A book on the persistence of elites is an unexpected guide to getting a good job
economist.com
economist.com
So who do you pick? You have all these well-educated, similar people. So of course you go for the ones you like. You ask them stupid brainteasers and stock questions (what's your greatest weakness? Where do you see yourself in 5 years?) and just see who will say something you like. They are just as capable as the ones you don't like. This is also the reason you need to have gone to a top uni: why bother looking for a skill that everyone has? Nobody ever got fired for hiring IBM.
Oh, one exception: the children of the powerful. A buddy of mine worked in investment banking and there were a number of kids whose parents were CEOs of known firms, or other important people. Those kids are going to be able to do the job at hand as well as the future job of getting business. It does tighten the pyramid for the other capable kids, but they know the game.
Contrast that with a job where the skill is roughly as available as the demand. Where it is possible that the random guy off the street cannot do it (eg iOS developer). What do you do then? Well, now you can't just show up to the interview unprepared. You need to spend time asking real, discriminating questions (How do optionals work in Swift?). You also might need to balance your opinion about the person's character with your need to have that skill in house.
Why does it make any sense that these jobs with ridiculous numbers of qualified candidates would "get to be" the 1%, as opposed to those others you mention (iOS developer)?
Not asking you specifically, lordnacho. Just a question to the universe that's probably as useful as asking "why me?" whenever anything at all happens. Still though.
Finance guy has been told his whole life to work hard. He goes into finance because he can't think of anything better to do (why don't interesting companies go to recruitment fairs? WTF?), but he does have this one trump card which is he went to Harvard. Having no particular interest, he goes for the highest paying job.
The reason these firms don't screen for knowledge is that they don't care what you know, they care what you can be taught. These are fields where you can't learn the job without actually doing the job, and where relative skill often matters more than absolute skill.
Professional services margins are already so huge (think 200-500%) that what you pay your employees is almost irrelevant to the bottom line. Thus, these careers are highly lucrative and usually pay 10-20% more than the exact same job in industry.
2) These people are (In Thiel's words) indefinite optimists. They don't know what they want. They could do anything. There's plenty of other boring jobs they could do. You have to pay up. By contrast, iOS dev guy needs an app company.
3) A lot of these firms run pseudo-monopolies. It costs a LOT of money to get a bank license. There's only 4 big 4 firms left, and you can't have Mickey Mouse as your auditor. The magic circle is not getting bigger. Monopoly profits means you can pay over the odds. You can have a hiring strategy that is basically just a burnout factory. More hamsters will come.
But the authors fail to mention that these firms have turnover approaching 50% per year for new employees. As a new employee fresh out of college, they work you like a dog and wait for those who can't hack it to quit. The first two years are screening for work ethic (though by "work ethic", they mean how much of your life you're willing to sacrifice to the job).
And likability is the core criteria because not only are these professional jobs, they are professional service jobs. As in you work directly with clients. So it's a huge asset to the firm if you're a likable person because you'll have better client relationships that lead to you selling more work.
I've worked in management consulting for a while and that's just the game. Executives at large companies almost invariably have consulting backgrounds themselves, so they know how it works.
Fast-forward 10 years, and now you're a pretty big company. You want to start manufacturing your product yourself instead of sending that work out to someone else. Do you know anything about managing a manufacturing operation? Say you want to acquire a company. Do you know anything about integrating it?
I think it provides some value, but I am not a huge fan. In my experience, the devil is in the details and the failures come during the implementation, and the management consultancies in the Marvin Bower tradition explicitly side-step implementation.
That is also a practical reason why consulting firms hire from Harvard and care about SAT scores. Getting a 1600 SAT doesn't mean you're a good manager. It's probably a good indication you're good applying abstractions to concrete situations.
Most big management consulting firms these days also do both management consulting and system integration. The margin on management consulting work is sick, but the projects aren't that big (a few million dollars over a couple months). The margin on implementation projects is much lower, but the projects themselves can be enormous (think hundreds of millions over several years). So you're fucking your implementation guys if you deliver an unimplementable plan. And in a partnership model, if the implementation project fails, the partner who did the management consulting piece of the work still takes a hit.
Other times tough choices need to be made, and it's easier to fire 10K people with a powerpoint deck from a reputable firm.
Management consultants often get called in to vet risky projects management is considering. The idea is that if a trusted outsider OKed the project, and it fails, then management at least didn't act irresponsibly in undertaking it. There's a surprising amount of ass-covering in this world.
The other scenario is when a decision needs to be made that will inevitably hurt someone in the company, so it's hard to find an impartial insider. This is why management consultants get pulled in for re-orgs, for example.
You might be thinking of strategy consultants, which are a rapidly-disappearing subset of management consultants. They often deal with very high-level problems such as "our company's market position is disappearing; what adjacent markets can we move into?" You then get an answer that may not be the one you were looking for, such as "you should look to sell the company while your value is high". But this is often backed up with a dizzying amount of thorough analysis, so it's not just some random guy telling you something.
Much of what I've been doing recently has been helping development organizations at large companies convert to "modern" management practices. Things like bringing your ops folks into the dev team as DevOps, how to structure teams to manage automated testing, planning how dev environments (i.e. CI environments) should be structured and used so that continuous delivery is an option down the road, etc.
I happen to focus on software development and technical operations because that's my background, but there are people doing this for manufacturing, shipping, call centers, etc. There is sort of an "ideal way" (aka "best practices") for most companies to do most things. HN might cry "No there's not!" but this is actually true because most of our clients are too big to really be innovative. It can be hard for an insider to see what's working and what isn't. Also, because I move from client to client relatively often, I get to see how a lot of different companies do things, so I can bring perspective that someone who only works at one company all the time can't.
And usually, it doesn't matter if the manager trusts my opinion or not. Either myself or someone else from my firm has developed a trust relationship with someone higher up in the company (usually a VP who has a discretionary project budget) who has brought us in to help. The core of the business is trust: that's why you have to be a likable person capable of building lasting human relationships. It's in both parties' interests to maintain these relationships; the consultant uses them to sell work, and the client uses them to solve problems. It's a win-win.
Upon reflection, I definitely felt that the first few years were a test to see how much of your time you were willing to let the job consume. There was overt pressure to work long hours and come in on weekends, but ultimately people who wanted to maintain better balance between work and personal time ended up leaving of their own volition rather than being forced out.
I don't think it's so surprising that personality and likability are valued so highly for entry-level hires. These institutions are so large and bureaucratic that there's a real limit to what one person can do, especially early in their career.
It's actually seen as bribery and is illegal. From [1]:
> U.S. authorities are examining whether JPMorgan violated anti-bribery laws by hiring the children and other relatives of well-connected politicians and clients in China in exchange for having business steered to the firm,
[1] http://www.bloomberg.com/news/articles/2013-12-08/jpmorgan-c...
"One candidate in Ms Rivera’s sample passed the interview by adopting the persona of a successful consultant that he knew at that firm. Even if you do not go that far, you must at all costs avoid appearing nerdy or eccentric: there are plenty of jobs with tech companies for those types. The old-fashioned belief still prevails that playing team sports, especially posh ones like rowing, makes for a rounded character....
This overwhelming emphasis on style rather than substance may seem an odd way to select members of the 1%. But those at the top of the consulting, investment-banking and legal professions know that the most prized possession in uncertain times is not brainpower, but self-confidence. For all the talk of the world becoming dominated by a 'cognitive elite', in reality it appears it is nothing more than a 'confidence elite'."
It would seem that someone with a past in one of these firms who actually had a good 'fit' there would make a poor fit for most tech startups. [1]
So then I back look at this sentence, "The top ranks of governments and central banks are sprinkled with Goldman Sachs veterans. Technology firms, though they are catching up fast, have nothing like the same grip on the global elite."
Our tide is rising, and they can wait in their confident complacence. They'll never see it coming.
Yes, the hacker ethos will easily create more wealth than this posturing dreck. But only if all that productivity is directed towards the right problems. And often those problems are not profitable-looking ones---which means you probably won't be working on them as an employee. As an academic, or independent, perhaps, but hopping onto craigslist doesn't net a whole lot of world-changing opportunities. And it's in those very opportunities that there's enough froth to upset the established order.
Saying no to money requires...confidence.
So keep working, keep learning.
I went to international school, and I noticed the kids who were playing the popularity game tended to be Americans. The ones who liked to say who was in and who was out. The ones who wanted to be cool, the ones who watched all the right shows and wore all the right clothes. It was a really strong influence on the other kids, and it was particularly Americans who'd recently arrived.
Since it was an international school, not everyone bought in.
All except for my high school, which was predominantly immigrant (majority Russian/ex-Soviet bloc, minority Asian; parents were mostly geeks as well), which culturally felt a lot like Silicon Valley: nerdy, eccentric, and optimistic about the future. Unsurprisingly, there's non-trivial overlap because many of my friends from high school moved out here for work or to start companies.
In many cases, American children (at least in my region of the country, growing up in the late 1990's & 2000's) are told that they are exceptional at a young age by their parents/mentor figures. This article sums up the environment nicely.
http://www.huffingtonpost.com/wait-but-why/generation-y-unha...
I think a desire to fulfill this expectation of individualized achievement can lead adolescents to pursue peer approval as an activity unto itself, the so called "trying to be cool," you may have observed.
As a mate who went to a minor public school (Bedford) it was Rugger, Rowing and Drinking Beer as the school sports.
I believe the ratio is far higher in English speaking, white countries as they can freely join Wall Street and the supporting infrastructure.
The ratio is lower in non-English speaking countries like Asia.
Thus we have the strange shift of R&D and manufacturing (especially manufacturing) to Asia where brightest graduates end up in industries other than management consultancy, investment banking, and law firms.
Soon the new manufacturing centers will wonder why they have to hire Wall Street when that can be done elsewhere? Especially like in China.
I know I will get flak for this but the 3 career paths are not good for the nation, while it may be good for the few who are in the top 1%.
While SpaceX and Tesla and Apple are great, it's not enough.
The IB interview process does a very good job of screening candidates for mastery of basic skills -- if you don't have a very strong grasp of accounting, valuation, free cashflow, and so on, you will not get an offer.
After passing those competence hurdles, yes, personality and fit questions do matter.
I would guess the same thing applies here (please correct me if I'm wrong, given your experience) -- almost all the folks who apply will have a fairly solid grasp on accounting, valuation, etc. (the technical/knowledge parts), especially if they're coming from Harvard/Stanford/et al.
Therefore, since "knowledge" isn't a very good differentiator (everyone who gets a resumé on your desk is competent), folks in these prestigious positions have to filter for something else -- and it seems they've chosen "fit".
If you think that everyone who applies to IBs has solid grasp on accounting, valuation, etc - you are way overestimating average Ivy League student.
Candidates who could get past the competence checks could get dinged for fit questions, but there weren't so many of them that we could be terribly choosy. Maybe Goldman can be. There just aren't that many people who are that smart, that skilled, and that willing to work that hard.
Now that's entry-level. Who is promoted and succeeds, that's a different question. Fit questions matter a lot more there. But even then I think the key skill was the ability to see problems from a client's perspective, and from a senior banker's. The folks who can execute with those perspectives in mind, those are the ones who do very well.
Investment banks, at least at the entry levels, are meritocracies. If you can understand what it means to deliver, and deliver, you'll do well. But that understanding is trickier than it looks.
Now there is a networking effect to this process. But it's more about getting information about what skills the banks will be looking for, and where to get that information, and the standards that they're looking for. This stuff isn't written down in manuals, you have to extract it from other people. If you don't know that stuff, you don't know what targets you have to hit.
> The most important quality recruiters are looking for is “fit”
> looking the part is essential.
> Recruiters repeatedly told Ms Rivera that they looked for people who could be their friends as well as their colleagues
> Emphasise any similarities that you can find between the two of you.
Really? That seems like standard stuff required for any professional job, not the ones that might earn you enough cash to be in the "1%".
Are they looking for workers for actors/models?
Which makes perfect sense in any industry where you'll be dealing with customers and clients.
Ever watch a successful politician on the campaign trail? They dress to match the particular audience they'll be talking to.
No thanks.
This is one of the positive aspects of professional services recruiting that I think other companies should emulate. It's crazy that engineers have to get through non-engineer filters to get hired.
To rather too much corporate management, engineering is a blue collar job. It happens to require computers instead of metal and power tools, but it's still not "revenue generating" in the strategic, legal, or financial-industries sense.
Obviously not all management is like this. But there's still a whiff of working-with-your-hands contempt for engineers from many people who work primarily with money and power. And the cultural differences, and differences in motivation, shouldn't be underestimated.
They don't call it a "confidence game" for nothing.
"Those at the top of the consulting, investment-banking and legal professions know that the most prized possession in uncertain times is not brainpower, but self-confidence."
"The most important quality recruiters are looking for is “fit”: they would sooner choose an easy-going person with a second-class mind than a Mark Zuckerberg-type genius who rubs people up the wrong way."
This is exactly why these industries are ripe for disruption. Unfortunately, medicine/healthcare operates like this also to a large degree. The world will be in infinitely better place when this changes and second rate poseurs are replaced by legitimately competent and valuable alternatives.
I do tire of the idea of that only people who excel in business comprise the one percent, far too often those who write the laws do nearly as well economically