What is the fastest way to become wealthier?
Saving, investing, starting a side business or getting a great education are all things that will set you on the path to financial independence. These are also things that take years and sometimes even decades to bear fruit.
A lot of time will pass before you will notice the efforts of your hard labour and good financial decisions.
Like it or not, the fastest way to increase your net worth is to get a meaningful raise at work. I am not talking about a 2% raise that gets instantly eaten by inflation and keeps you running still.
Instead, I am talking about a raise of 20%, 30% or even 50%+. The kind of raise reserved for the best investment bankers, lawyers, and CEOs. The kind of raise that you only get when you get promoted a level (or two) up at a time.
Now, the whole promotion thing has got to be easy, right? After all, you just need to be good at what you do and work hard. Right?
Unfortunately, the above statement is one of the biggest fallacies you will come across in the corporate world.
Being good and working hard are important factors, but they are not the only factors influencing your success. The sooner you get comfortable with that, the sooner you will stop missing out on promotions and raises – all while watching others get ahead.
It is a highly uncomfortable truth – and one I really dislike myself. That, however, doesn’t make it any more real. So what to do?
The Practical Guide To Becoming More Powerful
Today I wanted to talk about a book that I have picked up by total accident many years ago.
Little did I know that this book, which I read in less than a week, would have the biggest impact on my career success. It helped me navigate countless charged situations in a highly political, cutthroat industry – and turn them to my advantage.
If I am being realistic, this book has done more for my promotions and pay than working 100-hour weeks (which I did on a regular basis for the first 5 years in investment banking) ever could.
It was probably more useful to my career development than many of the MBA courses I have taken. And if I was to recommend one career development book to read in your ENTIRE life, this would be it. This is the book I will give to my kids the day they land their first full-time job.
Why Should You Pay Attention?
Here is some background to consider if you are still deciding whether reading this book is a good use of time.
Those of you who are familiar with the US MBA system know that the Stanford MBA is the most exclusive and prestigious MBA program in the world. That’s right, it isn’t the Harvard Fortune 500 factory with 930 students.
The Stanford MBA, with 420 students, is a much more exclusive program that opens doors to the most stratified careers in technology, private equity, and hedge funds.
As a matter of fact, so attractive are the exit options for the Stanford MBA students that barely any of them bother to consider investment banking. That’s right, only 1% of the graduating class bothers to go to an industry with some of the highest compensation levels out there.
So what are these future tech billionaires, company CEOs and private equity moguls most interested in? Is it finance, accounting, or strategy?
Interestingly, it’s not one of the above. One of the most popular and oversubscribed courses at Stanford GSB, year after year, is an innocuously named course OB377: The Paths To Power. The course is taught by Professor Jeffrey Pfeffer, one of the most renowned management thinkers of our time.
Following the smart money when it comes to investing your capital can a good idea sometimes. Following the smart people when it comes to investing your time in educating yourself is ALWAYS a good idea.
The professors (and students) at Stanford know that being good at your job will only get you so far. If you want to really supercharge your career and earnings, you need to take notice and fill out the white space when it comes to non-performance aspects of your job.
What Will You Learn?
For a 300-page book, this one is packed with massive amounts of information. Below are some of the topics that Jeffrey Pfeffer explores from both a theoretical as well as a practical point of view:
- The personal qualities that bring influence and power – and how to develop them
- How to grow your power from ground zero
- Acting and speaking with power
- Overcoming opposition and setbacks
- Building efficient and effective social networks
- How – and why – people lose power
- Price of power
I wasn’t in any way naïve when I first picked up this book. That being said, I never had a unified, structured view of how power dynamics in organizations really work, which is what Prof. Pfeffer lays out in a direct and structured manner.
Below are a few of my favourite lessons from the book:
- Forget leadership books. They are written by people who have a backward-looking bias and a self-gratifying objective.
- If you want to be successful, don’t be afraid to be memorable and break rules along the way
- Success is a combination of will and skill. Will is a combination of ambition, energy, and focus. Skill is a combination of self-reflection, confidence, understanding others, and tolerating conflict. You need to work on all 7 aspects of your personality to be successful in your career.
- Keeping your bosses happy is the most important thing. Job performance is secondary
- Take time to be visible to, and socialize with powerful people
- Don’t worry about what others think of you. If you have a position of power in the organization, they will like you anyway.
- Status can be very hard to achieve but also hard to lose
Like it or not, the vast majority of us work in places where power dynamics determine our relative position and pay. If you are determined to make the most of the time you spend in the office, you can do worse than adopt some of the proven strategies outlined by Jeffrey Pfeffer.
Because if you don’t – someone else will.
About Banker On Fire
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Banker On FIRE is an M&A (mergers and acquisitions) investment banker. I am passionate about capital markets, behavioural economics, financial independence, and living the best life possible.
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9 thoughts on “The Real Path To Wealth And Power”
This looks like a fantastic book! I’m definitely going to pick it up and give it a read. I’m lucky enough to have come across your blog at a point where I have plenty of working years ahead of me, and hopefully this book will have a huge influence on them. Surprisingly (as a big bookworm) I’d never heard of the book until now. I’ll make sure to go and check it out, read it carefully and then implement the steps.
Yeah, it’s definitely not up there on the bestseller lists. I came across it when chatting to a couple of friends who had gone to Stanford – and raved about Pfeffer’s course.
Let me know what you think of it!
I finished it last night and found it to be a great read (as I mentioned on Twitter). Today I decided to re-read your article to see how well I agreed with your outlook – and honestly you’ve given it a fantastic summary which I’m probably going to bookmark as a cheat sheet to look at from time to time! Thanks for a great article
Thank you, very happy to hear that! And appreciate the Twitter callout also 🙂
Thank you for the book recommendation. I’ve just finished it and it was fantastic – so much useful advice.
Please do let us know if there are any other books that you’ve found very helpful.
Glad you found it helpful Sarah. It’s still my go-to resource for navigating workplace politics.
Here’s a short list of books I found particularly insightful / entertaining: https://bankeronfire.com/recommended-books
Going to give it a go! Thanks for the reco 🙂 enjoy your blog
Totally worth it. ALl those years later, still one of my favorite books.