Your business value

You should always generate more value than the perks the company puts on the table.

When you start a new job, on day 1 you're generating very small value for the business in terms of solving problems that generates revenue.

Regardless, you are paid your full salary.

The company is taking a bet on you. 💸 The hope is that at some point you generate more value than the salary, perks, and other expenses: workspace, computer, internet, coffee, etc.

You should always aim to generate more value than those costs.

That's how business can afford to keep you. There are exceptions to this model but spoiler alert: it's politics and evil stuff, as we’ll get to.

This post is part 1 of a small series that explores this mental model with a follow up that talks about how to take advantage of this fact to optimize your career growth so that you're always generating more value by accelerating your growth, learning, and compensation.

Since I've applied this strategy, my salary has tripled and I went up the ladder, so I truly believe in this mental model at an individual level despite being difficult to quantify: Value > Cost

🤖🚫 No generative AI was used to create this content. This page is only intended for human consumption and is NOT allowed to be used for machine training including but not limited to LLMs. Copyright (C) 2025 Alex Ewerlöf. All rights reserved. (why?)

Start from zero

When you start a new job, your contribution to the company productivity is zero: you are setting up your computer, get access, install software, get to know the team, read the documentation, etc.

You are usually not solving problems that helps the business make money on day one.

Since day 1, you’re building your T-POP:

• Technology: learn how the tech and tools work, what’s the architecture and system topology, …

• People: get to know who is who, org structure, culture, facts, beliefs, assumptions, …

• Operation: learn the ways of working and how the company operates, processes, protocols, …

• Product: get an understanding of the problems that the business solves and your role in the big picture

T-POP

As you onboard, the collective productivity may take a hit because others have to spend time onboarding you instead of doing their regular work and create value for the customers. But let’s stick with zero for now. 😄

For the sake of simplicity let’s skip the discussion about how to measure productivity because as we’ll see, that discussion is not very relevant to our discussion. As much as I hate diagrams without actual numbers, let’s focus on the curves and key points.

If you have a fixed salary like most people, your day 1 compensation isn’t different than your day 30! The company pays you for your potential:

Your company made a bet on you. They hope that as time passes, your contributions will surpass the perks they put on the table:

Your contributions to the company should ALWAYS be above the salary, perks, and other costs (e.g. computer, phone, workspace, coffee, internet, travel expenses, management overhead, etc.)

That’s why the company can afford to keep you!

A couple of points:

1. It’s hard to measure productivity.

2. It’s even harder to measure individual productivity due to interdependencies. In reality, companies make a profit from the collective effort of their employees (and bots, and AI agents, if you’re reading this in the future 🤖😄). It helps to take an honest look at your contributions from time to time and self-assess how much of the business revenue is due to you and whether you’re actually working your worth.

3. It’s impossible to put a number on human beings. Especially using the word “loss” or “cost” may throw some people off. Businesswise:
   productivity = output / input

4. Regardless, the argument holds true because companies are legal entities. Regardless of the compassion and empathy of leadership, at the end of the day (or quarter) a company is an efficiency machine that optimizes for profit and is motivated by growth.

5. Companies or individuals who ignore reality, will get punished by going bankrupt or getting fired when there’s no more money left to burn.

"Year" is not a unit of measurement for experience

Raise

Over a long period of time, your productivity gradually increases. You may get part of that extra contribution back in the form of a compensation bump:

As optimization machines, the company isn’t motivated to give that bump voluntarily. 2 conditions need to be met:

1. The cost of losing you is higher than keeping you. i.e., there’s reasonable risk to believe that the compensation bump is an investment —something that the business can relate to.

2. Your contribution to elevate the productivity level is assessable. Whether humans do the assessment or some bot, visibility of your work plays an important role in whether you get the bump or not. We’ll talk more about visibility later.

Unfortunately, some employees choose to hoard knowledge to use it as a leverage. While it typically works, it has severe implications for your experience growth. In the follow up article we’ll talk about alternatives to this strategy.

S-curve

Growth usually follows a S-curve. The S-curve takes different time for different people.

Companies usually have a deadline for the bet they take: that’s why there is a probation period:

• Person A had a quick onboarding (maybe because their T-POP is already high because they know the tech, people, operation, and/or product.

• Person C barely made it (possibly due to bad onboarding, or the need to unlearn what they already know in order to learn to be productive at the new job).

• Person D unfortunately didn’t make it. Just a reminder that your work performance and productivity has nothing to do with you as a person. A great person may suffer from poor performance due to a plethora of reasons: environment mismatch, poor leadership, bad onboarding, biases like horn effect, gender/age/ethnic discrimination, etc. Maybe with more time and support person D would have made it, but there’s nothing in the formal definition of a company that requires that. It would be nice but it’s not a legal requirement.

Companies rather fire someone that performs below expectations. Later we’ll talk about an important nuance: the perception of productivity.

Although very rare, but some people objectively hurt the collective productivity of the company like person E here:

For example, if person E has a leadership position, they can hurt the productivity of an entire organization. That’s because leadership acts as a force multiplier and if the force is negative, they can cause a lot of damage before the company notices and gets rid of them.

Will person E be fired immediately? Not necessarily.

That’s because when the company itself is led by incompetent leaders, the appearance of productivity is as payable as actual productivity.

Why does person E do that?

1. Efficiency: Humans, as part of nature, seek efficiency: almost everyone wants to maximize pay for minimal effort. In other words if it’s possible, some people eventually end up doing it. People usually have a hard time walking away from a well-paid position even if it’s above their capacity.

2. Dunning-Kruger effect: person E may genuinely be unaware of their damage. The Dunning-Kruger effect is a cognitive bias where people with limited knowledge or expertise in a given domain tend to overestimate their own competence, while those with high expertise tend to underestimate their abilities relative to others.

3. Measuring productivity is hard: There are biases at play but not everything is quantifiable to a neat diagram like the ones in this article.

4. Perception: Incompetent managers don’t have a way to tell the difference between real work and fake work. These are the same leaders who confuse confidence for competence and eloquence for substance.

This is particularly common with organizations with high DTT (distance to top). Unproductive employees hide in the cracks of tall silos with thick walls. We’ve covered that concept along with Vertical and Horizontal Organizational Distance (VOD/HOD) in another article:

VOD

Perception of productivity

As you saw with person E, the perception of productivity is important in the context of assessing the bet the company has made and people who evaluate that bet.

The opposite of person E is someone who is too busy doing the work to care whether it is acknowledged.

Sadly, this is way more common than person E. Look at person F:

A few years ago, I learned about “internal marketing” which is exactly what it sounds: if you’re doing the work, make sure that it’s also noticed, especially if you have long term plans to stay at the company.

Regardless if you want to stay or not, it helps to get noticed for the value you generate so that you can be in control of your career and it doesn’t end prematurely.

There are many tools for internal marketing which is the topic of another article:

• Demos: show what you’ve done (can be consumed async as a video recording for example)

• Mentoring: helping grow others can spreads the word about your skills

• Weekly reporting up: to keep you manager close and in the loop so they can fight for you when needed

• Dotted reporting lines: key people across the org that you meet regularly

• Asking for a skip level: meeting people with VOD > 1

• Write-up: documents travel far wider than F2F meetings. Blogging is an example but even internal documents work well.

• Anything else you want to add to this list?

It’s important not to overdue it because it may backfire and come across as you don’t have anything better to do than being your own personal cheerleader.

Market shrink

It doesn’t matter how efficient you are at your job, if it’s not also effectively helping the company to solve customer’s problems.

Companies don’t operate in vacuum:

• There needs to a market to monetize

• Customers who are willing to pay for the solution

• And a fit between customer needs at the price point they’re willing to pay

Then there’s competition and paradigm shifts that deprecate entire lines of business.

Based on the visuals we have built so far, your productivity in the scope of what the company can monetize looks like this:

Examples:

• The business model gets deprecated: The company is in the business of renting DVDs and Netflix happens before the business had the chance to adapt to market demand.

• Your services are irrelevant: You’re a SEO expert and suddenly AI can do it, plus search engines lose market to LLM-powered searches.

• Your services aren’t required: Someone more skilled (or more connected) is hired and they take over your responsibilities, making you redundant.

Quiet Quitting

Quiet quitting is when an employee does the minimum requirements of the job to keep it. There can be many reasons:

• Demoralization or demotivation (e.g. due to bad culture)

• Boredom or sickness (e.g. burning out)

• Losing confidence in one’s ability to find a more fulfilling job, knowledge hoarding, getting too comfortable with what you know and failing to continuously learn, etc.

• Lack of trust: you’re not sure that the leadership is taking the company to the right place, you don’t believe in the value of the business model to the society, you don’t trust your colleagues are pulling your weight, etc.

• Any other reason that leads to someone intentionally reducing their productivity level dangerously low

Quiet Firing

This is a sad phenomenon: a productive person is forced into a situation where their productivity is less than their capability.

There’s often malice and politics at play. However, it’s fearful malice because instead of flat out firing the person, they are stripped away from power, knowledge, and opportunity to make an impact.

There may be many reasons for this:

• You’re too good at your job and despite benefiting the business, this also comes across as a threat to poor performers (remember person E?)

• You do your job fine, but you also have “extra deliveries” like speaking up your mind which over time can create powerful enemies that want to get rid of you (remember the story of Emperor’s New Clothes?)

• Your seat is smaller than you, so while doing your job, you accidentally step on other peoples toes, and as a territorial species, it activates the fight response in some people. If you keep doing it long enough (or to enough powerful people), you may gradually be “managed out” (instead of giving constructive feedback, or providing an environment where your full potential can contribute to the business).

• The cost of firing you is higher than keeping you until you voluntarily leave. This is the case when there’s no legal ground for firing you and there’s a high risk that you can sue your employer or damage their reputation if you’re fired.

There are many ways to quietly fire someone:

• Exclude them from the room where the key discussions are held. If knowledge is power. Lack of knowledge reduces power.

• Give them sh*ty assignments. Bore them to death so they pick up whatever is left of their dignity and quit.

• As part of a reorg, reduce their responsibilities. Ambitious people want to fly. Cut their wings and they’ll walk out.

Quiet Hiring

With the end of ZIRP (zero interest rate), many companies went to efficiency-mode. Previously we’ve covered layoffs and used Spotify as an example:

What can we learn from Spotify layoffs?

TLDR; layoff is a last resort when business loses its short term perspective to monetize the human capital it has accumulated.

Layoff is sad for those who leave but it’s even more frustrating for those who remain! Not only every layoff open’s people’s eyes to the reality of the profit equation and diminishes trust in leadership, but it also gives them extra work.

In order to reduce cost of operation, companies add more tasks to the shoulders of the remaining employees without adequate compensation:

This is a great growth opportunity for sure: you get to learn more by doing more, but it can also easily lead to burn out and destroying work/life balance with long lasting consequences.

If that’s happening to you, start looking for alternatives and build options. Options put you in power over your destiny. As soon as the learning curve is flattening you know it’s time to jump ship. The flipside is that now the business has a wider chair to fill: probably you’ll leave a sofa behind! 😄

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