This one first ran March 4, 1996. It’s still one of my favorites and some of the best advice I’ve ever given. If I hadn’t written it then, I’d write it now and wouldn’t change one word of it.

– Bob

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“I’ve worked my tail off for 20 years and what do I get?” complained a former co-worker on his last day. “Doesn’t that count for anything?”

Here’s what I didn’t point out: we all work under an unstated employment contract. Based on financial mathematics, it supersedes all written contracts, union protections and employment laws.

It’s called the 70% rule (by me), and nobody ever seems to mention it. It says, “If you don’t deliver at least 70% more than your salary in value, you’d better start making other arrangements.”

Here’s why. Let’s imagine you earn $40,000 per year. Add 25% for fringe benefits, taxes and so forth, and you get $50,000. Office space, furniture, telephone, personal computer, and other facilities and overhead expenses — at least $10,000 per year — brings to $60,000 the amount your employer spends each year for your services.

Indexed mutual funds earn about 12% per year over the long haul. By paying you the money, your employer forgoes that income — $7,200 the first year. Add it in and you’re up to a whopping $67,200 per year. In round numbers you find the true cost of having you around comes to your salary plus 70%.

According to the 70% rule, working hard doesn’t matter. Managing the coffee fund doesn’t matter. Being right all the time doesn’t matter, and probably annoys everyone when you point it out, too. Your loyalty and all the great things you did five years ago don’t matter either.

If your job doesn’t add enough value, the quality of your work doesn’t matter, and you — not your employer — are responsible for recognizing the fragility of your situation.

Only one thing matters: delivering more in perceived value than you absorb in costs — your salary plus 70%. (Why perceived? Think of unheard trees falling in uninhabited forests. As with quality, recipients, not providers, define value. Nobody has an accounting system that can show the real dollar value each employee delivers, so value in this context is very much a matter of faith and perception.)

Ask yourself how much value you actually deliver. If your company suddenly decided to stop doing what you do, would it lose more than it saves from your salary plus 70%? Who at senior levels of your organization understands and believes in the value you deliver?

Here’s a harder question: will you and your job deliver the same value next year? The year after?

How many batch Cobol programmers failed to ask this question and now wonder what happened to their careers? They delivered value right up until the point nobody needed much batch programming anymore. Then these hardworking, skilled programmers had no way of delivering enough value in the new environment.

American workers have believed in the idea of job security for decades. You won’t find security in employer goodwill anymore. You won’t find it in union contracts, either, nor in an in-flight magazine or a 3-day seminar on making a fortune in real estate in your spare time.

You won’t find it because it doesn’t exist.

What does exist is opportunity. You have to read your own tea-leaves and peer into your own crystal ball — that’s your job, not your employer’s. Then, you have to ask for the kinds of opportunities that will give you next year’s skills, so you can continue to add value in the future. Good employers give their employees opportunities to grow.

You can still fall victim to office politics. Dumb decisions in the executive suite can run your organization into the porcelain facility. The latest management fad can catch you napping or, worse, you can support the old management fad two weeks after your new manager jumped on a different bandwagon. The dollar can rise in international markets, harming the export situation.

Heck, the sun could go nova prematurely.

In the long run, though, the 70% rule puts you in control of your career, and provides the surest guide you have to continued opportunity and job satisfaction.

“You have to draft a Mission Statement,” cried our consultant, passion in his voice. “According to a recent study, every successful organization has one!”

It seemed like a harmless enough way to keep all of us managers … uh, leaders … out of our employees’ hair, so I refrained from asking how many unsuccessful organizations also had Mission Statements. The whole management team toiled away and, after several drafts (43 as I recall) we came up with suitably dull phrasing that encompassed everything we did as a division, offended nobody, and pleased our consultant immensely.

An entirely worthless bit of prose, typical of the genre.

Why do some Mission Statements seem to create energy while the vast majority seem to generate ennui instead? What’s the difference between a Charter, Mission Statement, and Vision, and why all three? Aren’t they all really pointless exercises in wordsmithery, distractions from the real work of whatever it is we’re supposed to be doing?

These documents should create real value. Before looking at why so many go wrong, let’s look at the role each one plays.

As with a lot of internal organizational theory, the idea of creating these documents stems from their utility in helping whole businesses figure themselves out. For a business, its Charter defines the business it’s in, its Mission defines its market positioning, and its Vision explains its significance – how it will improve whatever marketspace it participates in.
Which leads to a useful question: do principles for managing a business scale down to divisions, departments and teams? The answer, in this case, is an unequivocal “probably”.

You certainly need to understand your Charter. It ensures you and your employer agree about why you exist. No problem there.

Why do you need a Mission Statement? Market positioning results from competitive forces, doesn’t it?

Yes it does. As it happens, you’re working in a highly competitive situation. Plenty of managers would love your job. Any number of technical services organizations would enjoy taking over what you do. And the company that employs you and spends money for your services wants an organization positioned in harmony with its goals and strategies.

Do you need a Vision – an explanation of how achieving your Mission will help transform your company and improve its standing in the market? Absolutely. Visions motivate. They help employees understand how they’ll make a difference. They also demonstrate your ability to lead, as opposed to just supervising work.. That will create confidence in you.

Why do so many Mission and Vision Statements fail? Three reasons.

First, for one reason or another, most end up being descriptive when they should be prescriptive. Your Mission and Vision shouldn’t legitimize everything you might ever want to do. They should inform everyone which, out of all activities you might undertake, you ought to actually engage in.

Second, most efforts focus on creating the documents. That’s just plain ridiculous. The ideas are what matter, not the phrasing. Employees may not agree with your approach, but they need to understand the direction you’ve chosen and agree to work within it.

Finally, far too many of us think of these efforts as projects, having a beginning (“Let’s write them.”), middle (“I think this word works better than that word.”) and end (“Here’s our Mission Statement. Carry it with you at all times. The team that wrote it did a fine job and I’m proud of them.”).

Don’t write a Mission Statement, print a bunch of posters, paste them around your organization, and breathe a sigh of relief (“Whew! I’m glad that’s finished.”) Don’t worry about the phrasing of the statement at all. Instead, hold discussions about your mission and vision frequently with the whole management team to make sure your direction still makes sense as circumstances change.

Encourage your managers and supervisors to use their understanding of your mission and vision to provide context in discussions with staff.

Understanding of your mission and vision has to become pervasive. With enough discussion the right words will come.