Management Human and Social Capital Analysis

 “Johan, you are going to take an 80% pay cut and lose supervisory authority.” It should have been demotivating. However, switching from a stable, well-paid private equity (PE) role with Odysseus Capital to the pre-MBA internship with Stefan, CEO of tech startup Indigo, boosted my engagement despite reduced pay and support.

1. What the new job delivered vs. the old job (Self-Concordance & McClelland’s Needs Theory)

It is easy to attribute this counterintuitive experience to self-concordance theory. Whereas I was previously motivated by external rewards in a PE role that did not fit my interests, I was now pursuing my intrinsic (and identified) motivations such as my interests and core values, and those far outweighed the extrinsic rewards that were lost. However, Odysseus Capital also addressed motivations that enhanced my subjective well-being. In Figure 1, a Likert mapping of my personal strivings for intrinsic (and identified) motivations in the Odysseus and Indigo roles matches comparably.

McClelland’s Theory of Needs better characterizes my sentiment toward the two roles. Stefan sold me a dream of achieving new, impressive things. There was no supervisory authority but direct reporting to the CEO offered more power than my last role. Additionally, a highly collegial environment made me feel affiliated to something bigger than myself. A side-by-side comparison of Odysseus to Indigo on needs fulfilment is presented in Figure 2.

Mapping where I fit in McClelland’s Theory of Needs, the Odysseus role addressed some needs but Indigo fit better. Affiliation is the most stark example. At Odysseus, colleagues rarely met outside of the office aside from mandatory monthly pub nights. Additionally, at Odysseus, a resignation led to me being supervised by two new directors who had distinct social beliefs. Based on comments that one director made, I felt that I could not be open about my life. That reduced my affiliation and made me closed. I could not put my heart into the work as I had in other roles. At Indigo, the difference was stark. Colleagues shared everything, and it contributed to a trusting culture.

Indigo offered much higher job satisfaction. It required working on tasks where I had very little experience. I valued the sense of achievement this brought, and worked to overcome the inefficiency of being new.

2. Was the old job structured differently from the new job? (Taylorism vs. Job Design)

The Indigo role was also motivating because of job design. Frederick Taylor and his Principles of Scientific Management would advocate that I work in finance at Indigo. This was the most efficient task given my prior experience and the benefits from having a narrow focus. Taylorism would have had a one-size approach to the role. My compensation could have been based on Excel volume produced. I would have delivered a more efficient performance earlier at Indigo, but at the expense of job satisfaction. Instead, I worked on marketing and product at Indigo, tasks I had never done before. Stefan took into account my social motives when allocating work.

Stefan made sure that core job characteristics led to positive psychological states and beneficial outcomes. Rotating between marketing and product built skill variety. Enlarging the role’s scope to encompass unsupervised interactions with outside firms built up autonomy, task identity, and significance. Enriching the role with challenges and providing routine feedback made the role engaging. These qualities map well to Hackman & Oldham’s Theory of Job Design. Further, they provided meaningfulness, responsibility, and a sense of engagement that few other roles offer. This engagement contributed to high motivation, pushing me to perform better.

The Odysseus role was almost the opposite. A side-by-side comparison of Taylorism and Job Design as illustrated by my Indigo and Odysseus roles is presented in Figure 3. At Odysseus, when I deviated from the core task into marketing, I was given a verbal reprimand. Taylorism was acceptable at the start of my career when I was trying to develop areas of expertise, but I believe it is stifling later in your career. However, Taylorism drove a very efficient work culture that allowed me to deliver early results, but employee turnover was high.

3. How did the new job balance efficiency with job design? (kanban)

Job design made Indigo more enjoyable but less efficient. Regularly, I was performing roles where I had little experience. Indigo’s version of the kanban system saved significant time by keeping my goals prioritized as outlined in Figure 4. This meant limiting the number of projects that I was working on at a given time, and monitoring these projects. At Odysseus, there was little hesitation to spend extra time on something adding little value. The opposite philosophy held at Indigo. At Odysseus, if a mistake was made, people were fired. This incentivized heavy analysis for even the most basic questions.

At Indigo, when marketing or product asked for a piece of work from me, Stefan insisted that it be added to the kanban diagram at the center of the office, which mapped out all of our projects. Stefan told me that I could work on two of the projects but not a third until one of the others was done. I felt that I had time to do more. Stefan explained to me that not only would I be overextended, but I would be violating the company’s culture. At Indigo there was little incentive to be 100% right. Delivering the most value in the least amount of time was key. By ruthlessly prioritizing, Indigo kept employee happiness high and delivered quality work outputs. This rigorous but simple means of keeping workflow prioritized meant that despite inefficiencies inherent in job design, Indigo maximized my value delivery.