Wednesday, June 28, 2017

- Choosing A Career

The other day I wrote a piece on college. Well for the kids I recently learned through my daughter, are sometime readers of this blog, I’d like to give a brief overview of what comes after that. Career selection.

Many kids go to college with no idea of what they want to do or why they want to do it. That’s OK because you’re still young, and have nothing but options. But too many end up with degrees in Feminist Art-History, and 250K in debt. This leaves them prepared for nothing but ‘raising awareness’ while serving coffee or manning the McDonalds drive up window. This is a tragedy in my view. So I thought I’d say something about what I know – the private sector world of business.

What attracted me inevitably to a mathematics based vocation, was the desire for fairness. When I was a kid, all I ever wanted was to be treated and judged the same as everyone else. The world is not fair, you see. It offers advantages to some and not to others. T’was ever thus. And since I wanted to compete with the Exeter/Harvard types but had nothing like their elite connections or ‘breeding’, I thought my mathematics skills could level the field. “My numbers were as good as the next guy’s numbers”, was my thought at the time.

That word – fairness – is much abused these days so let me be just a bit more clear. What I wanted was a place in the world where I would be judged on my merit alone. If I was better than everyone else I thought I should be treated better. I was ready to work harder than everyone else, and be more productive, and I wanted a place where that would be seen as ‘better’, and I wouldn’t be held back just because people didn’t like poor white trash like me.

I never found it, probably because it doesn’t really exist. But I got about as close as anyone ever comes to it. My job as a Hedge Fund Portfolio Manager relied on a single number that was in my own personal and complete control, and it was printed every day at the bottom of the page. It was my profit and loss number. If it was a big positive number I was rewarded, and if it was a small or negative one, I was not. That’s what I meant by fairness. My P&L was exactly the same as the next guy’s, and it was the only one of my entire world of numbers that anyone I worked for ever really cared about.

And to get that ‘fairness’ I made huge sacrifices. Crushingly long hours, a stress level so high it’s unimaginable by anyone but combat soldiers, and a daily life filled with nothing but staring at a screen and trying to outsmart the very smartest and most motivated people in the world. But that competition wasn’t a burden for me, it was my salvation.

I’ve always loved solving problems. I love taking a thing that’s not working as well as it could, figuring out the problem, and making it into a smooth running machine. I started trying to figure out how the economy worked, which led me to Wall Street. There I learned all about Market Economics and a great deal more as well.

Eventually I got to the point where I knew enough to do the same kind of problem solving with entire businesses. I’m still doing that now. These days I look at the world, see what’s missing, and make it. Then I get others to help me make it better and sell it – because it’s too big a job for just me. But that took me 25 years and a workload unimaginable by most of today’s kids. Going forward, I wouldn’t recommend it. A more conventional path is the right way to go for almost everyone.

Being an entry level cubicle drone is dull, there is no doubt. But it’s an opportunity for education. It’s a place to learn how the business world really works; to learn why one project moves forward while another is set aside. Why the men and machines that have built the world choose to do what they do. It isn’t all oppression and exploitation – in fact quite the contrary. No business can force its customers to buy from it. You need to give them something they think is worth more than the cost. At best you can ask them to buy something. Only the government oppresses, because they’re the only ones who can use force to extract the money they need. Everyone else must be better than someone.

Here’s something no one will tell you in College. Your boss in that cubicle farm is hoping every single day, to find someone who justifies promotion. He’s looking for someone who is responsible, reliable, and unlikely to make big serious mistakes. He (or she) is looking for someone who understands what you’re all trying to accomplish, and can credibly handle more responsibility. They want someone who has the knowledge and people skills to be in charge.

There is nothing as valuable to a manager as someone they can delegate to because a managers most precious asset is his time. There aren’t enough hours in the day to do all that needs doing, and at some point he’s going to have to trust someone else to see that through.

You can be that person. It won’t happen quickly, because a mistaken promotion is expensive, and managers can’t afford unnecessary expense. But if you are the most reliable, competent, and credible person in the room, you’ll get it. Your bosses want nothing else, and will go to incredible lengths to make it happen. You can have everyone on your side just by being the right person. Who’s that? He (or She) is the person who does the right things. Businesses don’t care if you’re male or female, or if you’re black, brown, green blue or pink. They only care if you can see the problem, and come up with a workable solution.

Businesses in some sense, are all alike and can be broken down into component parts where your specific skills will be more likely to lead to promotion. Going from front to back they are sales (which really requires only first rate people skills but often comes with considerable stress), operations (which involve orderly thinking and organization, as well as some people skills and some stress capacity), and broadly stated, analysis and accounting (which involve high precision and math skills, but don’t necessarily produce much stress.)

And in each of those departments and for the company in general, decisions are made by the following process more or less. First there is planning, which is done predominantly by management, then there is the execution of the plan, which is done in the middle and bottom organizational tiers, then the reporting on the execution which is done afterward and passed back to the management team to arrange the next plan.

Though it varies greatly based on the industry and specific company, Sales and the ‘front office’ is more planning work, operations is all of the above, and reporting is done more by analysis and accounting. Though since reporting is done to management in order to form the next plan, where the process starts and ends is kind of subjective. I think of it as starting at the top because it’s where I am personally in the organization structure. But the truth is I did market analysis to make my initial business plan, and all I talk about these days is execution, so it could really be anywhere.

Wherever it starts and ends though, round and round it goes with some level of planning and some level of execution and analysis done in all departments, and throughout the management layers. Small projects are handled in each department by middle managers, and larger projects by more senior managers, all the way up to the Executive offices which plan strategically for the whole company. Everyone offering their specific expertise and perspective.

This was true in the hedge fund world as well, though you wouldn’t know it from the outside. Sales was the ‘investor relations’ departments though it flowed over a little to the PM’s and investment decision makers who came up with the ideas that generated the investment return we were ‘selling’. Then came ‘operations’ who were the Traders, and (literally) ‘operations staff’ who ensured the investments we intended to buy in fact got bought and paid for. Then finally, the analysis and accounting departments of Risk and Financial would determine if we really took the risks we thought, and it really made the return we hoped for, and would report this back to management. It’s the same basic process in every business.

It doesn’t matter what business you’re in. In a business properly run, it’s always done this way. Every decision involves a plan, executing the plan, and then reporting on the execution to form the next plan. And as you gain knowledge of the business and demonstrate that you’re the right kind of person, you will increasingly be brought into ‘planning’ work, and execution will become less and less a part of your job. A CEO does almost nothing but planning.

You might have noticed that I didn’t mention the IT department. And that’s because in any company, the IT department is like it’s own company with the business itself as its customer. Every industry requires IT now because business decisions are no longer made by ‘experts’ and are instead, increasingly being made (in well run businesses) by data.

IT interacts with every department at every level. And every company I’ve ever worked for had some things it did well in IT and others it did poorly. And to be clear, Apple and Google are not IT companies, they are companies that offer an IT product, and have internal IT departments that meet their internal needs. Apple, for example, sells phones. It designs them, builds them, markets them, sells them, and fixes them, with planning, execution, and reporting happening in every department. All for a price. But it’s internal IT departments work with Apple sales, apple operations, Apple Analysis and Apple Accounting.

A good Desktop Support staffer can work in any company, selling any product in any market, and his job will look the same. Every single modern company on the planet needs Network administrators, whose job doesn’t change if the company is making shoe laces or jet engines. It’s a world unto itself, that touches everything.

So what do you love? How do you want to interact with the world? You shouldn’t worry about having a job that makes people think you’re important, because no matter what you do, if you want to ‘make a difference’ you can do it anywhere. The world is full of unemployed people holding out for a job that they think properly signals their virtue. Unless they have 250K in college debt, in which case it's back to the drive-up window.

As I’ve said many times, Apple and Microsoft have done more to improve the lives of the poor than all the charities and NGO’s in history combined. Businesses build EVERYTHING. Even your rainbow flag, megaphone and "Hey Hey, Ho Ho" banner was made in a business someplace. Want to see how the world works without business? Have a look at Venezuela. Some business do it well and others do it poorly, and that's actually a good thing. Because no one does it poorly for very long, and that gives you a chance to do it instead of them. With that said though, nothing last forever, and you should choose an industry that looks to be around for the longer term.

That isn’t always easy to see. In the film the Graduate, Dustin Hoffman got the advice to think of Plastics, which was all the rage in the 60’s. But by the 90’s , growth in east Asia and lower cost labor had all the plastics companies in the country moving there, and the jobs disappeared. Detroit once boomed with the Auto-industry of the post WW2 period, but now it’s a Hell Hole.

Something similar has happened more recently in my industry of Finance. The deregulation of the 80’s made the industry boom for 30 years and I got in on some of that. But the hyper-regulatory Obama years and the general ‘punish the rich for getting rich’ attitude of the country has now all but killed it for guys like me. Politics is as likely to shatter your career as make it, and you need to be careful about doing something that seems ‘cool’ for political reasons because the wind will change and it will go away when you have fewer options than you do now.

I personally think the very popular ‘sustainable energy’ industry will one day soon fall on hard times. That industry only makes money because of the huge government subsidies they get. The technology can never stand on it’s own in a free market, and when the political wind changes so too will the future for ‘sustainability’. Windmills were invented in the 5th century BC, and we’ve been praying to the sun for 15 centuries before that. Coal and Steam are new technologies by comparison. If ‘sustainable’ technology were ever going to be the thing that drives energy production, it would have certainly done so by now.

And since we’re talking about things that don’t work by being better than everything else and instead rely on politics, let's have a talk about Government.

Government is essentially a monopoly on force. It can both force its customers to take its products (try not paying you taxes and see what happens) and since it’s a monopoly, it doesn’t have to be better than anyone, at anything. It can be as poorly run and inefficient as it likes and the answer to it’s ‘customers’ is always the same. “Fuck you… pay me.” It’s a place that attracts the worst, most unscrupulous people, to do a variety of stupid and usually damaging things.

My mother always wanted me to work at the post office because it was safe, but that was right for her, not for me. It was safe because “merit” in government doesn’t matter at all. You have to be a REALLY bad postman to get fired from the post office. If you’re a teacher in a public school, you can’t really be fired at all. And that goes all the way up the management chain. So in government your boss can be a really bad boss, and no one will punish them for it. And from my perspective, there is nothing worse than working for a bad boss.

I couldn’t face a life in a world where merit meant nothing, like it does in government. Where you get promoted based on who you are and who you know instead of what you contribute. That, I was certain, was no place for ‘poor white trash’. It seemed to me to be a place where every decision would be made unfairly which is what I wanted to get away from in the first place. And history more or less confirms that this is all too often the case.

Working in the government is no place for anyone with a soul. No place for anyone who is in any way concerned with fairness. Politicians won’t tell you this, but Government is really about redistribution. Most of what the government does is take money from people who earned, it and give it to people who didn’t. Why? Because those people vote the way the politician wants them to – for him. It’s a kind of organized theft, done on a famously grand scale. There are good people in government, but they are in a serious minority, and got to the top, in many cases, based on their lack of merit rather than because of it.

To work in government is to be a part of that process - a part of the corruption and redistribution from deserving people, to the undeserving. Yes, we need a military and the courts. But those portions of the government aren’t known for their ‘fairness’ either. That’s how it all looks to me.

One last thing. Wherever you go and whatever you do, you’re going to have competition when you get there. Suppose you’re my polar opposite and have decided that you’d like to make you’re living exclusively on your charm instead of your intellect and work ethic. Well when you get to a job that only requires charm, there will already be a bunch of VERY charming people there, already doing it. Some of them will be doing it better than you and will resent the fact that you’re crowding their turf. Like I said … t’was ever thus.

So the things to think about aren’t your politics and how ‘cool’ something is. The thing to think about is what you excel at. What simple tasks make you feel good every day. If you like working with people more than things. If you like being organized or prefer problem solving. If you like working with your hands, or with ideas, or with persuasion; If you feel more competent with numbers or words, or trinkets, or tools. That’s how you choose what to study, and how it will lead you to a career.

Don’t feel pressured. You don’t have to know today. College is a time for figuring that out. The world will look like a very different place for you in a few years than it does for you now. Just think about how you thought of the world 5 years ago compared to today. It’s still changing that quickly for you. And when you get there, all these questions will be much clearer in your mind.

You just want to be careful not to waste too much time or energy on something that leads to uselessness.


It's kind of trite, but one thing you hear often is that you should do somehting you love so you'll love what you do or some such nonsense. It's not all nonsense, it's just not much help. What in the world do you 'love' at 17? If There is something to be said for doing a thing you're good at, because when you do, you'll succeed more than fail. I've written about this before. But love? It's not about love. What most people love about their careers is when things go well, and they hate when things go badly. Better to find something you can tolerate doing, that has the right combination of tasks that makes it 'not unpleasant' for you, and then go to an area that gives you a chance to work with your best skills.

But here is the simple fact. The best paying jobs in the modern world require a skill set that includes complex reasoning. And not everyone is going to be smart enough for every job. But here's the good news. I know a lot of true geniuses. One of my very good friends was 1st in his class at the Chinese equivalent of MIT... 1st! He's probably one of the smartest men alive. And I wouldn't let him paint my bathroom. Complex reasoning is ALL he can do. If a job is too simple he overthinks it, and he's not very good at physical tasks.

No one is good at everything, but no one is good at nothing either. One of the richest men I know is a potato farmer (he has his own jet and about 3,000 employees) and another owns a demolition company. There are a lot of tasks where you can make a lot of money if you're good at them. You just need to understand the things you're good at. It might be math, and it might be communications, it might be sales, or design, or logistics, or project management. There are a million ways to find success in a free economy.

So the best advice I could give any of you is to know yourself. Look inward and be realistic about the things you can't do well, but also be realistic about the things you can do well. Give yourself credit for the strengths with the same vigor that you criticize your own weaknesses. If that's all you learn in college, then everything is going to work out fine for you.


MikeCLT said...

Another excellent post to send to young people in high school and college. I particularly liked the update about your friend the potato farmer. He is not as smart as your Chinese friend (who is?), but he has found great success in his career. He is almost certainly one of the smartest potato farmers. You don't need to be the smartest guy in the world to have success but if you can be among the top 10% in skills for your field you will likely be successful.

VV said...

Good point on the farmer. Thiel has a nice article on this topic in WSJ, where he debates why youngsters may benefit from avoiding crowded races like ivy-league-to-investment banking and focus on developing a niche.