The Long-Term Value of Loyalty

Posted on Apr 27, 2010 | 168 comments


Oh, boy.  Here we go again.  Another post on job hopping.  This will be my final word on the topic.  I promise.  My goal here is to move the debate forward, add my POV but not inflame things any further.  Inflaming was never my goal. Let’s see if I can achieve that.

My WORD of the day is “loyalty.”  It’s one of the angles that people who were angered by my original post the most found so offensive.  I think because I implied too hard that job hoppers were disloyal.  So rather than focus on that angle I’d like to focus on the opposite.  The benefits of being extremely loyal.

My original post was directed at hiring managers.  It said that I didn’t believe it was a good idea to hire job hoppers.  I should have kept it in third person.  I should have chosen less inflammatory words.  I didn’t mean to be so insulting and I didn’t mean for the net to be cast so wide that many people wondered whether I was talking about them when I was speaking of “job hoppers.”  I learned a lot from reading the comments.  Most were constructive – even the ones that were harsh.  I’ve already apologized for my tone so I hope you’ve accepted that.

My view still stands – for many hiring managers a large factor in looking through resumes of somebody who is 30+ and has never worked somewhere for more than 18 months will be the job hopping element.  There is a high probability that the person you’re hiring will leave you within 18 months.  You have at least 6 data points to suggest this.  3 or 4 may be for completely understandable reasons.  Since recruiting is so time consuming and costly it is better to focus on people more likely to stay longer.

For those that disagree – let’s please just agree to disagree.  It’s a subjective topic.  We’ve all had more than enough of our views aired on this one.  Moving on ….

My second post was directed at employees.  I wanted to make it clear that I personally believe it is OK to quit a job in which you’re unhappy.  I believe that it’s OK for young people to learn and try different roles, companies and geographies. If you’ve moved around a bit when you’re early in your career that won’t likely be held against you.   Yes, I know that many employers are bad.  I’ve worked for bad bosses before.  I never implied that startups are all great and job hoppers are all at fault.  I know that there has been downsizing and that has led to some job changes.  Some amount of change is expected.  It’s just that if you’ve had 6 jobs in a row of each 18 months or less the person who is looking to hire you at the next job is naturally going to wonder whether it’s a pattern.  Your job will be to convince them that it’s not a pattern.

So I advised people with a lot of job hopping on their resumes to try and limit the number of them listed.  Getting an interview is the first chance you have to convince the potential employer otherwise.  If you want that advice please click on the link.

I also made in clear that I have NO problem with people who choose to be independent contractors as a career choice.  To the contrary – if you know how to sell your own work, can negotiate good rates, network well, keep consistent work and have a great reputation – it can be very rewarding.  If you’ve done it for a long time then I usually advise hiring managers to hire you as contractors and not full-time employees.

Finally, I made clear that there are ALWAYS exceptions to the rule.  They come in the form of personal references.  No rule is ever absolute no matter how it sounds when one writes a blog.

But one theme really didn’t come through in either of my posts and it’s an important point.  There is a lot of long-term value in loyalty.  And I think this is sometimes missed by those who run to quickly to greener pastures.

The things you learn in tough environments

Most of what I learned about operating startups I learned from the really tough years at my first company from 2001-2003.  That is when no customers wanted to work with Internet startups because we as an industry had burned so many customers.  No employees wanted to join startups – they were all looking for stable jobs.  My company had raised venture capital in April 2001 but we were told that there may never be any more coming.  I was paid less in salary in 2004 than I was paid at the job I quit in 1999 (a job I had held 8+ years).

But in these years I learned how to sell software – necessity is the mother of all invention.  I learned how to better run a product management process.  I learned how to integrate customers into our product development process.  I learned how to better set goals for employees and reward those that performed well.  I learned how to retain employees when stock options were no longer a real currency.  I learned how to get press coverage when we were no longer “hot.”  I learned how to manage costs effectively.  I learned that I had a lot to gain by not being so adversarial with my competitors.

I never built Google.  I’ve acknowledged that many times.  But in our first year of sales (and those were really shitty years to be selling software) we sold $2.1 million, then $5.9m, $7.7m and we ultimately sold when we hit $14 million and had more than $30 million in backlog revenue.  I learned about revenue recognition.  I learned how to establish a technology center in India and how to manage disparate development teams (and this has drive my thoughts also about what does NOT work.).  I learned how to establish sales targets and how to manage a sales pipeline.  I learned how to do a pipeline review with sales people without getting bullshitted to.

Listen, I’m not telling you these experiences are for everybody.  But these are things you could never learn in 18 months.  These are things that my team learned with me by sticking around.  No doubt they have more intimate knowledge of these processes since they actually ran them.  We let everybody “punch above their weight class” in terms of roles & responsibilities.  We all learned.  And eventually many of us also made money.

The relationships you build will be enduring

One of the things that Jason Calacanis talks about in his post on the topic is the value of personal loyalty.  He’s right about this.  The people that I’m closest with in life are: my family, my high-school & college friends and the people that I worked with in my startups.  We were all at each other’s weddings, brit milah / baby namings and unfortunately a funeral.  We were family.  We ARE family.  I would do anything for these people.  I wrote a large check to one of them for a startup with no product and no real plan.  He was there for me when I needed it.  I sent numerous emails for another for a job opportunity and he is now a senior exec at a very prominent startup.  He’s family and he knows it.

We were in the trenches together.  We fought for every customer together.  Hell – we fought against the VC’s together!  And we all worked on the exit together.  Like many of you, I have many friends and close relationships.  But to anybody who has ever been on the startup battlefield with other people who all stuck in it together I think they’ll likely understand where I’m coming from.  Loyalty in times of adversity separates out your true lifetime friends and colleagues.  And to be clear – I was loyal back.  I think leaders who quit in times of adversity and leave the teams to fend for themselves are no better than employees who quit easily and early.  Quitting would have been the easiest thing for me to do.

I’m not saying that means that all people at startups were treated like family.  If somebody at a startup mistreated you then I understand your not sticking around.  And I’ve already stated that I understand sometimes it makes sense to go elsewhere and learn from new companies and new management.  But if the reason your bailing is simply because somebody has offered you a 20% pay increase, I would ask you to consider the following:

Short-term vs. long-term benefits

Yes, you can always earn more by quitting.  I said this all the time to the employees at my companies.  “I know you can earn more by leaving.  I hope that I can convince you to stay every year by making your resume more valuable in the long-term than the immediate bump to go where the grass is greener.”

Think about me as an example.  I didn’t make retirement money when I sold my first company.  But the firm that funded my first startup was loyal to me for having stuck around in what they knew to be pretty tough times and having suffered much dilution.  They seed funded my second company and even let me buy some IP in exchange for debt to get started.  The people that I brought to my second company all worked at my first company.  I was loyal to this group of people and still am.  I then sold my company to Salesforce.com and did finally make the money I had set out to make the first time.  Our whole team earned good money and every single employee is still employed by Salesforce more than 3 years later.

Each of us could have traded in our jobs at any moment for a pay increase at any time.  I think each and every one of us gained more in the long-run by having stuck with things.  We have all gained both financially and in terms of career progression.

So how did I come to work in the world of venture capital?

That VC who saw me stick through hard times at my first company and get an exit at both companies is the firm where I’m now a partner.  We built a long-term relationship.  I knew my partners for 8 years before joining GRP.  When I called them to say I was thinking about starting a new company they asked if I would consider joining them as a partner.  It is nearly impossible to get a job as a general partner in a VC firm – let alone when you’ve never worked in venture capital.  This came through the long-term commitments that I made years prior.

Again, I’m not trying to rub your nose in it if these aren’t the choices you make.  I’m just trying to convey that sometimes long-term gains come from not making short-term moves that seemingly improve your bottom line and career trajectory.  Make sure that you understand the pro’s / con’s for yourself and at least consider whether there might be longer-term implications for sticking around.

Their is huge value of personal networks in determining your long-term career trajectory.  Mix that into your decision-making pot at the time you make the leap.

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  • http://twitter.com/emerigent/lists/memberships Emeri Gent [Em]

    Response to Mark Essel:

    Mark, digital piles are the hemorrhoids of the human mind, they are apt to bleed our imagination, so I take special care not to let things build up whether that be physical material or stress hormones. The benefits of accumulation is observation but letting things build up is a blockage.

    The idea of “long-term value of loyalty” got me observing Van Gogh's workers in the field pictures this morning and in so doing came across what is said to be his last words: “La tristesse durera toujours” which apparently means that he considered that there would never be an end to sadness, it is translated at http://www.creativestorytellers.com/ as “the sadness will last forever”.

    http://chrisbellinger.wordpress.com/2008/08/30/

    Van Gogh also serves as a story that exemplifies “loyalty”. That he suffered because of others disloyalty including that other painter who ruined his dream of building an artist colony in Southern France, but also in terms of loyalty, which is exemplified by his brother Theo.

    Unfortunately, Theo died at an even younger age than Vincent did and probably with a terrible broken heart – so much for those who say that life and work are one and the same thing. Ideally work and life should be one and the same thing if one has been lucky to both find their calling and also lived a life of relative paradise, but Van Gogh's workers in the field paintings tell us a far different story. It is the same story that exists if we open our eyes to the mindless slavery that can still perpetuate in the modern nature of work.

    It helps me to remove the klondike mindset when thinking about the long-term value of loyalty. I am sure there is much gold in them virtual hills, but that isn't at all the journey that I have set my path towards. It just occurred to me that your initials are [Me] which is what the reversal of [Em] is meant to portray. Whether we live in a literal world or a dynamic world, what peaked my interest in this thread was the opportunity to think about the long-term value of loyalty as it applies or portends to my own life.

    No two life stories are alike even if our mind is designed to associate, cross-pollinate and/or find patterns or fill in the missing blanks (otherwise motion pictures would be viewed as thousands of still pictures rather than as an illusion of reality). However, I also wrote this because the word that triggers in me this expression called “digital piles”, is also a reminder of learning to let things go, to keep things relatively tidy and to enable the imagination so that we are not lost in the avenues of others thoughts or blocked by collecting things, or worse still be collected by others (which is symptomatic of slavery attitudes of old) no matter how beautiful our collection might be :-)

    It is not what we collect that counts but how we arrange and tend to things and keep things in flow. I thought also about how I will manage my Disqus journey and I am thinking of creating a dynamic listing of a “Disqus 360″, lists can be dynamic or linear, if IMHO we are focused on collecting things, we defy the very reality of nature which views both waste as a natural phenomena and renewal as reality. Of course that is the way I look at life, I can also learn much from observing collectors.

    It is ironic also that in seeing two words “digital pile” can lead to creation of a thought piles :-)

    [Em]

  • http://twitter.com/emerigent/lists/memberships Emeri Gent [Em]

    Response to Mark Essel:

    Mark, digital piles are the hemorrhoids of the human mind, they are apt to bleed our imagination, so I take special care not to let things build up whether that be physical material or stress hormones. The benefits of accumulation is observation but letting things build up is a blockage.

    The idea of “long-term value of loyalty” got me observing Van Gogh's workers in the field pictures this morning and in so doing came across what is said to be his last words: “La tristesse durera toujours” which apparently means that he considered that there would never be an end to sadness, it is translated at http://www.creativestorytellers.com/ as “the sadness will last forever”.

    http://chrisbellinger.wordpress.com/2008/08/30/

    Van Gogh also serves as a story that exemplifies “loyalty”. That he suffered because of others disloyalty including that other painter who ruined his dream of building an artist colony in Southern France, but also in terms of loyalty, which is exemplified by his brother Theo.

    Unfortunately, Theo died at an even younger age than Vincent did and probably with a terrible broken heart – so much for those who say that life and work are one and the same thing. Ideally work and life should be one and the same thing if one has been lucky to both find their calling and also lived a life of relative paradise, but Van Gogh's workers in the field paintings tell us a far different story. It is the same story that exists if we open our eyes to the mindless slavery that can still perpetuate in the modern nature of work.

    It helps me to remove the klondike mindset when thinking about the long-term value of loyalty. I am sure there is much gold in them virtual hills, but that isn't at all the journey that I have set my path towards. It just occurred to me that your initials are [Me] which is what the reversal of [Em] is meant to portray. Whether we live in a literal world or a dynamic world, what peaked my interest in this thread was the opportunity to think about the long-term value of loyalty as it applies or portends to my own life.

    No two life stories are alike even if our mind is designed to associate, cross-pollinate and/or find patterns or fill in the missing blanks (otherwise motion pictures would be viewed as thousands of still pictures rather than as an illusion of reality). However, I also wrote this because the word that triggers in me this expression called “digital piles”, is also a reminder of learning to let things go, to keep things relatively tidy and to enable the imagination so that we are not lost in the avenues of others thoughts or blocked by collecting things, or worse still be collected by others (which is symptomatic of slavery attitudes of old) no matter how beautiful our collection might be :-)

    It is not what we collect that counts but how we arrange and tend to things and keep things in flow. I thought also about how I will manage my Disqus journey and I am thinking of creating a dynamic listing of a “Disqus 360″, lists can be dynamic or linear, if IMHO we are focused on collecting things, we defy the very reality of nature which views both waste as a natural phenomena and renewal as reality. Of course that is the way I look at life, I can also learn much from observing collectors.

    It is ironic also that in seeing two words “digital pile” can lead to creation of a thought piles :-)

    [Em]

  • http://twitter.com/soyelmango soyelmango

    It's a fair generalization to say that corporations are disloyal with their staff – and of course, generalizations smooth over the corporations that are loyal.

    However, consider _who_ in the corporation is being [dis]loyal and why. In my limited experience, I've known of managers who are loyal despite the pressures from higher management. I've vehemently disliked a manager for making colleagues redundant, and then found that when it's my turn, she's advising me how to play my cards to stay safe – it's evident that she's loyal to her staff but that there are pressures from above.
    Implicit in what Mark writes is the fact that when the sh!t hits the corporate fan, it's ultimately loyalty on the personal level that counts.

    I don't mean to discredit what you say – there are people out for themselves who give corporations the 'diseased thinking' reputation, though there are also good people who'll stick by you. The challenge is to know who's who!

  • stephenhau

    It's a fair generalization to say that corporations are disloyal with their staff – and of course, generalizations smooth over the corporations that are loyal.

    However, consider _who_ in the corporation is being [dis]loyal and why.
    Implicit in what Mark writes is the fact that when the sh!t hits the corporate fan, it's ultimately loyalty on the personal level that counts.

    I don't mean to discredit what you say – there are people out for themselves who give corporations the 'diseased thinking' reputation, though there are also good people who'll stick by you. The challenge is to know who's who!

  • http://www.exitmultiple.com George Allen

    Not sure why you apologize. when Napoleon was asked how he picked his generals, he replied: I pick the lucky ones… or so they say.

    I liked your original post and it reminded me of the napoleon quote. business is war. Unfortunately the original post by JC is more about his own personal Waterloo than anything else. keep up the good work.

  • http://www.exitmultiple.com George Allen

    Not sure why you apologize. when Napoleon was asked how he picked his generals, he replied: I pick the lucky ones… or so they say.

    I liked your original post and it reminded me of the napoleon quote. business is war. Unfortunately the original post by JC is more about his own personal Waterloo than anything else. keep up the good work.

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  • garydpdx

    Mark, I agree with nearly all your criteria against job hoppers, taking into account age, the economy (recession), circumstances, etc. Maybe more people should calm down and read your blog pieces thoroughly first …

    That said, with the (hopefully passed) Great Recession, a lot of people will have endured wage stagnation or cuts at jobs that they were 'lucky to have' or be hired into new jobs at lower pay, lower rank. A lot of people are taking jobs out of necessity, for lack of an alternative. If the 'new normal' turns out to be a bit better than what is expected in a long, slow recovery then I can see some, even quite a lot of churn in the next 2-3 years. Jumping for 5% in the 'short term' will be balanced against staying for less in the same old, same old for most people with no greater expectation of security.

  • garydpdx

    Mark, I agree with nearly all your criteria against job hoppers, taking into account age, the economy (recession), circumstances, etc. Maybe more people should calm down and read your blog pieces thoroughly first …

    That said, with the (hopefully passed) Great Recession, a lot of people will have endured wage stagnation or cuts at jobs that they were 'lucky to have' or be hired into new jobs at lower pay, lower rank. A lot of people are taking jobs out of necessity, for lack of an alternative. If the 'new normal' turns out to be a bit better than what is expected in a long, slow recovery then I can see some, even quite a lot of churn in the next 2-3 years. Jumping for 5% in the 'short term' will be balanced against staying for less in the same old, same old for most people with no greater expectation of security.

  • garydpdx

    Yes, Erin, there can be good reasons to make the 'jump'. Even people who have not done so in the course of their careers, may be faced with the prospect of doing so as we recover from the Great Recession. People who have been able to keep their jobs at the cost of stagnant or reduced wages, and likely lost benefits, or those who have taken jobs at lower pay, lower rank, will be looking for a positive change. While financial reasons will be compelling, the opportunity for growth will make it overwhelming!

  • garydpdx

    Yes, Erin, there can be good reasons to make the 'jump'. Even people who have not done so in the course of their careers, may be faced with the prospect of doing so as we recover from the Great Recession. People who have been able to keep their jobs at the cost of stagnant or reduced wages, and likely lost benefits, or those who have taken jobs at lower pay, lower rank, will be looking for a positive change. While financial reasons will be compelling, the opportunity for growth will make it overwhelming!

  • mlee

    Loyalty is a two-way street. You show loyalty to get loyalty. And you can't be selective – you need to show loyalty to everyone – except those who betray your trust. This is extremely hard for an employer to do in reality. Having been through no fewer than 6 rounds of layoffs in 10 years… having seen sobbing in bathrooms and a father laid off the day before his baby was born… I haven't seen a lot of loyalty in the workplace during my career.

    The problem with all of this is that most employment is at-will, employers can and do fail, and stability and growth have never been less sure than they are today. Employees are skittish, they are trying to protect their homes and familes… all this conspires to keep loyalty at bay for the near term.

    I find it interesting that this conversation is coming up in the midst of a massive recession, at a time when many of us lowly employee-types have become job hoppers by no choice of our own, at a time where the feeling of opportunity and possibility has never been lower.

    I don't live in Silicon Valley and there are no internet startups here that I would want to work for. I have a wife, house, and children so I can't devote my entire life to a company anymore. I've moved around by choice and been forced to move around as well, I'm sure Mark would have seen my resume and trashed it too, but that's OK, thankfully there's other employers who aren't as picky. Although my goal is always to stay with a company for the long-term, I am not looking for a family and have no expectation of that type of relationship with my employer.

  • mlee

    Loyalty is a two-way street. You show loyalty to get loyalty. And you can't be selective – you need to show loyalty to everyone – except those who betray your trust. This is extremely hard for an employer to do in reality. Having been through no fewer than 6 rounds of layoffs in 10 years… having seen sobbing in bathrooms and a father laid off the day before his baby was born… I haven't seen a lot of loyalty in the workplace during my career.

    The problem with all of this is that most employment is at-will, employers can and do fail, and stability and growth have never been less sure than they are today. Employees are skittish, they are trying to protect their homes and familes… all this conspires to keep loyalty at bay for the near term.

    I find it interesting that this conversation is coming up in the midst of a massive recession, at a time when many of us lowly employee-types have become job hoppers by no choice of our own, at a time where the feeling of opportunity and possibility has never been lower.

    I don't live in Silicon Valley and there are no internet startups here that I would want to work for. I have a wife, house, and children so I can't devote my entire life to a company anymore. I've moved around by choice and been forced to move around as well, I'm sure Mark would have seen my resume and trashed it too, but that's OK, thankfully there's other employers who aren't as picky. Although my goal is always to stay with a company for the long-term, I am not looking for a family and have no expectation of that type of relationship with my employer.

  • http://www.dennis-yu.com dennis yu

    Amazingly good insight on job loyalty– I wish I had read this earlier, since it would have saved me a lot of money in hiring.

  • http://www.dennis-yu.com dennis yu

    Amazingly good insight on job loyalty– I wish I had read this earlier, since it would have saved me a lot of money in hiring.

  • http://www.dennis-yu.com dennis yu

    Amazingly good insight on job loyalty– I wish I had read this earlier, since it would have saved me a lot of money in hiring.

  • http://www.dennis-yu.com dennis yu

    Amazingly good insight on job loyalty– I wish I had read this earlier, since it would have saved me a lot of money in hiring.