Daniel Gulati is a tech entrepreneur based in New York. He is a coauthor of the new book Passion & Purpose: Stories from the Best and Brightest Young Business Leaders. Follow him on Twitter at @danielgulati.
Stuart stood up confidently and addressed the group: “I studied Art History at Yale, worked at Bain for two years, then Morgan Stanley. After finishing my Stanford MBA, I took a banking job at Goldman Sachs.”
I’d asked him and a small group of smart individuals to describe their professional achievements. When Stuart sat down, the others followed in much the same pattern, proudly rattling off their personal laundry lists of the prestigious companies they’d worked for and the top-tier universities they’d attended.
Had I left it there, this would have seemed like a collection of well-oiled, talented superstars living comfortably at the top of their professions. But as I delved deeper, I found out that they weren’t comfortable at all, and their flashy affiliations were no guarantee that they’d actually accomplish more than anyone else. One said, “I promised myself I’d move overseas, but the Blackstone brand in New York is just so strong. I had to sign.” Said another, “The work is meaningless compared to the policy think tank I wanted to join. But everyone knows Morgan Stanley, and it’ll open up so many doors later on in life.” The same patterns surfaced: exciting visions sabotaged by the desire to be associated with well-known institutions.
If their goal was to stand out by joining these organizations, they’d pursued entirely the wrong strategy. Traditionally, associating yourself with a prestigious brand did wonders for your career because of the signalling effect. Employees could credibly convey information about themselves by gaining experience at certain companies and acquiring academic credentials. If you got into Unilever, you must be a good marketer. If MIT admitted you, you’re a high-potential scientist. But a core assumption of job-market signalling theory is asymmetric information between employers and prospective employees. In other words, employers have to rely on imperfect signals as ways to glean information about potential hires. In today’s world, this assumption no longer holds.
Ironically, proudly flaunting your affiliations — company, university, or club — will only make you more of a commodity: another banker, another Ivy League graduate, another know-it-all scientist. Instead of just resume-gardening, distinguishing yourself through real, tangible accomplishments shows the world what you’ve actually done while de-emphasizing who accepted you into their organization. The latter is a superficial vanity device designed to boost confidence; the former is a validated, objective measure of your skills and experience. The relentless focus on “what” is how people without bulge-bracket work experience or Ivy League degrees are beating out those obsessed with the glitz, glamour, and false safety of their memberships, associations, connections, and relationships.
Here’s why prestige matters less than ever:
1. Prestigious companies have suffered. The Financial Crisis tainted the reputations of some of the world’s largest corporations — from big banks to blue chips like General Motors. Newscorp and other recent corporate scandals have only fueled existing doubts. Signalling loses relevance to the extent that these organizations no longer confer credibility onto the individuals that join them.
2. Social media pierces the corporate veil. As the adoption of Twitter, LinkedIn, and Facebook continues to grow, we’re able to effectively separate the individual from the organization. Consumer internet platforms like these allow people to publish their output independent of their organizations, giving everyone a direct lens into an individual’s abilities and passions. This improves the underlying quality of information available, further reducing the need to signal the “old” way.
3. New tools exist to accurately assess skills. If you’re a data scientist, you can compete on Kaggle against a global cadre of experts in your field. Rather than relying on your college diploma, we have a better way to test your programing skills: Codecadamy. And if you’re coveting a social media role, a high Klout score might seal the deal. These new tools are able to measure people’s skills with precision, making college degrees and brand-name companies look like blunt approximations in comparison.
America’s largest companies and most prestigious universities deserve much respect. But being hired or admitted to these institutions is an opportunity to accomplish things, not the accomplishment itself. Therefore, a prudent strategy favors accumulating real accomplishments — revenues earned, clients transformed, or lives changed — in spite of any affiliations you may have.
As traditional notions of prestige are fast losing relevancy, we should all focus more on creating real value. If you’re lucky enough to have attended a great college or worked for a top company, you have an obligation to turn these affiliations into accomplishments. If you’re not one of the privileged few, you’re no longer at a disadvantage. Stand tall, because it’s mastering the process of consistently delivering results that will truly distinguish you in the end.