Competence Tax May 2020

Having spent a few different stints working in large companies, I’ve enjoyed the time mainly for the people watching. I like to see how people interact with each other in a big office. I read an essay by Keith Rabois about working in big companies, and about how if you are hiring and you have to recruit some people from a big company, focus on barrels and not ammunition. Without my own experiences, I would not have my own framing of such an unusual recommendation. I’m going to assert that the bigger the company, the more the most talented people pay a hidden (but very real) tax in the form of time to the less talented people. I am calling this a competence tax: a flow of resources from the more able to the less able. This may in fact benefit the company, but as an individual, it just ends up eating up your valuable time.

First, Keith Rabois. Barrels are the people who have a line at their desk of people waiting to ask them questions. This may be because they are an external guru (e.g. they invented a thing and just happen to work somewhere in particular) or an internal one (e.g. they rapidly learned how to navigate the company, the customers or something else important). Ammunition are the people waiting in the line at the barrel’s desk for an answer. They’re the enacters, the implementers, the ones without too many original ideas but who focus mainly on the execution of other people’s ideas. Because competence is relative, in any given group, you’ll have both of these profiles. And his recommendation is to hire the barrels and concentrate them, leading to results.

I have a different but similar interpretation of this. As time passes, and one goes from relatively lacking in things to offer to relatively abundant in them, your time will start to get eaten up with an increasing number of pseudo valuable obligations. It could be that people want your input on a project, so they invite you to their meetings. It could be that you have good ideas for the product, so you’re asked to write them up. It could be that you start to develop best practices in your role, and are asked to teach them to the rest of your team. Provided an imbalanced enough environment, these obligations start to eclipse the impact you can have in your actual role. This is what I’m referring to when I say competence tax: a tax paid in time by people of relatively higher competence in an environment composed of people less capable than them.

I realized that I’m putting a new name on what seems to be something that has always existed, but it did occur to me that a lot of the resentment that seems to build in these people doesn’t come with their frustration in their role (which they seem to be doing quite well in) but in their frustration with the increasing tax they pay for having things to offer. It is really hard to scale any kind of human institution without accepting that the best among the people involved will end up paying this tax. And I have a feeling as the world shifts to remote work, it will be more visible who has been paying this tax, and harder for those charging it to sustain themselves. It is likely that companies will stratify into an aggregation of people with similar levels of talent. The best of the best working with like minds, and hordes of semi competent people with no one to copy.

I think this concept translates to other industries too. I remember being in the hospital around the time of the birth of my son, and seeing that certain doctors always seemed to be absolutely slammed with work. The residents and nurses never had the same amount of obligations relative to the absolutely staggering workload of those who led departments. I watched (what are presumably) the better doctors literally running between obligations, coaching their peers on what to do in more difficult situations, and generally seeming like they had been pushed right up to the line of breaking. Presumably, some people get pushed past the line, and end up either having to devise creative ways to hide from others, or simply changing professions or approach.

This is necessary in order to be in an environment where they are not slogging through Other People’s Problems and constantly paying competence tax. It is interesting to think about the fact that while the institution benefits from pushing their best people to the line (which is really the bottleneck for the quality of work of the entire organization), those people are probably averaging all the outcomes they create with the people around them. Similar to monopolies in business (monopolies pretend to be in competitive markets, commodities pretend to be monopolies) one imagines that the competent pretend not to be (to protect their time) while the incompetent pretend to be (by taking credit for others ideas for their own survival).

For that reason, it’s probably much harder than it sounds to figure out who the truly competent members of the team are. One way to do this would be to see how the quality of work is impacted when people go on vacation (removal cost). This tends to reveal the true value someone brings to a situation, by seeing the outcomes that result in their absence. You could also do the bus test (how harmful would it be to the org if that person got hit by a bus). I suspect that might be the fastest way to clear up who is bringing the average up or down. It’s a little disturbing to think about how for these structural reasons, the best people are chronically underpaid (looking at you, Jeff Bezos) and the worst people are chronically overpaid. At least, if you care about the outcomes and quality of the work of the organization in question, that is. Certainly a significant narrative and overton window violation, if true.