Smart people are leaving high paying jobs, without a backup, and often without a concrete plan. What does this tell about our work culture?
Welcome to Plain Sight by Wyzr, where we bring hidden patterns into plain sight. Every week, we explore stories and ideas that help us understand why we are the way we are.
Why are smart people leaving jobs?
In the last couple of years, I’ve been pleasantly surprised by the number of people in my extended circle who have quit their jobs without a backup. Most are in their early to mid 30s, have worked for reputed organizations, possess strong academic credentials, and are generally very smart. Yet, many of them are almost strategically without an income stream.
This phenomenon can be partially attributed to the large number of layoffs many companies undertook. But even outside of that, I have friends who have chosen to stay unemployed.
My co-founder, Utkarsh, for instance, spent over a year on an extended break, largely recovering from the endless hustle he had been on for almost eleven years, before deciding to do something that satisfied his need for high-quality work, autonomy, the chance to make tremendous impact, and also get meaningful compensation in the process. He is a graduate of BITS Pilani and IIM Ahmedabad, and had worked with Credit Suisse, Parthenon, and Apna in high-impact roles. Options were not a problem, but the right opportunities that aligned with his life goals were. Luckily, we ended up talking at the right time and are now building Wyzr together.
Like Utkarsh, there are many more who are on a similar path. A friend who led product marketing for a top Indian SaaS firm is serving his notice period to take a year off and experiment with a business idea around staycations and workations. Another friend with a highly pedigreed background has quit his corporate career for good and become a freelance business writer. Another quit her coveted marketing job at P&G a couple of years ago to work on her book and freelanced as a marketing professional alongside it, before taking up a new full-time role that she loves.
I’m probably more exposed to such individuals than a layperson, but I doubt this phenomenon was rampant five years ago. So I tried to analyze what really is happening, why it’s happening, and who stands to benefit the most from this mini-revolution of sorts.
Do employees want to work?
If left to themselves, will employees really work, or will they just horse around? The answer, as the cliche goes, is that it depends. But some of the outcomes of employees left free to wander may surprise you.
Not many people know that Google News was created by an Indian-origin scientist named Krishna Bharat. Interestingly, he hadn’t been asked by Google to do it. It wasn’t the outcome of a formally assigned project, but was actually the result of a policy that deliberately set people free.
Back in the day, Google had this “20% time” policy where people were allowed to work on projects of their interest for 20% of the time they spent at work. So out of the five official working days in a week, employees could effectively dedicate an entire day to these projects, which need not be part of their day-to-day responsibilities.
Krishna was frustrated by the difficulty of finding news stories online, so he used his 20% time to develop an algorithm that could aggregate news from diverse sources and group similar stories together. What started as a personal project was launched as Google News in 2002 and today serves billions of users across more than 70 countries and 40 languages.
And not just Google News, even Gmail, GTalk, Google Sky, AdSense, and Google Translate were all products of the same policy. It’s said that over half of Google’s new offerings are built during this period of pure autonomy, where people are set free to innovate.
Along similar lines, software behemoth Atlassian runs a now-famous initiative called “ShipIt Days”. These are 24-hour innovation periods held quarterly where Atlassian employees can work on any project of their choosing. The only requirements are that:
- The project must be related to Atlassian products or the company in some way
- Employees must demonstrate what they’ve built at the end of the period
- The entire project must be conceived, developed, and presented within the 24-hour timeframe
Originally called “FedEx Days” (because participants had to “deliver overnight”), these events allow employees to step away from their regular responsibilities and pursue creative ideas, explore solutions to problems they’ve identified, or experiment with new features.
Many notable Atlassian product features have emerged from ShipIt Days, including improvements to Confluence, JIRA workflow enhancements, and internal tools that improve company operations. The initiative has been so successful that Atlassian has published resources to help other companies implement similar programs.
The success of such initiatives at Google and then at Atlassian inspired many others to adopt similar policies, including LinkedIn, Apple, and 3M, all of whom saw encouraging results.
The success of these projects, and thereby the respective companies’, was only possible because employees genuinely wanted to work and contribute. They were not coaxed into it. They had a clear option of not working on these projects. But they did.
It’s because most smart employees don’t want to sit idly. When people crave “work-life balance”, it’s often viewed as wanting to work less while continuing to earn the same amount. In reality, it’s more about working in a manner that accords them a sense of freedom and control, and allows them to use their skills to make real impact.
That’s when magic happens, and if you can get paid handsomely, it’s the perfect recipe for an ultra-productive organization. At least that’s what Netflix seems to believe.
How Netflix attracts and keeps the smartest
Among all the companies, Netflix has perhaps documented its culture the best. In the book ‘No Rules Rules’, Reed Hastings and Erin Meyers explain how Netflix keeps the smartest people on its roster, and why their approach may not suit everyone.
While the book explains it in admirable detail, I want to highlight the three key cultural themes that set Netflix apart.
- Talent density - Netflix hires only the most talented individuals for creative and strategic roles. They explicitly aim to pay each employee more than they could make anywhere else, often significantly above industry standards. Managers continually evaluate whether they would fight to keep each team member if that person received an offer elsewhere. If not, the company provides a generous severance package and replaces them with someone extraordinary. Mediocrity is not an option.
- Maximum freedom - With the right people in place, Netflix then systematically eliminates rules that might constrain employee judgment. It includes removal of any vacation policy, any travel or expense policies (”Act in Netflix’s best interest” is their guideline), approval processes, formal annual reviews, and any mandatory processes before developing ideas. This removal of controls frees cognitive bandwidth for creative work and signals profound trust in employee judgment.
- High accountability - Having the smartest people, paying them handsomely, and setting them free doesn’t come without strings attached. Unlike most organizations, where merely meeting expectations is sufficient, Netflix expects excellence and innovation. If you are not moving the needle despite being given everything that a supposedly intelligent person can seek, you are not the right fit, and you should thus make way for someone more promising.
It’s not hard to see why such a system would work well for the smart, self-driven, responsible folks, and won’t for the ones who like to cut corners. You can’t pay a mediocre performer the top of the market salary. You can’t give complete freedom to a mediocre person and expect them to not take undue advantage. And obviously, you can’t expect a mediocre person to perform anything better than average.
Netflix gives its employees full autonomy. But it also knows that it can be best handled only by smart, responsible people.
What most companies get wrong
It turns out that autonomy is something all employees crave. It was elaborated elegantly in a theory proposed by psychologists Edward Deci and Richard Ryan.
Self Determination Theory (SDT), developed by Deci and Ryan, suggests that people are motivated by three fundamental psychological needs: autonomy, competence, and relatedness.
When people feel they have control over their actions (autonomy), can effectively handle challenges (competence), and feel connected to others (relatedness), they become intrinsically motivated.
This intrinsic motivation - doing something because it’s inherently satisfying rather than for external rewards - leads to better performance, greater creativity, and higher job satisfaction.
It explains why traditional carrot-and-stick approaches to motivation often fail, especially with skilled professionals.
It’s a common practice, particularly in our IT sector and across many traditional companies, to enforce spending a mandatory number of hours in the office. I know people who have to abide by it even if their entire team sits in another country. One such friend went to office on the 31st of December, not because he had to get important work done, but because not going would mean it would be counted as a leave by the company. Everyone on his team, meanwhile, was sleeping in different parts of America while he bided his time in the office and texted me his unfiltered thoughts about his employer.
When organizations try to control behavior through rigid policies, strict monitoring, or even purely monetary incentives, they inadvertently suppress the fundamental psychological need of genuinely wanting to do well. When you’re evaluated on the time you spend in the office rather than the impact you create, the inherent desire to deliver beyond expectations is killed.
Executives at large companies argue that at a large scale, you need such measures to ensure uniformity and keep people in check. But such policies are meant to extract whatever they can from the mediocre performers doing operational tasks. Such methods worked well in the industrial era when workers were needed to put in a certain number of hours in the factories, so it would ensure a basic minimum output. But unlike those jobs, the creativity quotient of all white collar jobs in today’s information age is much higher.
When smart people are put in a system full of controls and processes, it stifles their creative potential, and they feel suffocated. They either wrestle out of it and move to some other place that values their creativity, or they themselves become mediocre to adhere to the norms. This brings me to something that David Packard (of Hewlett-Packard) very nicely articulated about the importance of keeping the right people in the right positions.
Packard’s Law states:
No company can consistently grow revenues faster than its ability to get enough of the right people to implement that growth.
Breaking Packard’s Law essentially means that you first fill some key seats with the wrong people. They don’t perform well, and to compensate for their incompetence, you establish rules and policies to extract the minimum out of these slackers. And since these are company wide rules, they naturally get applied to even the smarter ones.
The bureaucracy drives away the right people because they need autonomy to do their best work. This then attracts more of the wrong people, which necessitates more bureaucracy to keep them in check, and mediocrity spreads like cancer.
In startups, if you have sufficient funds, it’s easier to fill all the key roles with the right people. But as they grow, the probability of violating Packard’s Law increases. That’s why, so often, it seems that large companies hire smart people and force them to be stupid.
If you look at the most efficient, high-revenue-per-employee organisations (Apple, Meta, Google, etc.), it’s not just that their products are great, but they also adhere to Packard’s Law, which allows the right people to build these great products.
Who wins in the end?
It’s a massive understatement to say that the smartest people have an outsized impact on organizations’ performance.
A study found that if the “complexity” of the job in question is considered very high, top performers are about 800% more productive than the average ones! This roughly means that for a task an average performer would take 9 hours to do, a top performer would need just 1.
This was first found in a survey of over 600,000 researchers, entertainers, athletes, and politicians, and then corroborated by McKinsey in an extensive study of business professionals.
While the real world experience will vary for everyone, I have no doubt that a few top folks are worth way more than many mediocre ones. I’ve seen small teams comprising brilliant individuals ship products much faster to market and negate early-mover advantages of competitors.
It’s also important to realize that even though top talent may be 800% more productive than the mediocre ones, they’re rarely paid 9x of what their mediocre counterparts get. Mathematically, even if they’re a few times costlier to the company, the RoI they can generate is much higher than what an average performer would.
Bottom line:
Hire a few, but hire the best and keep them, even if they appear costly.
But then, many large organizations are generously letting the smart ones quit. And as I wrote about it in the beginning, many are quitting without a backup.
These people can afford to do it because they know that they’ll find something that aligns with what they want. They also don’t plan to be on a “break” indefinitely. They want to get back to work sooner rather than later, but they’re no longer fixated on just the cash component of compensation, and won’t compromise on other aspects they value strongly. They want what Edward Deci and Richard Ryan theorized: autonomy, competence, and relatedness. Unfortunately, most traditional Indian companies don’t offer these.
Fortunately, it opens doors for more interesting and potentially more rewarding opportunities.
Founders in India trying to solve difficult problems need smart people by their side. When cash was a priority, they had little chance of convincing them to work with them. But now, with ESOPs becoming a more recognized compensation tool and the countless wealth stories that have emerged from them, more of the top talent is open to joining startups with higher compensation in equity and lower in cash. They get a chance to create a greater impact, are in a position to design the culture of the company, and can work in a manner that gives them control of their time and their life.
By getting more control of their life, these smart people end up spending more time working than ever, not because they’re asked to do so, but because they’re intrinsically motivated for it. They work when they want to, how they want to, and on things they want to. Such an environment gives them the maximum chance to make an impact. Finally, everyone benefits - the company, the individual, and the economy at large.
If you’re building or looking to build a startup today, there’s never been a better time to get top talent to work alongside you. Smart people want to solve hard problems. They want to work with people who are genuine, honest, and committed to their vision. I’ve experienced this firsthand and am seeing the results.
Who wins in the end? It’s the founders and startups committed to doing things right.
What we’re reading this week
Drive by Dan Pink.
It’s a book about what really motivates people at work. It challenges how organizations think about motivation by showing that intrinsic rewards are more powerful than external incentives for complex, creative tasks. Throughout the book, it cites interesting research studies, cases, and anecdotes to drive its points across. It’s a relatively short read. Consider it, especially if you want to lead a team of high performing professionals.
Hope you enjoyed the second edition of Plain Sight. If you did, do share with your friends. Until next week.
Best,
Yashraj
