The new economy offers entrepreneurial professors ever more opportunity to profit from their brand names. Soon well-known professors will be able to sell their personal brands over the Internet—through their very own lectures and courses. Instead of teaching 100 students a year, each of whom pays him, indirectly through their tuitions, roughly $1,000, he can reach 100,000 students around the world. If each of them nets him $10 for his labors, he’ll earn a million dollars. (The legal question of who owns the courses and the brand—the star professor or the brand-name university at which he nominally teaches—is sure to become a lively one.)
The point is generalizable across all institutions: As talented people become more mobile and the market grows more competitive, the incentives are on the side of investing in one’s personal brand rather than devoting time and energy to the organization. Apart from the group whose mission is sufficiently compelling as to command the passions of its members, their first priority will be to sell themselves.
The Barro saga is interesting for another reason. After Barro had so conspicuously determined his “worth,” professors all over America were able to compare their own levels of compensation with what he was offered and estimate their own relative “worth.” Such a revelation may have made many who were otherwise quite comfortable feel a measure of discontent. In the old economy, remember, you earned about the same as anyone else occupying a position with the same seniority in the same industry. Salary wasn’t something to be discussed, in any event. But in the emerging economy, replete with bids and counterbids, your compensation level is likely to be different from that of your colleagues, and yours and theirs are both more likely to be widely known—suggesting your and their relative “worth.” Few pieces of information can cause more distress and instigate more rancor.
Mo Vaughn could have lived a fairly comfortable life on the $64 million that the Boston Red Sox were willing to pay him. Count in taxes and the cost of living in Los Angeles, and the Angels’ $72 million offer wasn’t much better. But the New York Mets had offered Mike Piazza $91 million in 1998, and the Red Sox paid Pedro Martinez $75 million. Mo probably figured he was worth at least as much as Pedro. The Sox’s $64 million final offer told him they didn’t think he was. And that difference of opinion about Mo’s relative worth may have been just enough to send him packing.
A good friend on my faculty recently decided to move to another university that offered him a better deal. He had been a valued colleague, and hardly the sort of person who cares about how much money he earns as such. I asked him why he was leaving. He looked at me for a long instant before answering. “I just don’t feel valued here,” he said.
I didn’t understand at first. My friend had been given a number of awards, was the chairman of a major department, everyone who knew him appreciated his scholarship and his service to the university community, and his students were enthusiastic about his classes. Why didn’t he feel valued? He explained that his current salary was not particularly high relative to many other professors at the university, and that the other university had “pulled out all the stops” to get him.
I asked him, “If you didn’t know the level of anyone’s salary here, or at any other university—and practically no one else knew, either—would you still feel undervalued?” He thought for a moment. “I suppose that would be different,” he said.
It would be different because my friend would then have looked for other cues about his “worth”—cues more subtle and supple than his salary and perquisites relative to others on campus, and relative to the higher salary and perquisites he was being offered by the other university. But there’s something particularly stark about the numerals in a paycheck relative to the numerals in other paychecks, especially when they are all so public. I don’t think my friend cared a hoot about the relative earnings in terms of how much the dollars would buy. He was sensitive, rather, to what the dollars meant about his worth in his chosen profession. It was a signal of how much value was attached to his work in his community. My friend simply wanted to go to a place that valued him more.
WHY WINNERS DON’T TAKE ALL
One newly popular theory about why certain people like Robert Barro earn so much more than everyone else is that within the national or global marketplace only a few people gain big visibility and credibility—and they “take it all.”
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At first blush, the theory sounds plausible. There are only a certain number of openings in the freshman classes of Ivy League universities and only a limited number of slots on the best-seller list. But in a dynamic economy, there are actually few such “zero-sum” situations. Typically arrayed behind each big brand name are a number of people with smaller names, some of considerable talent and salesmanship. As the big names do better with the help of these smaller names, the reputations of the smaller ones begin to grow. And because the smaller ones are in the business of marketing themselves rather than the organization, they can exact larger payments reflecting their new worth, or else leave for better deals elsewhere.
In his annual letter to shareholders in the spring of 1999, Disney chairman Michael Eisner gushed about
SportsNight,
a new comedy series on Disney’s ABC Television. “It is fantastic,” Eisner wrote. “It is one of the building blocks we are putting together to eventually make ABC Number One.”
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Assume for the moment that Eisner’s enthusiasm for
SportsNight
was merited. The question is, whose “worth” is boosted by a television hit like this?
It turned out that Disney didn’t own
SportsNight.
It was the brainchild of a production house run by the movie producers Ron Howard and Brian Glazer and longtime Hollywood agent Tony Krantz. The trio have been responsible for several TV hits, not only on ABC but also on its rivals NBC and Fox Broadcasting. Howard, Glazer, and Krantz are “hot.” If
SportsNight
was a hit, advertisers would pay Disney a lot of money in order to lay claim to thirty seconds of commercial time when it was aired on ABC. But all those extra dollars wouldn’t flow to Disney. If Disney wanted to continue to receive
SportsNight
programs from Howard, Glazer, and Krantz, it would have to pay them a portion of the winnings, because they’re now “worth” more on the market. Their reputations have been enhanced among all network executives who make such buys.
Howard, Glazer, and Krantz would have to apportion some of their winnings to several talented writers and producers who have been devising the clever, oddball situations that the trio are selling. Among them is Aaron Sorkin, who came up with the idea for the show and wrote several of its early episodes. Even before he did so, Sorkin’s reputation in Hollywood was on the rise. He wrote the scripts for the movies
A Few Good Men
and
The American President.
If
SportsNight
was a big hit, Sorkin, too, would be “worth” more.
So when Eisner told Disney shareholders that
SportsNight
was one of the “building blocks” he was putting together to make ABC “Number One,” the statement was not precisely true. Moreover, even if
SportsNight
had become a hit (which it didn’t), Disney stockholders would not have been nearly as enriched by it as they might have expected. That’s because, rather than sitting atop a bureaucracy whose “building blocks” are owned outright, Eisner is at only one point—albeit a big one—in a web of connections whose every point has choices about where it wishes to be connected in the future. This significantly dilutes the “winner-take-all” phenomenon, because it gives talented people like Aaron Sorkin—at another of those points—leverage to get whatever he’s worth on the market. Unless Sorkin was compensated adequately, Disney’s rivals could pull him away from ABC—which was exactly what happened in the fall of 1999, when he created a hit series for NBC,
The West Wing.
The new economy has precious few lone players like Mo Vaughn who win it all, or nearly all of it. The rest of the people at or near the top are doing remarkably well, to be sure. They possess just the right combination of talents and connections, and have sold themselves adeptly. But they are not winning it all; they are sharing some of their winnings with talented people arrayed around them on whom they depend, and those people in turn are sharing some of their winnings with others on whom
they
depend, and so on, extending outward and downward in a vast network of interconnections. As talented people make names in their fields, they’re worth more. The Aaron Sorkins of Hollywood are doing better all the time.
Rather than there being just a handful of people at the top and everyone else far below them, many talented people are on the rise. The top 1 percent is doing magnificently; the top 5 percent is faring better than ever before; the top 20 percent is living quite comfortably. But each rung on the ladder is spaced more widely apart than before. As noted, the middle has not progressed much, and those on the rungs below them are relatively worse off.
MARKET-DIRECTED MAN AND WOMAN
In the old economy, you got ahead by being well liked. Self-help books solemnly advised on
How to Win Friends and Influence People.
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The successful “organization man” was accepted by all. Arthur Miller’s Willy Loman advises his sons how to succeed: “Be liked and you will never want,” he says. “[T]he wonder of this country [is] that a man can end with diamonds here on the basis of being liked!”
25
David Riesman, the eminent sociologist of midcentury America, identified what he termed the era’s “other-directed” personality, who sought above all else to be approved of by his peers. “One makes good only when one is approved of,” Riesman observed about the quintessential midcentury American character. “Thus all power . . . is in the hands of the actual or imaginary approving group.”
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In the new economy, you get ahead not by being well liked but by being well marketed. The goal is no longer to fit in or to gain the approval of one’s peers. It’s to stand out among one’s peers, to dazzle and inspire potential customers, or people who will connect you to them. The old organization is vanishing, and in its place are men and women who not only believe deeply in themselves but can persuade others to believe in them. To this end, a generous dose of self-esteem is more important than gregariousness; beaming self-confidence, more useful than humble charm. In order to be powerful, it’s necessary to
feel
powerful, to have
The Courage to Be Rich,
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says financial guru Suze Orman: “I do know that your net worth will rise to meet your self worth only if your self worth rises to accept what can be yours.” Management consultant Tom Peters instructs that “starting today you are a brand. You’re every bit as much a brand as Nike, Coke, Pepsi, or the Body Shop.” If you are to succeed, your “most important job is to be head marketer for the brand called You.”
28
Financial and management consultants are America’s new spiritual leaders—televangelists, psychologists, personal trainers, and coaches who preach spiritual self-actualization as economic advancement. Under the new ethic of self-motivated financial spiritualism, personal worthiness is measured by one’s net worth. It’s the Protestant ethic turned on its ear: You’re worthy because the market rewards you; you succeed financially because you believe passionately not in God but in
yourself.
By making your personality into a marketable commodity and selling it successfully, you can increase your worth and thus gain worthiness in the divine eyes of the market.
Behind the financial spiritualists are legions of personal promoters, publicists, personal marketers, and image consultants able to turn pastry chefs into marketers of cookbooks, cable-television shows, appetizing Web sites, new lines of soups and spices, and kitchenware. “When you get a job as a chef,” says Jacques Torres, pastry chef at Le Cirque 2000 in Manhattan, “you start at a certain salary. That salary will go up gradually, but if you really want to make a better living, you have to get into consulting, books, television.”
29
Don Hobbs, who specializes in “personal marketing” of real-estate agents, advises that agents use advertising dollars to “market
me
—to create a distinction between me and 5,000 other agents.” Not “ ‘I’m Joe Blow, real estate agent,’ ” but “more like two little girls running up to Dad. Dad getting out of the car. Soft music. ‘When it matters . . . it matters to Ron Kubek.’ Those two darling blond babies in his arms—highly emotive music. You’ve got to get them emotional.”
30
Not many years ago, state laws barred doctors from advertising. It was assumed that doctors were not, and should not, be part of a commercial culture. After all, they adhered to a code of conduct first set down by Hippocrates. Now, with the help of “doctor publicists,” some doctors market diet books, health advice, and a host of products extending from sugar-free maple syrup to the steroid hormone pregnenolone.
31
An increasing portion of this booty is marketed over the Web, where even Dr. Koop now resides. Dentists hire publicity agents to promote their high-tech gum lasers and state-of-the-art laminating techniques. One Dr. Larry Rosenthal is rolling out a consumer product line bearing his name, including an electronic toothbrush and dental floss that can remove stains between teeth.
32
Talented people are even selling shares in themselves. Rock star David Bowie floated a personal bond issue, entitling investors to a fixed percentage of his future royalties and concert receipts, which was fully subscribed within an hour for more than $50 million.
33
Martha Stewart has incorporated, and is selling shares in herself. Stewart isn’t simply lending her name to a specific product, like Minnie Pearl’s Fried Chicken. She’s selling her cheerful personality—her homespun but elegant taste, her adorable decorating ideas and homey recipes, and her pleasantly agreeable approach to life, in which everyone has time to make citronella candles from scratch. Her investors hope the Martha Stewart brand has significant value apart from her, but should she take her money and retire to the Netherlands Antilles, they may discover that the two are inseparable.