There comes a point in the career of every successful executive when another promotion, a larger office, and a more elaborate job title cease to have quite the intoxicating effect they once did. The problem is usually arithmetic.
A newspaper report a couple of days ago described a procession of senior executives quitting large, generous employers to set up on their own. The proximate causes varied — a passion for wellness, a longing to “build something” — but buried in the piece was the real trigger: at some point, these people did the maths. However magnificently a firm pays its stars, the stars are still building somebody else’s equity. The salary is rent; the asset belongs to the landlord.
What makes this delicious rather than merely sad is the role companies play in engineering their own heartbreak. Consider the modern corporate courtship of the “high-potential” employee. She is identified early, sent on leadership journeys, given a mentor, a sponsor, and a coach (these are different people, apparently), and rewarded with accelerated promotions. Above all, she is exhorted, in every appraisal and offsite, to “think like an owner”.
She is encouraged to take ownership of problems, of outcomes, of the customer experience, of her own development. The one thing she may not take ownership of is the company. Think like an owner, by all means — just don’t expect to appear on the cap table. It is the corporate equivalent of urging someone to fall in love while making clear that marriage is out of the question.
Then, one day, the high-potential employee takes the advice literally. If she is to think like an owner, she reasons, she might as well become one. The company reacts with wounded astonishment; HR convenes a task force on retention; consultants are summoned and someone proposes a “stay interview”, which is like an exit interview except conducted while the hostage is still in the building.
The retention machinery then whirs into action, and here the comedy deepens, because everything it produces is a smaller version of the thing the departing star actually wants. She wants equity; she is offered deferred bonuses. She wants autonomy; she is offered a “broader mandate”, which means more meetings. She wants her name on the door; she is offered a title with the word “chief” in it, joining a C-suite now so populous that it resembles economy class on a budget airline.
None of this works, because the problem is not emotional but structural. An employment contract, however lavish, has a ceiling. Ownership does not. The executive who grasps this has not become disloyal; she has merely become numerate. Companies that spend fortunes teaching their people financial acumen should not be shocked when the lesson lands.
Which raises the genuinely interesting question: should companies even be trying this hard? The fashionable obsession with retention treats every departure as a failure, to be tracked, regretted, and benchmarked. But if your most ambitious people occasionally leave to build things of their own, that may be the surest evidence that you hired the right people in the first place. A firm that nobody ever leaves to start something is not a talent powerhouse. It is a very comfortable waiting room.
The wiser companies have quietly accepted this. They treat their best people as future alumni rather than lifetime property, stay on warm terms, invest in the odd spin-off, and occasionally hire their former stars’ start-ups as vendors, acquiring back at a premium the talent they once had on salary. It is an expensive way to learn that the only reliable means of making employees think like owners is to let them own something.
The rest continue to perfect their retention strategies, their stay interviews, and their chief-of-everything titles — solving for everything, in fact, except the arithmetic. And the arithmetic, as every high-potential employee eventually discovers, always wins.