop (courtesy of AWS) with scaling hardware as I need it for development.
I am also at Amazon currently. You are right, its not as frugal as in the past but it is still significantly more frugal than an environment like Google or similar startups/unicorns that go for that. I have interviewed people who are horrified to see soda machines with prices. Requesting a nicer desk (which requires some ergo hoops), no daily soda/food, and decent but not fully maxed out hardware is still pretty frugal comparatively for engineers, even if they have loosened things up in the last 3-4 years from before. While Amazon now provides you hardware that is actual functional for the job, places like Google are giving you free yoga and dry cleaning.
Googler here. The free shirts are usually not for employees. They're usually old promotional stuff that are left overs from events held for businesses.
Also, some Googlers are insanely good at finding out when they're about to get rid old swag.. I'm not one of them, unfortunately.
I do admit, the quantity of Mac power adapters laying around the office is a bit silly.
I am more and more convinced that software developers need people who used to run tv shows (show runners) rather than people who worked for banks as managers.
Also, what demented message does it send to your team that you trust them so little that you need to delay surgery rather than let them handle something? I regard this as a failure to lead or paranoia of others getting noticed.
I think someone who is used to putting together a product using creative people would do better as a manager for a software project than a person who see all the developers as numbers or cogs.
Ah, a "deletionist". A person who uses its own intelligence to justify what other people can't do, rather than trying to be (IMHO) actually helpful and using intelligence to figure out how to do stuff.
Every human institution seems to get overrun by those, eventually.
I'm never quite comfortable with portraits that just sing endless praise and are devoid of any kind of critical reflection, though (apart from the subtle hint that her work takes precendence over her son).
BTW, I tried to look up Alphabets and Googles revenue/earnings by segment, but the information out there is relatively sparse. Anybody have a good link? (Apart from [1]).
It was inevitable. These monopolies / near-monopolies seem to follow a pattern:
-IBM was at its peak in the '80s before losing its direction and beginning layoffs and a long slow collapse, reducing it to its current state as a shadow of its former self.
-Microsoft was at its peak in the '90s before losing its direction and is now starting its collapse with major layoffs a couple of years ago.
-Google was at its peak in the '00s and is starting to lose its direction.
I think people are conflating "a company at its peak" with "shiny new company that is the center of media hype", which are completely different things.
I don't know what the original poster meant, but I may (I'm not sure I would) argue that he may mean things other than simple income/profit. Such things as core competencies/competitiveness/managerial and employee talent and motivation/corporate "cohesiveness"/ability to create successful products/other, maybe more difficult to measure criteria and so forth.
I wouldn't say all (or even most) of the above applies to Google, but I do believe that for large corporate systems in general, these sorts of things become a major issue when you have half a million employees and hundreds of subsidiaries/divisions.
Income should keep rising after the company "peaks". By the time income actually stops rising, executives will have started pooping masonry, and the collapse will have to be acknowledged by everyone since it will be officially visible to everyone.
Geoffrey West, of the Santa Fe Institute, has plotted company lifespans based on growth trajectories. Short-and-sweet: the faster and shorter the rise, the faster the fall. Longer and slower trajectories tend to be more stable.
You're very obviously wrong on Amazon. They have at least 10 to 15 more years of significant growth before peaking. They're still growing near 20%. Their retail business is still eating the competition (total US retail sales are hardly growing). AWS is still growing rapidly and spitting off perpetually greater sums of operating income (that business is nowhere near peak and won't be for a long time). It's very likely Amazon's sales will reach several hundred billion dollars per year over time, just in retail alone. Amazon has a very decent shot of becoming at least 2/3 the size of Walmart in terms of sales.
Demand for ads, hardware, software and internet services have been increasing over time as more people are introduced to computers and the intrawebs. If all these companies have peaked, who is capturing the ever increasing demand?
Last I checked the average corporate lifespan in the US is 25 years, so these numbers don't seem abnormal to me. Indeed it is amazing that IBM is even still around.
I find it more peculiar that people think companies "must" (or even should) have long-term survival as a goal.
I've wanted to sit down for a while now and chart out company lifespans over the past 100 years. I could very well be wrong, but I have a feeling that just as technology/product life cycles are getting shorter, so too are the life cycles of companies.
note: There are of course many aspects that would make this a bit of a difficult thing to study, mergers and acquisitions being just one for instance, and at least for small businesses, "birth" and especially "death" dates are incredibly hard to pin down. But still something I've been interested in for a while.
By the way, the hardest part IMO would not be accounting for mergers/acquisitions etc., but accounting for the survivorship bias of just forgetting about the companies that were once big but which we don't even remember anymore.
This reminds me of some of the cost cutting at Microsoft in the late 00's.
One of the classic anger points was the free towel service. There were showers in some of the buildings, and towels were provided for free for employees to use (and leave there in a bin).
Management said they could save a huge amount of money by getting rid of the benefit, and that most people don't use it. The amount of time spent on backlash emails was probably more than that.
But it does seem inevitable that companies will go down this way as they age.
I totally enjoyed that article. I am a Google fan, worked there as a contractor for a while and really enjoyed the way the company was run, infrastructure, and work.
But, but, but... Google does have long term problems having a one-pony business. They really do have to win big on at least one 'Other Bets.' I am not a Finance person, but I think I understand how Facebook earns a lot of money long term, but in contrast Google's ad business does not look as good in the future of 'mostly mobile devices.'
There was the 'great man theory' in history - does the personality of a ruler matter that much, is it the decisive factor? Historians don't think so, however in business we still have the cult of the super hero executive. i wonder if this notion will pass some day, as it did with the study of history. (On the other hand it is a small wonder to get anything done in an increasingly bureaucratic organization...)
For example there is the curious case of Germany, where executive salaries are 50% down from the US level [1] - however Germany has a larger share of small and medium sized enterprises (mostly family run - so they can't just rob themselves like that), and they also have kept some remnants of the old social democratic values; also it is quite hard to compare different societies.
The value of the company jumped sixty-billion dollars after her first earnings report. So, roughly, in her first quarter at the company, she paid her entire compensation package back to the shareholders almost 900x over.
Anyone with any stock in Google at that point would have been thrilled even if she never accomplished anything else.
You have fallen victim to the outcome bias. It is a mistake to attribute the quality of a decision to a specific outcome when the correlation between their determinants is low or unknown. In layman's terms, you don't know that it was her joining Google that led to this particular rise in Google's market cap. It could have been any other number of factors. Even simpler, what you said can be analogized to "I won the lottery while wearing this particular shirt, so it must be my lucky shirt".
Furthermore, statistics show that there is a positive correlation between companies rewarding executives in a bull market, and punishing executives holding the exact same positions in a declining market, thereby making luck and timing, not skill, a main determinant of who eventually makes money (the correlation between how well a company performs and the perceived skill of its executives was determined to be around 10-20%).
One of the big questions when Pichette announced he was retiring was whether or not Google would be able to find someone who had his level of skill. This was factored into the stock price, which remained flatish or slightly down from March of 2015 until Porat's first earnings report.
The market hates uncertainty, and priced that in. Google is famous for being undisciplined and Porat's hiring dramatically reduced the uncertainty around Google's discipline.
I don't pretend that it was all Porat that caused the jump (and you are misreading--rather ungenerously--me by saying that I'm treating this like a lucky shirt). But Google had no other step-wise jump like that in its history, and no other tech company had a similar rise in roughly the same couple of weeks.
The market was waiting to see what Google would do without Pichette. Porat answered the question.
Compare GOOG to FB and APPL, and look at the five-year charts.
That's pretty ridiculous. The company's leverage is not any individual's leverage for compensation purposes. We don't all expect to get paid for the net present value of our contributions to the company.
The point isn't that no one else could have. The point is that no one else did.
And I don't attribute it solely to her. Certainly the company's performance was the major factor. But the market was largely reacting to the change in certainty around Google's financial discipline.
> Instead of going under the knife, she went to her office, arm in a sling. Porat refused painkillers,
saying they would impair her > judgment, and put in two long workdays before the Tuesday morning call.
> “Ruth is the only person who can deliver bad news to me, and I’ll still like her,” says Jeff Immelt, CEO > of GE
These people are insane. Keep personalities like this far away from your life.
> These people are insane. Keep personalities like this far away from your life.
Tempting as it is to post unsubstantive denunciations to the internet, this is the kind of thing we're hoping to avoid here (and especially personal attacks). If you have a concern you can express in a way that adds information, by all means do. But please don't just post empty anger, even though it's perennially popular.
I think by reading the quotations I have selectively excerpted from the original article, a thoughtful reader can infer the substance of my concern. There is no need to spell everything out as if we're all unsophisticated dullards.
Did you not read the part where she worked for Morgan Stanley? Stuff like this is passed around in Wall Street companies as a positive legend rather than life-endangering foolhardiness and poor judgement (which it is).
If you work at a company and they start hiring large numbers of ex-Wall-Street execs, run.
No, not really. An earnings call for an enterprise that large is worth many human lives (at the standard rate of about $2 million, which is itself derived from both people's own insurance choices as well as court-case awards); part of what someone at that level is paid to do is to put her company (and the well-being of the millions of people with a stake in it) above herself, and Mrs. Porat did that.
$2 million (or whatever number) may be the standard rate used to compensate others for a lost life, but does anyone willingly sell their life for $2 million?
I think there is a difference between how we try to compensate for the loss of something irreplaceable (a life) or disincentive negligence, and the price of something bought and sold.
Life insurance fraud of killing yourself and making it look like it wasn't a suicide in order for your beneficiaries to get the payout. You would very much be dead.
Okay, let me assume that this is even a thing (I don't know, but you seem to). There are still two fallacies in trying to equate the lost life against the payout:
1. The person committing the suicide and thus the fraud would not be weighing his life against the money, he would be considering the well-being of his beneficiaries instead, and deciding that their well-being is worth more than his life.
2. He cannot reasonably control the payout of the life insurance. Anything beyond a certain mark (maybe 2 million $) would raise a lot of eyebrows in the insurance company.
> An earnings call for an enterprise that large is worth many human lives
I wish I could read this without thinking of human sacrifice on a scale unseen since pre-Columbian meso-America.
Even by your logic this is insane. She's paid more than 2,000,000 a year, and therefore should not be sacrificing herself from a pure economics standpoint.
The minimum prison sentence for manslaughter in the first degree in New York is 10 years, not a $2 million dollar fine. [My point being that there are some problems with equating lives to money.]
i'm with you, it takes someone to be at least a little bit crazy to do a job like this under those circumstances.
i always wonder how lonely these people are in their day to day lives, but maybe they derive satisfaction from their hectic work lives instead of human relationships.
i know i've been there before from my own hectic work schedules, caught up in the love affair of a high pressure work environment.
Theirs a scene in Mr Robot where a junior executive at E-Corp bragged about getting a blow job from an executive recruiter on a tennis court on one of the Google campuses.
That scene resonated pretty deeply with me. All large corporations have much more in common then they do apart, including for the most part the same needs, desires, objectives, tactics, etc. They all pull from the same pool of Harvard, Stanford, Yale, whose pedigree of professors-to-influential-people would be incredibly fascinating in its own right.
That said I've longed learned it's pointless to try to predict the doom of companies. Just try not to get burned by the inevitable fall out in whatever form it may take...
"...the new CFO got up to give her presentation – all kind of expected; Sarbanes Oxley compliance, a new accounting system, beef up IT and security, Section 409A (valuation) compliance, etc. Then she dropped the other shoe. “Do you know how much our company is spending on free sodas and snacks?” And to answer her own question she presented the spreadsheet totaling it all up. There were some experienced VC’s in the room and I was waiting for them to “educate” her about startup culture. But my jaw dropped when the board agreed that the “free stuff” had to go. “We’re too big for that now” was the shared opinion. But we’ll sell them soda “cheap.” ...
One day the engineering team was clustered in the snack room looking at the soda machine. The sign said, “Soda now 50 cents.” The uproar began. Engineers started complaining about the price of the soda. Someone noticed that instead of the informal reimbursement system for dinners when they were working late, there was now a formal expense report system. Some had already been irritated when “professional” managers had been hired over their teams with reportedly more stock than the early engineers had. Lots of email was exchanged about “how things were changing for the worse.” A few engineers went to the see the CEO. But the damage had been done. The most talented and senior engineers looked up from their desks and noticed the company was no longer the one they loved. It had changed. And not in a way they were happy with. The best engineers quietly put the word out that they were available, and in less than month the best and the brightest began to drift away."
[1] https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...