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External vs Internal Career Equity
In 2012 Marissa Mayer left Google to become the CEO of Yahoo!, and the youngest ever CEO of a Fortune 500 public traded company (at the time. Since surpassed by Mark Zuckerburg). Some of the accomplishments at Google (summarized from Wikipedia) seem very impressive:
20th employee and first female engineer
She oversaw the layout of Google's search homepage.
She was also on the three-person team responsible for Google AdWords
Mayer started the Associate Product Manager (APM) program, a Google mentorship initiative to recruit new talents and cultivate them for leadership roles (Each year, Mayer selected a number of junior employees for the two-year program, where they took on extracurricular assignments and intensive evening classes)
In 2005, Mayer became Vice President of Search Products and User Experience [playing key roles in] Google Search, Google Images, Google News, Google Maps, Google Books, Google Product Search, Google Toolbar, iGoogle, and Gmail.
Mayer was the vice president of Google Search Products and User Experience
[In 2010] she was asked by then-CEO Eric Schmidt to head the Local, Maps, and Location Services.
In 2011, she secured Google's acquisition of survey site Zagat for $125 million.
What’s not included in that list was that she was on the cover of many many magazines as the face of Goog'le’s progressiveness — an example of a woman (and an engineer!) at the highest executive levels of the search engine company.
When Marissa was made CEO of Yahoo I remember the general reaction from most of my colleagues and friends was “why would she take that job? Yahoo is a disaster!” (Even back in 2012 this was true). But it was still allowing her to be the youngest Fortune 500 CEO ever, with compensation of roughly $60mm, with additional upside — “one of the highest every awarded to a woman” (according to ABC news). That would be a hard opportunity for anyone to turn down.
But I had a few friends who were not surprised. A few friends who worked at Google who told me Marissa’s INTERNAL reputation was not as strong as her EXTERNAL reputation. Internally she was (apparently, according to these friends) thought of as a prima donna who was not particularly good at her job.
Any positive thing you do while working will add to your “career equity”. Many of those things are valuable both within your company and also set you up for your next job outside your company — leading a big project, delivering on objectives, successfully overseeing a big team. Some things will add to your internal career equity without helping you in the external job market (at least not directly) — understanding internal software, building relationships with your peers across the organization, completing a management rotation program, etc. Other things will increase your external career equity without helping you internally — writing a successful newsletter about your space, getting public relations mentions, speaking at conferences, etc.
Marissa clearly had incredibly high external career equity. What my friends were saying was that her internal career equity at Google was not so high. That is an excellent time to switch to a new company! Further advancement at Google was more going to be more difficult than leveraging her reputation to get a CEO job at the biggest competitor.
There is a lesson here for all readers, regardless of seniority: In order to advance your career you will want to improve both your internal AND external career equity. Your relative success on those two metrics will help determine where your next career step should go. It does NOT mean that one type of equity is better than the other. In the Marissa example it may seem that “external equity is superficial and internal equity is real”, but there are lots of ways you can drive internal equity through playing politics and lots of ways you can drive external equity by demonstrating true excellence.
It does lead to two conclusions:
If you have a choice between doing something that drives internal OR external equity vs something that drives both at the same time, the latter is more likely to be advantageous to your career (all things equal)
Some people are more naturally gifted in developing one type of career equity. Understanding which you are can be helpful in how you think about your career. No matter where your bias is you will likely want to ensure you compensate for it to some degree to keep your options open, but don’t let that compensation blind you to where your next career step is LIKELY to come from
This essay was inspired by a link shared in The Diff (paywalled):
After hiring its new CEO, Linda Yaccarino, Twitter has been removed from media buyer GroupM's list of high-risk ad venues ($, FT). This kind of thing has happened before: when Zoom had some security issues in early 2020, they responded by hiring Alex Stamos, who had left two companies (Yahoo and Facebook) because their security policies weren't up to his standards. When a company has a reputational problem, it's partly a problem of uncertainty: even if there's, say, a 10% risk that they're as bad as the worst-case scenario implies, big buyers are not in the business of underwriting that risk. So one thing companies can do is essentially combine credible external due diligence with incentive alignment, by hiring someone who has a lot to gain if the risks are overblown and more to lose if they're not.
In those examples the external career equity of Linda and Alex were the specific reason they were hired — their internal equity itself was what the companies needed internally.
More on this for premium subscribers tomorrow.
Keep it simple,
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