As a coder, what is your Net Value Equation?
If you make it your life goal, accumulating money and digging a hole are very similar. You could keep going forever and you might even get good at it; however, it’s never enough and eventually, you realize that you are in your grave. In the process you only see dirt and worms, lose sight of the light and forget the existence of a beautiful blue sky above you.
Throughout my career, I focused on adding value to the organizations I’ve worked for. I never worked with the single goal of accumulating money. Do not misinterpret me: I like making money and being financially stable, but I see compensation as one of the measures of the value I add. If a company is willing to pay me X, I need to know that I add more than X to the bottom line. When the value I add is far greater than X, I expect to be compensated accordingly, keeping the equation a net positive for the company, but fair for me and my family.
Net Value Equation (NVE)
The relationship between employer and employees is similar to an economy. For an organization to thrive, every employee needs to, directly or indirectly, add more value than they cost. I apply this model to myself, and I pay attention to the value I add and to the value I subtract.
I call this my Net Value Equation, and I strive to make it as high as possible, expecting adjustments along the way from the people who rate my performance.
Net Value = ∑(Value Added) -∑(Value Subtracted)
The Net Value Equation applied to software engineers
Software engineers often believe that the value they add is measurable mainly by the code they write and the technical discipline they bring. Also, they commonly believe that the value they subtract (cost) is only salaries, benefits, and maybe bugs in their code. This is a fallacy, and it is one of the main reasons why engineers fail to make the career strides they seek.
Have you ever seen a technically strong developer getting fired because he of she was causing drama and chaos? Or a technically weak developer getting promoted to leadership roles? Were managers blind, or out of their minds? The reason behind those firings and promotions is that there are many ways engineers add and subtract value to the company they work for; some of those ways are not always clear to the engineers themselves, but good leadership notices and evaluates it.
Ways to add value
The following is a partial list of ways developers can add value:
- Producing high-quality code, with a direct impact on the company’s intellectual property and value proposition.
- Improving the value added by everyone around them.
- Generating new ideas that result in value added.
- Being an innovator.
- Applying and sharing knowledge and experience accumulated during their careers.
- Staying updated on technology trends, and bringing that knowledge to the team.
- Making the work environment more fun with their personality, energy and work ethics.
- Being a partner and a resource for their co-workers.
- Helping their managers being better leaders by providing feedback, raise concerns, suggest solutions to problems, helping resolve issues and committing to supporting decisions.
- Leading by example.
Causes of value subtracted
Developers need to watch out for costly behaviors. The following is a partial list of possible forms of value subtracted:
- Writing low-quality code (too many bugs, hard to support, poorly documented, poorly organized, poorly implemented, poor performance, lack of unit tests, etc).
- Generating emotionally charged situations (AKA, drama).
- Pushing back in nonconstructive ways.
- Bringing more problems than solutions.
- Expecting to be right and to get their way for no good reasons.
- Being selfish.
- Creating a hostile work environment.
- Being disrespectful (being always late to meetings, being rude, etc.)
- Being overly aggressive.
- Not committing to support a solution when they disagree with it (one must agree and commit, or disagree and commit)
- Saying one thing, and doing another.
- Not being transparent.
The ripple effect
Any value that one person adds to the people around him or her, is multiplied by the number of people involved. That is the reason strong developers with leadership and people skills are so valuable. This multiplication effect is what pushes engineers through the career ranks and pay levels.
This is not to say that is enough to have leadership or people skills to be promoted in the engineering ranks. Gaining the respect of others is key, and developers who are technically weak will have to work particularly hard to influence their peers. If you are a hiring manager and want to scale your organization, don’t forget to evaluate candidates for their ability to affect others.
Consistency is key
Everyone goes through ups and downs. The net value equation can fluctuate over a period, making it difficult to decide if it is a net positive or a net negative. To deal with this common ambiguity, I consider fluctuation itself as an extra value subtracted. For the equation to be positive over a period, the value added needs to be consistently positive. If it is inconsistent, then it cannot be a net positive value.