What Executives Understand About Success that New College Graduates Don’t

“Every one of you should become an executive one day. That should be your goal. If it is not, then this is probably not the right firm for you.”

That’s what the responsible partner told my team in the first meeting we had of our audit engagement. It was not stated in an ultimatum type of way. It was stated in a supportive way that reassured each of us of our potential. The reason I remember it so clearly is because it was the first time I had ever been told something like that.

I was an audit intern at KPMG during busy season; still very green. I was not thinking about becoming an executive. Instead, like most college juniors, I was concerned about getting a decent job out of school. To that end, I did what most high-performing college students do: I attended networking events, I joined Beta Alpha Psi - the accounting fraternity on campus, I applied to internships, I continually revised my resume, I became more active on LinkedIn, and all the other things that would position me to get a solid entry-level job. Landing the internship at KPMG made me believe I was well on my way.

My perspective was reinforced by those I worked with in previous jobs. The first job I ever had was as a sales associate at my university’s school newspaper. Everyone there viewed it as a job; something to do and get paid while in school; a stepping stone on their path to bigger and better things. I possessed that view as well. I landed my first internship the following school year at Clearwater Analytics - a financial technology company. I was surrounded by young, high-performing professionals. For most, it was their first “real” job out of school. The culture was one of high speed and hard work but there was never talk of becoming an executive one day.

KPMG was the first time I worked in proximity to executives. It was also the first time a colleague spoke of the future beyond the next step. I felt excitement that one day I would become a boss and probably make a lot of money. That is was executiveship meant to me: being in charge of others and getting a bigger paycheck. I have been fortunate to interact with many executives since. This has given me perspective that has led to a more mature view of executiveship, one that is not based on vanity appeal. When I think back to that meeting and hear, “...you should become an executive one day...” I no longer have visions of grandiosity. I mostly think about the interactions I have had with executives and non-executives - particularly my peers who recently graduated college - and question, “What are the biggest differences between executives and new college graduates?”

“Executives focus on relationships and processes, new college graduates focus on transactions and results.”

New College Graduates and the Transactional Mindset

I recently read an article titled Am I Networking With the Wrong People? The author - Liz Ryan - recounts a networking event she attended at a top university that was hosted by the business school’s current MBA class. The name badges for the event were unusually large - about 6 inches by 8 inches - and the font was proportionally oversized. Liz soon discovered the reason for the comically large name badges during her interaction with the student responsible for making them. “I made them huge so that students can spot the business people across the room and see which ones are worth meeting,” The girl said, proudly. “We are busy and we don’t have time to waste networking with the wrong people… No one wants to meet some independent consultant who works for himself.”

It is almost laughable how snobbish this MBA student’s perspective was. What is not laughable is how prominent this mentality is among new college graduates. By “this mentality”, I do not mean the disposition to exclusively network with “important people”. That is merely a symptom of the mentality of which I speak. The mentality of which I speak extrapolates beyond a single incident in both personal and professional interactions and is something I like to call the “transactional mindset”.

The transactional mindset is one in which interactions are viewed discretely and value is placed on the exchange. For instance, a social media post is a transaction. When I post on social media, I exchange content for likes, shares, and comments. The more likes I get, the higher value the transaction. Dating has also become transactional. People used to have to awkwardly talk to a love interest in order to get a date. Now it is sufficient to swipe right on your phone. Each swipe is a transaction.

The transactional mindset extends into our physical lives as well. It is extremely common for my generation to cancel plans with friends in lieu of a better offer. I got beers with a friend from high school a while back and he told me about his plans for the next day. “I told this guy I would hang out with him tomorrow,” he said. “But our generation, we understand that’s just a courtesy thing. It doesn’t actually mean we’ll hang out. I mean, we might. But I’ll see what else is going on.”

Underlying the transactional mindset is an unconscious belief that there exists greener grass; that there is a more important person to network with; that there is a cooler guy or hotter girl to hang out with or date. This mindset has not manifested itself among my generation due to some evil disposition inherent within us. It is the consequence of a number of socioeconomic influences, which are best summarized by Simon Sinek in a recent interview:

The transactional mindset plagues younger Millennials more than it does older ones. Older Millennials - like many Gen Xers - were raised by Baby Boomers and not subject to the same parenting techniques - nor technologies - as their younger counterparts. As such it is almost as if Millennials are bifurcated into two sub-generations. Younger Millennials have only recently started to graduate and enter the workforce. Not all, but many bring the transactional mindset with them to their new employers.

Liz Ryan observed the transactional mindset of new college graduates at the MBA networking event she attended. To her credit, Liz aimed to correct the student’s perspective by pointing out that executives at the companies she wanted to get hired at weren’t the ones responsible for hiring her, and that independent consultants are trusted advisors at said companies who also may provide a much better medium through which she could get a foot in the door. Indeed, this did change the student’s perspective and she warmed up to the independent consultants she previously ignored. While Liz’s approach was successful in that instance, I fear it was merely a band aid. Liz simply corrected the student’s pricing model. She did not address the root of the problem.

Executives and the Relational Mindset

I enjoy meeting executives, new college graduates, and everyone in between. Executives tend to have interesting stories, lessons, and wisdom to share. A few turn out to be mentors that I go to when I am in need of guidance. New college grads are also interesting in their own way. They are often in search of a job and I enjoy providing feedback on what they might enjoy or how they might improve their resume. Sometimes it works out that I know someone that may help them get in the door at a company they want to work or who may be a great resource for them to tap into as a mentor.

I have noticed a number of things that differ between the two groups. Perhaps the most notable is this: it is much easier to get no-agenda meetings with executives than with new college graduates. It is not always the case, but I have found that when I reach out or follow up with executives and kindly ask if they have time to chat, they are happy to. It may be a few weeks or months before they have time, but most respond positively. New college graduates are different. Again, it is not always the case, but typically they will only meet if I convey a clear value proposition (e.g. a job offer or something).

I cannot say with certainty, but I believe the difference is due to differing mindsets that stem from differing understandings of what is important to become successful in business. Young people - especially new college graduates - have beliefs about how to become successful that are often misguided. These misguided beliefs were evident at the networking event Liz Ryan detailed in her article.

In their naivete, new college graduates focus on seeking out the highest value transactions. Executives - on the other hand - focus on building high quality relationships. This is because executives understand that transactions stem from relationships. What’s more, they understand they have little control over what transactions are available at any given time. They have absolute control over who they choose to meet and how they choose to treat them. Their experience has taught them that the more people they meet and the better they treat them, the higher value the transactions will be that present themselves, in due time. This mentality most executives have that I have met is what I call the “relationship mindset”.

In fairness, It is difficult not to possess a transactional mindset coming out of college. All that is running through the mind of a new college graduate is, “Just help me get a job! Can you help me get a job? Please help me get a job!” This mindset is magnified by all the influences that promote such a view of the world. Netflix, Facebook, Instagram, Tinder, these are all transactional platforms. Even higher education has become transactional. Because of the sheer number of students moving through higher education, both professors and students are less inclined to foster mentor-mentee relationships the way they used to. Instead, students figure out what they need to do to get the grade they want, then they do that and move on. Professors even abide, hence why A’s have become the most popular grade in college. More and more, students view college itself as a transaction: “I pay a school $100,000 and 4 years of my life in exchange for a piece of paper that will earn me $1,000,000 more in my lifetime than I otherwise would.” The irony is that this mentality is actually the result of the marketing efforts of older generations (including executives) to encourage younger generations to attend college.

Because of this new transactional perspective, fewer and fewer students learn the importance of fostering mentor-mentee relationships in their academic careers. They do understand meeting people is important for getting a job, though, so they finally begin attending networking events their senior year for the purpose of landing one, and typically only for that purpose. Some do land the jobs they want, while the rest either work at technical recruiting firms or stay at the jobs they held prior to graduating - which do not require the degree they spent 4+ years and $100,000 to obtain.

By contrast, executives do understand the importance of relationships, especially mentor-mentee ones. Most executives I have met had important mentors early in their careers that played an important role in solidifying the relational mindset they possess today. I suppose it is one reason why they are so open to meeting people - especially young people; to pay it forward.

Results Oriented vs Process Oriented

We explored one thing executives understand about how to achieve success in business that new college graduates don’t which is that success is built on relationships, not transactions. There is one other profound difference I have observed between executives and new college graduates in their understanding of how to achieve success in business. That difference is that executives tend to be process oriented, while new college graduates tend to be results oriented. In this speech to NC State's football team, Eric Thomas does a great job of differentiating between what it means to be process oriented as opposed to results oriented:

https://www.youtube.com/watch?v=eI5KqBGd01M&feature=youtu.be&t=3m53s

When I was a senior in high school, I taught myself how to trade stock options. I was excited by the prospect of trading with leverage because of how much money I could make. I ignored the risks and focused instead on the returns; the results I wanted to achieve. Suffice to say, I didn’t achieve them. Instead, I lost my whole portfolio in the span of a few months.

What is the difference between someone like me who lost his shirt in the span of a few months and someone like, say, Paul Tudor Jones who’s had twenty or thirty consecutive winning years? The answer is that Paul has stayed focused on the process, whereas I stayed focused on the result. I wanted the result to be particularly high ROI. I did not have an ill-defined process for hitting that goal, I did not have a process at all. So, the more I lost the bigger risks I took until I reached a point I had no more risk to take. By contrast, guys like Paul Tudor Jones have extremely well-defined processes they adhere to with discipline, regardless of the intermediary swings and volatility of the market. Anyone who has watched Trader knows this to be true.

There is no shortage of evidence to support the process oriented approach executives tend to take. Marcus Lemonis admits he focuses on three things: people, process, and product. Eric Ries, author of The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses, claims, “Startup success can be engineered by following the process…”. There is a TED Talk in which serial entrepreneur Bill Gross explores what factors attribute to startup success. He found timing accounted for 42% of the difference between success and failure. Intelligent investors know that market timing as a long-term strategy is a fool’s errand because timing is random - either in part or in whole. The same is true of startup timing. Entrepreneurs can take steps to gauge whether the market may be ready for their offering or not but there is no certain way to know beforehand. The conclusion to be drawn is that results are largely dictated by factors outside one’s control; call it randomness, luck, God’s will, or whatever.

Executives understand that results are probabilistic and largely outside their control. What is within their control is the input to try and achieve the desired result. We call this input “processes”. I have found most executives focus on that, the processes. They try and optimize the processes of their teams and organizations, and let the results take care of themselves.

I have found that new college graduates tend to possess the opposite perspective. Not only are they results-oriented but they proudly flaunt that they are results-oriented; as if it’s a good thing. They want to be told what is needed to be done but don’t want to be bothered about how to do it. They trust they’ll be able to figure out some way to achieve it, just like in school. After all, they received excellent marks in school by taking this results-oriented approach because it is fundamentally how school operates. Most teachers and professors don’t give a shit how a student completes a project, only that it gets completed. Certainly, they discourage procrastination and cheating. But they don’t really care. If they did, half of college students would be expelled for cheating (yes, it is that rampant). In fact, students praise themselves and one another for bullshitting a paper the night before that earns them an A. The only greater accomplishment is when they earn an A on a plagiarized paper their professor did not catch.

It should come as no surprise that new college students are often poor at time management, entitled, and frequently difficult to manage. They have been conditioned to believe success comes from obtaining the what - the result, the grade - and they have adopted a very Machiavellian approach in those pursuits. In the “real world” success is probabilistic, not deterministic (as it is in school). There are no guarantees about how to achieve the desired results; only likelihoods. Therefore the best way to position oneself for success is to optimize the how - the process - that has the greatest probability to leading to the desired result. I have found most executives have learned this lesson. What new college graduates don’t want to be bothered about is the exact thing executives focus the bulk of their efforts on.

Venture College: A Case Study

Most of the lessons I’ve learned, mentors I’ve met, and opportunities I’ve had in the last few years are due to my involvement with Venture College. Venture College is a program at Boise State that teaches students about Lean Startup and the Business Model Canvas.

Venture College is a non-credit program and therefore does not measure student success by grades, but by a demonstrated understanding of the aforementioned startup processes. Students present their understanding to a panel of entrepreneurs and executives by telling the story of how they used the processes to test the business model of their startup idea. Some students have successfully launched their business, raised capital, earned revenue, and/or quit their jobs to focus on their startup full-time. Others are neither seen nor heard from again. Venture College is perhaps the greatest testament to what I have outlined in this article as the key differences between executives and new college graduates.

If you hang around Venture College long enough, you will take note of some things. One thing you will likely notice is that the most successful badge holders - the ones who run revenue-generating businesses - tend to be the ones who visit the most. They do not hang around the most because they are successful entrepreneurs, they are successful entrepreneurs because they have been the ones who’ve hung around the most.

One alumni became an SEO expert at his job and built his own successful affiliate marketing businesses that now does seven figures in affiliate sales. He accomplished this by rigorously refining his SEO processes. Another participated in Hacking for Defense at Stanford this summer - taught by Steve Blank, himself - and is bringing the program to Boise State’s College of Innovation and Design next semester. This opportunity came about as a result of his relentless pursuit to form meaningful relationships with mentors and influencers in the industries he cares about: cyber security and military technology. The first Venture College student to earn his badge by presenting an invalidated business model maintained the relationships he had fostered in the program, stuck with it, and eventually joined one of the director’s companies in a marketing role. Eventually his perseverance paid off and the skills, relationships, and processes he developed along the way culminated into a woodworking business that now makes enough revenue to support him and his family.

A number of other Venture College alumni have enjoyed success in their entrepreneurial pursuits as well. All of them have done so by taking advantage of the relationships made available to them through the network of Venture College mentors and by constructing winning processes for product development and customer acquisition.

Unfortunately, for every alumni that has relentlessly pursued their entrepreneurial dreams to success, there are half-a-dozen who have not. I do not pretend to know their motivations. All I know is what I can observe. What I have observed is that they did not take advantage of the relationships offered to them and their efficacy was largely dictated by results. For example, some did not receive their badge on the first try. Instead of using the feedback they received to retry a few weeks later, they left. Others did receive their badge but did not reach revenue, so they decided to table their venture for the time being.

It is by no means a judgement of character, whether a Venture College student earns their badge and reaches revenue or not. It is merely an observation that some of my friends at Venture College who are “new college graduates” are, indeed, also executives. They became executives as a result of building relationships and focusing on processes - the way most executives I have met tend to do.

Not All Relationships and Processes are Created Equal

It is extremely important to point out that just because most executives [I have met] focus on relationships and processes, the relationships and processes they foster are not all created equal. I will illustrate this with two stories.

I recently traveled to Prague. On the way back, my plane was cancelled from Chicago to Boise. At customs in Chicago, the airline staff member re-checking bags hastily scanned my bag and said, “Okay, throw it on the belt.”

“Wait,” I said. “I got a text that said my flight was cancelled.”

“It says your flight is on time,” he responded. “They must have rebooked you.”

He proceeded to grab my bag and place it on the belt. I then walked over to the screen with flight times, not 20 feet from the staff member that scanned my bag. “Canceled,” it read. So I returned to the man and told him, “The screen says my flight is canceled and there are no other flights to Boise this evening.”

“Okay,” he replied. “Go to terminal 1 and get rebooked. Your bag will meet you in Boise one way or another.”

He was right, my bag did meet me in Boise; two days after I arrived. It is worth pointing out that while he hastily moved my luggage along, there was no one else behind me in line.

Now, let us juxtapose that experience with an experience I had at Trader Joe’s, right across the street from Venture College.

It was during a lunch break a few months back. I grabbed a sandwich and hopped in line. In front of me was a young woman, also with a sandwich in hand but tears in her eyes; tears she was trying extremely hard to fight back. She was next in line and I had made up my mind to buy her sandwich for her when I was stopped dead in my tracks by something amazing. The cashier rang the bell, as they tend to do at Trader Joe’s. Another employee came rushing over and the cashier whispered to him - loud enough that I could overhear, “Get me flowers, please.”

The employee hurried off as the young woman stepped up to the register, card in hand. “No ma’am,” the cashier told her. “It’s on us today.” She managed to crack out a “thank you”. Then, the second employee returned with a beautiful bouquet of flowers. “These are for you as well,” the cashier told her. She let out a gasp followed by some of the tears she had managed to hold back as she was walked back to her car by the second employee.

It was the middle of the lunch rush and there were plenty of people in line to check out behind this young woman, including myself. In spite of that, these employees took the time and care to do what they did to brighten this woman’s day.

I am not saying the man I interacted with at the airlines is a bad person and the two employees I witnessed at Trader Joe’s are good people. It would be ignorant to conclude such a thing based on my brief exchanges with them. What I am saying is that employee performance and their treatment of customers is a direct result of the processes and relationships fostered by executive leadership within the company. I have no doubt that both airline’s executives and Trader Joe’s executives understand the importance of relationships and processes as they relate to achieving success in business. It is likely how they got to where they are. I imagine, however, that the processes and relationships they have fostered within their respective companies are very different - as evidenced by how their employees treat customers.

Conclusion

I would close by advising my friends who recently graduated that have aspirations to become executives one day to heed this advice: focus on building relationships and adopting winning processes. Let the relationships be based on service, and processes based on truth and goodness so that when you do become an executive, your success and impact will endure. And let high value transactions and desired results stem from that foundation.