I'm a Loser

A Machiavellian theory of the firm

I recently discovered a cult classic blog post from 2009 called The Gervais Principle. In it the author, Venkatesh Rao, uses the TV show The Office to construct a (cynical) theory of how organizations work.

It’s great fun to read. This is the gist:

• “Sociopaths” ruthlessly pursue power and wealth. They start companies or quickly rise to the top of them. Jan is the prototypical sociopath in the Office.

• The “Clueless” are the middle management that Sociopaths promote. They’re not talented or conniving enough to threaten the Sociopaths at the top. They earnestly work hard and are dependent on the organization for their sense of worth. They’re loyal to the organization to an irrational degree, even when it is obvious the organization will not be loyal to them. Michael Scott is the Clueless archetype.

• “Losers” are employees at the bottom of the pyramid who carry out the functions of the organization. They are called Losers because they are not capturing any excess value from the firm in the way that sociopaths are, and are instead settling for a steady paycheck. The most rational losers put in the bare minimum effort to keep their jobs, and try to find meaning in their life outside of work. Stanley, Kevin, and Oscar are all Losers.

Reading the piece, I have a visceral desire not to be Clueless. Rao describes them like this:

A Loser who can be suckered into bad bargains is set to become one of the Clueless. That’s why they are promoted: they are worth even more as Clueless pawns in the middle than as direct producers at the bottom, where the average, rationally-disengaged Loser will do. At the bottom, the overperformers can merely add a predictable amount of value. In the middle they can be used by the Sociopaths to escape the consequences of high-risk machinations like re-orgs.

They are pawns who have a false sense of importance and are loyal to a firm that doesn’t care about them (cringe)! They are incompetent, make good money but not great money, and have the most warped sense of reality of the three groups. Nothing about this group is appealing.

So that leaves Sociopaths and Losers, for me.

The role of the Sociopath has an obvious aesthetic appeal. You maneuver to the top of the organization and harvest all the power and wealth from it. You manipulate others to do your bidding. It sounds really fun in a strategy game or as an intellectual pursuit. But it also sounds exhausting and soul-crushing:

For Sociopaths, conditions of conflict of interest and moral hazard are not exceptional. They are normal, everyday situations.  To function effectively they must constantly maintain and improve their position in the ecosystem of other Sociopaths, protecting themselves, competing, forming alliances, trading favors and building trust. Above all they must be wary of Sociopaths with misaligned agendas, and protect themselves in basic ways before attempting things like cooperation. They never lower their masks. In fact they are their masks. There is nothing beneath.

I am not sure the extent to which the life of an executive is really like this. It doesn’t seem to be the case for most of the people I’ve worked with. But I’m sure there are organizations where Machiavellian games really are the norm and life looks like this when you are amassing and protecting power.

Unfortunately for my future as a corporate tycoon I’ve found that everything feels much better when I am able to be authentically myself and I care about that a lot more than having an outsized amount of power or money.

So, I’m left to play the role of the Loser! It’s not much, but it’s an honest gig:

The Loser — really not a loser at all if you think about it — pays his dues, does not ask for much, and finds meaning in his life elsewhere. For Stanley it is crossword puzzles. For Angela it is a colorless Martha-Stewartish religious life. For Kevin, it is his rock band.

And for Joe, it is this little blog, and the occasional soft serve ice cream cone.

This theory is (I hope) tongue in cheek and overly pessimistic, but I think there’s a kernel of truth to it. The most important thing is to pick your head up and be able to clearly see the bargain you’re making with the firm you’re working for.

I don’t think there is anything wrong with being a middle manager, for example, but being Clueless is bad, and I have seen people who fit that description. Their identity is wrapped up in the job and they are too loyal to the firm and it does not serve them well when they get laid off or the firm goes under.

I also don’t think there is anything bad about working in a relatively low-paying job at the bottom of the org chart (being a Loser). But you should be aware of roughly what the work you are doing is worth to the organization and what you could make on the open market.

When I first moved to San Francisco, the startup I was working for paid me perhaps 20% under market. It was a lot more than I was making in Cincinnati and I was intimidated by the new place with lots of fancy companies and people. It took my roommate telling me I should ask for a “big boy salary” for me to recognize that the economic bargain I was making was particularly Loser-ish.

Being able to step back and understand the context in which you’re operating is key in both cases.

So I think there are things that you can learn from this framework. That said, My experience in the working world so far has been a lot more optimistic. I believe that especially in growing companies that are not zero-sum, you can earnestly work hard and be yourself be rewarded for it. And if you’re in the right place you can probably rise to have a lot of ownership while spending hardly any time thinking about Machiavellian posturing.

But it’s a fun thing to read about, and it will make me enjoy The Office more the next time I see an episode. I’d encourage you to read through the series if you’re interested in this stuff. Rao goes into much more depth (enough that I’m actually not sure the extent to which it is tongue in cheek).