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Thursday, September 10, 2009

Advice to the Young--Go Big or Small?

As many of you know, I now serve as a part time professor at two universities. Recently, a student who is a senior approached me and asked about where he should apply for a job next spring. We talked about many options and issues such as how far he was willing to move from home. Then he asked about working at a big company vs. a smaller one.

I suppose that I gave the standard arguments. At a big company vs. a smaller one you are given more thorough training, are exposed to broader thinking, and there are far more people to talk to about key issues and developments in the industry. At a small company, you can get involved in fairly major issues rather young and you get to know top management close up.

When I got home, a book was awaiting me. It was Lawrence G. McDonald’s A Colossal Failure of Common Sense, about the collapse of Lehman Brothers last year. By great coincidence, McDonald devoted some very heated copy to the issue of big vs. small companies.

McDonald and his partner, Steve Seefeld, had built a remarkable dot.com up over several years that provided bond analyses on line. It became so successful that they sold it to Lehman and became very rich young men but also Lehman employees. McDonald said they loved their start up venture because they lived by some simple rules—“If you have something to say, say it. If there is something to do, do it. If you’ve screwed up, admit it.”

But both were a bit shocked at the Lehman culture. Seefeld became fed up and left quickly but McDonald stayed on and fulfilled a lifelong ambition to become a trader.

Comparing Lehman to his dot.com he said, “The whole ethos of a major company is different. There are people forever trying to cover their own asses, people who have somehow carved an entire career out of making small but telling criticisms of other people’s work. That’s because in a big corporation, the guy who spots a screw-up is somehow cleverer and more valuable than the guy who wrote the 40 page marketing plan in the first place.”

You would think that he has made his point but turn to page 58 and McDonald really stokes up the heat as follows: “Fear is the key. Fear of being the one person in this whole morass of execs who got it wrong. Fear of being the scapegoat, fear of looking ridiculous, fear of being fired. Thus there develops a whole art form of corporate ducking and diving, staying out of the firing line, writing memorandums that somehow shift the responsibility, not being seen with your head above the parapet, subtly seeking the glory but always dodging the blame, carefully filing that memo that will ultimately exonerate.”

There is no question that all organizations have politics and once you get to a certain size it does get in the way of getting the job done. I clearly do not have as much anger in me as Mr. McDonald but directionally he makes a very good point.

I have observed that of the relative handful of jobs that I had, with each move I went to a smaller company. And, each time my influence on the enterprise and my happiness increased fairly significantly. I also appreciated very much that I was no longer at my first two jobs which were at larger, more bureaucratic places.

The only downside at the smaller places was that there were sometimes, but not always enough people to share your thoughts with or peers or top management who constantly challenged you to sharpen your thinking. But my last three jobs where I spent almost my entire career were places where I could speak by mind and I often did.

I can honestly say that I never had a fear of getting fired as I always thought there would be someone out there desperate enough to hire me. And, I lived fairly modestly so I was never under the gun financially.

So what do I tell my young friend the next time I see him? Probably start at some place fairly large and get some good training and exposure to a much wider world. If you start to chafe at the big company politics or bureaucracy, move down in size but not necessarily in quality. Find something you love and stick with it. I did and I have never regretted it.

By the way, the McDonald book is a very easy to read book about the Lehman collapse.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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