Basic Office Politics Moves and How Companies Work

Level 1 - NGMI

Welcome Avatar! As many of you know we’re in a recession (according to us at least) despite the news suggesting otherwise. Therefore, instead of looking at the *lagging* indicator which is unemployment, we should be looking at the forward indicator such as FedEX being unable to issue full year guidance!

One of the hard parts when it comes to writing to a large and rapidly growing audience is recognizing that new people will be here every day. The majority of young people haven’t even seen a recession! If you were born any time after 1987 or so you’ve never had a working year in a significant downturn (2020 excluded since it lasted a short month before money printing commenced)

Part 1 - Follow the Money Not Performance

We fell into this trap as well. If you get into a high paying position it does not mean you should work 100% full steam ahead for all of the people at the firm. We’re not knocking this belief as everyone enters the work force with a “work hard” mentality. This is because you likely succeeded in sports and academics by grinding it out and performing well.

Get ready for reality!

Do not try to compete with the CEOs son. Do not try to compete with the overpaid assistant who for some reason is a 10/10 with no degree and always hangs out with the “head of sales” after work for “drinks”. Do not try to please Shawn the guy who was promoted to “Middle Management” 25 years ago and hasn’t been promoted since. Your time needs to be of utmost importance.

Issues With Being Perfect: If you come off as the perfect employee and are always ranked #1 it means that you are by definition not putting the most important person in front *you*. You’re doing far too much for the Company and the payout difference between being #4 out of 20-30 versus #1 out of 20-30 is pretty much nothing (a few grand after tax).

80/20 Rule: To be clear we’re not suggesting that you go full tilt the other direction and do nothing. The “80/20” rule means that about 20% of your actions will drive about 80% of the results. So here is a guideline: 1) be nice to assistants/HR and avoid asking them for anything - avoid all conflict as there is no benefit, 2) only produce your best of best effort for top money makers. This is like leaving your best efforts for the playoffs vs. the regular season. Don’t go 100% all out for the guy who makes the firm $1M a year, you go all out for the guy who brings in $25M a year, 3) show up early and leave a bit later for the optics of it and 4) this will allow you to skip the “unhappy” hour as you establish your personality as more of a “work-a-holic”.

Conclusion: Just like telling people you make less than you do (if in a room with people who make $100K tell them you make $80K if forced into this situation), the goal is to be in the right “group”. That’s about it. If you’re doing everything perfectly you’re losing valuable time for your WiFi business and potentially losing valuable time for your health as well. Neither are worth sacrificing. In the end you’re a spreadsheet item when the real decisions are made. Use this to your advantage and perform when it matters not “all the time”.

Your career is the regular season, your WiFi biz and health is the playoffs. Don’t get them mixed up.

This Guy Definitely Doesn’t Care About Your Future

Part 2 - How Bad Decisions Compound in Massive Companies

Now we all love to make fun of corporate politics. That said there are some reasons why bad decisions compound *and* how you can take advantage of being on the right side of a lot of these crazy decisions. Crazy in the eyes of the typical employee.

Headquarter Benefits: Generally speaking, the largest office (the headquarters) is going to have the lowest number of layoffs on a *percentage* basis. If you have 100 people in the main office and 50 people in 4 other offices. It would be closer to 10 people cut at HQ and 12-15 people cut in each of the other 4 offices. Once again, this is not a perfect calculation it is a simple way of understanding that being in the major office is safer from job reductions.

This seems illogical since it is not tied to money in most cases. The reasoning is simple of course “morale”. Much better to keep morale as high as possible near the hub of the organization.

Also. For those with good reasoning skills. You unlikely want to be in a tiny office (unless massively profitable) since they would be inclined to shut the entire section completely! This would contain the bad morale to one spot and reduce fixed costs over the long-term. You can claim that the issue was regional specific and had nothing to do with the company in general.

Long-Agreement Meetings: You’re probably wondering why we’re bringing all this up now, well layoffs are coming. And. The decision is made 3 months before the year is complete. Read that carefully. This is based on the *fiscal* year end for the firm. The majority of companies have a year end of December 31 however double check your annual 10-K filing to figure out when the cuts will come down the pipe.

The long-agreement meetings are largely a facade. The Company already has a decision maker and if they “hire consultants” it means that cuts are coming and they need a justification for them. The whole point of these long meetings to “agree” is to have more people justify each move and set everything up from a legal perspective (some states require warning before cuts, vacation day payouts, stock vesting triggers and more).

Ego, Ego, Ego! In the end *NO ONE* is going to shoot 100%. Not even the #1 business manager in the world. He’ll fire the wrong person, hire the wrong person, acquire the wrong company at least 30%+ of the time. Shooting 70%+ is the 0.1% of elite.

With that aside, the downfall of shooting so high is that it takes *forever* to throw in the towel. Reasoning is simple: 1) winners never give up, 2) they will iterate for days, weeks, months and even years until they get it right and 3) only after they see that it is not fixable do they close the books.

Therefore, the ideal solution for you right now? GET PROMOTED. Getting promoted is 100x better than leaving for a new Company because you get to keep your political standing (managers above you like you) and it will be 12-24 months before they even consider letting you go. You’ve got a long leash so to speak. Hint this is also why co-workers are not friends.

Conclusion: 1) morale and optics are important for companies, 2) think about how the actual business runs. It is not about a quarterly earnings report. It is about making a few major decisions every few months and 3) in a downturn it is actually quite easy to get promoted *if* you were on the list of potential people. This also gives you 12-24 months of income.

Reading between the lines you can see why having a bad decision maker leads to compound losses: 1) hire wrong person losing money, 2) won’t shut down business line losing money and 3) people around you just want paychecks so rarely disagree. Over time this adds up if the person in charge of the firm/business unit is there for more than 2-3 years.

Bonus: now you know why the worst long-term decisions are made when someone is up for promotion. They optimize for near-term numbers to appear good for that period of time at detriment to the firm and the next guy who shows up.

Part 3 - Job Hopping and Downside

Many of you are talented. If you’re going into a high paying industry you’re likely a high performer and intense competitor. That said, the big mistake is making the wrong moves at the wrong time.

Job Hopping: Unless you have a firm guarantee that cannot be revoked, there is no reason to job hop in a downturn. As a Wall Street example, unless your 2-year guarantee has no clawback and has no restrictions on it for at least 12 months, best to stay put. The only exception we can think of is if your stock is bought out on the exit to the new firm and the money is simply too great (can get cut and not worry).

In short, job hopping is 10x more dangerous now than it is in a bull market. If you are hit in the first round of layoffs it will be REALLY hard to get another slot as other firms are also looking to cut (no real openings).

Downside Management: This is where most fail. They think their downside is “pain for a few months” or “a couple months of unemployment”. Sorry to say this is rarely true in a bigger downturn. As an example, Wall Street in 2008-2009 had multiple rounds of cuts in many cases (same with Tech during the bubble bursting in 2001)

This means your downside case should be 8-12 months of weaker than expected paychecks. Don’t assume defeat. The game is “prepare for the worst and hope for the best”. IE. be optimistic and maintain a lot of precautions for downside protection.

Run the Stats - Net Worth and Work Risk: As usual, run the assumptions based on stats in your area. There are times when the S&P doesn’t move for about 10 years. There are times when computer coins go down some 90%. There are times when business taxes go up 2x. There are times when income taxes have been 70%+. There are times when companies have 2, 3 or 4 rounds of layoffs. Blockbuster went to zero. So on and so forth.

Instead of hoping for a pivot (similar to the hope we saw heading into the Jackson Hole Speech), don’t bank on hope. Bank on math. If you’re already rich the game is asset protection (this means tax haven) if you’re young and broke this means risk taking (keep building up WiFi businesses until one hits - you only need one $500K exit).

Importance of a Second Income and Finding Talent

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On that note, prepare for the worst (next 3 months) and hope for the best. Stay optimistic long-term and make sure you understand that the cuts are coming. Make it through though and you will gain tremendous ground from a socio economic perspective.

Believe in your dreams, don’t hope for your dreams. Not the same.

Best of luck, anon!

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Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce. We’re an advisor for Synapse Protocol and on the JPEG team.

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