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The hidden power of status in your organization
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Hey Reader, How much ability do you have to influence the decisions of the people around you? Something I've been thinking about lately is status in organizations. If you think of your company, who are the people in it that are the most well-known? Who are the ones with the greatest influence? The people others pay attention to. Sure, those with the most seniority or tenure may immediately come to mind, but I bet you can think of others who are respected despite not being high ranking executives or having been employed for years. What makes them stand out? Why are they held in higher regard? Often, it's those who:
But why does status matter and why should anyone care? Like it or not, humans care about status. When you have higher status in an organization, your ideas gain traction more easily, and you're more likely to:
Something I want to do more often as I design systems is find ways to intentionally cultivate and incentivize status. The problem is that many organizations unintentionally reward the wrong status markers. In many companies, status is attached to things that don't necessarily drive the outcomes the business actually needs:
These status markers often lead to bloated teams, slower decisions, and misaligned incentives. Personally, I care more about outcomes like:
The challenge is creating an environment where the actions that earn status are the same actions that drive the outcomes we want. For example, if I want my team to think in terms of flywheels and implement more of them throughout the business, how can I make creating and running flywheels high status? If I want my team to book more webinars, how can I make booking webinars high status? This reminds me of how Charles Schwab used status to drive performance: At twenty-seven, Charles M. Schwab became the general superintendent of the biggest steel works in America. He had been working for Andrew Carnegie for ten years.
Like Carnegie, Schwab rewarded his employees for high productivity but also drove them hard. He believed in carrots much more than sticks. One day he asked the men coming off a shift, "How many heats has your shift made today?" When they said "Six," he wrote a big 6 in chalk on the floor. The next morning, the overnight shift had erased it and written 7 in its place. The next day, the day shift had again erased it and written 10.
Schwab understood something fundamental about human nature: we're naturally motivated by status, recognition, and healthy competition more than direct incentives alone. He didn't create a complex bonus system. He simply made performance visible and gave people something to strive for. Next time you're trying to drive behavior in your organization or team, think about how you might use status as a motivator. What behaviors earn respect in your company right now? Do they align with what actually drives results? Redesigning your status incentives might be one of the most powerful and overlooked management tools you have. PODCASTHow To Turn Your Podcast Into A Full-Time BusinessToday I’m joined by Hala Taha, host of the Young and Profiting podcast and founder of YAP Media, to unpack how she built a million dollar business from her podcast. In this episode, we cover:
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Have a great week! —Nathan |
Nathan Barry
I'm a designer who turned into a writer who turned into a startup CEO. My mission is to help creators earn a living. Subscribe for essays on building an audience and earning a living as a creator.
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