Zoom: An IPO Done Right?

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Growth
Eric S. Yuan, CEO of Zoom. Photo with credit to Zoom.

On March 22nd 2019, Zoom filed their S-1, the registration form in anticipation of their initial public offering (IPO). An IPO is the first time that the shares of a company are able to be traded on a public stock market. This allows companies to raise more funding through selling its shares and also allows investors and option-holding employees to cash out.

More interestingly, since public companies have to report on their profit and loss, an S-1 filing is typically the first time that a private company exposes their internal workings to the rest of the world. Revenue, growth, number of employees, net loss, you name it: it’s in the document.

S-1 filings are often the subject of excitement and scrutiny on sites such as Hacker News, as keen members speculate and pick apart the inner workings of these so called unicorns: privately held startup companies with a valuation of $1 billion or more.

As the Zoom S-1 appeared online, many of us had to pick our jaws up off of the floor.

Who are they?

What do Zoom actually do? Well, they pretty much do one thing really well: video communications. We’ve been using Zoom at Brandwatch for a few years now, and what others have reflected in the commentary around the filing is true: it does indeed just work. That’s true for video calls with two participants as much as it is for company meetings with hundreds of people dialing in.

Zoom was founded in 2011 by Eric S. Yuan. Previously, Yuan was a founding engineer at WebEx, a video communications company that was acquired by Cisco in 2007. After the acquisition, he felt that the only way to address a number of fundamental issues with the product was to rewrite it from the ground up. Cisco leadership didn’t listen, and the rest is history.

Video communications were, and are, a passion of Yuan’s. As a young man, he used to live 10 hours by train from his girlfriend in mainland China, and would wonder whether there could be an easier way for humans to have meaningful connections remotely.

After realizing he couldn’t make the product he was so passionate about at Cisco, he decided to go it alone and founded Zoom. A number of ex-WebEx engineers decided to join him, and within two years they released their first version of the product. They now have 1,702 employees globally.

Usually we are used to unicorn growth coming at a cost, whether that be high financial risk through large raises, toxic culture or complete dilution of company mission and values. As an outsider looking in, it seems that Zoom hasn’t compromised on any of those fronts.

Let’s dig in a little deeper at some of the interesting and unusual things that we’ve learned from Zoom’s filing, and see why it has attracted a lot of commentary and excitement. Is it truly an IPO done right?

They’re profitable

When the filing was posted online, I did what I usually do: scroll right on down to the second page where a high level summary of the financial data is written.

Our revenue was $60.8 million, $151.5 million and $330.5 million for the fiscal years ended January 31, 2017, 2018 and 2019, respectively, representing annual revenue growth of 149% and 118% in fiscal 2018 and fiscal 2019, respectively.

Wow! But here’s the pinch: those excellent revenues and growth are usually fueled by throwing petroleum on to the fire and running at a significant loss. So, on to the next sentence:

We had a net loss of $0.0 million and $3.8 million for the fiscal years ended January 31, 2017 and 2018, respectively, and net income of $7.6 million for the fiscal year ended January 31, 2019.

…they’re profitable?

Silicon Valley is all about growing or dying. If you’ve got an idea that looks like it’s working out, you soak the company and kerosene and set it on fire: hire like crazy; code like mad; sell, sell, sell. If you don’t, you lose. There’s often one chance to become the dominant company in the market, and you don’t want to concede that chance to someone else who can grow quicker than you, no matter what.

What this typically means is that companies that are teeing up to float on the public markets are operating at a heavy net loss: they are choosing to spend more up front for growth in the hope that it pays off in the future.

Just look at some recent S-1 filings:

  • Pinterest, who filed on March 22nd, the same day as Zoom, made $755M in revenue in fiscal year 2018 but a net loss of $63M.
  • PagerDuty, who filed on March 16th, made $79.6M revenue in fiscal year 2018, but a net loss of $38.1M.
  • Lyft, who filed on March 1st, made $2.2B revenue in fiscal year 2019, but a net loss of $911.3M.

Running at a net loss is often a necessary evil to enable the kind of growth required to get a shot at an IPO, which is why each S-1 form often contains a telling phrase:

“We have a history of net losses and we may not be able to achieve or maintain profitability in the future”

That doesn’t sound too promising, however it’s standard fare in technology company filings. You pretty much gloss over it. However, that phrase was nowhere to be seen in the filing from Zoom. They’re in the black. Comfortably.

The web interface is a second class citizen

If you’ve ever used Zoom, you’ll have noticed that in order to join a video call, you are asked to download the native application. And I’m not just talking about a mobile application; I’m talking about a desktop application. Yes, that’s annoying. And yes, most SaaS companies that have floated let you access their service via the browser, as it is the easiest barrier to entry for most users, and also makes the development process simpler: engineers are only building for one platform.

But not Zoom. Instead, you have to do the annoying thing and install their application, or if you’re at work, have your IT team install it: an even higher barrier to entry. Zoom do offer a web interface, but it has extremely limited functionality, and that’s a conscious choice.

Yet, the annoyance of having to install an application doesn’t matter at all if the service is of excellent quality. And it is. We have held Zoom meetings with hundreds of people dialing in, and the quality of the calls has only ever suffered when we have had problems with our Wi-Fi. We’ve never had any issues from Zoom: it’s impressively reliable. The screen sharing functionality is excellent, allowing our engineers to do remote pair programming sessions with their colleagues on the other side of the world.

I presume that the reason Zoom rely on their users downloading native applications is that it gives their engineers more control over the experience of the service: it can exploit, or avoid, particular quirks with each operating system, and the native applications can be built in such a way that take full advantage of whichever proprietary communications protocols that they have invented.

And although downloading and installing software is annoying, and especially painful in a heavily administered workplace, jumping through the hoops is acceptable because when compared to the utter pain of poor quality video conferencing, it’s barely any hassle at all.

They heavily use data centers

One of the bullet points in the summary of risks in the S-1 is as follows:

Interruptions, delays or outages in service from our co-located data centers and a variety of other factors would impair the delivery of our services, require us to issue credits or pay penalties and harm our business…

Oh, that’s interesting. Co-located data centers? Does this imply that Zoom isn’t completely running in the cloud like a majority of SaaS companies?

Scrolling down further, we see the following:

We currently serve our users from 13 co-located data centers in Australia, Brazil, Canada, China, Germany, India, Japan, the Netherlands and the United States. We also utilize Amazon Web Services and Microsoft Azure for the hosting of certain critical aspects of our business.

Wow, Zoom have physical hardware in 13 data centers around the globe! One could consider this is an “old school” way of running infrastructure when compared to how easy the cloud providers make it to scale and replicate services globally at the click of a button. However, in the same way that delivering their service via native applications gives them greater control over the user experience, not relying on cloud providers to obfuscate important low level details such as networking and bandwidth ensures an excellent level of service to the customer.

They make back what it costs to acquire a customer in less than a year

In Alex Clayton’s excellent breakdown of the Zoom S-1 filing he shows how incredibly efficient Zoom’s customer acquisition is when compared to other companies:

Graph courtesy of Alex Clayton. The y-axis is the number of months that it takes to earn back the investment required to acquire a new customer.

It only takes 9 months for a customer to make the company profit. This almost unheard of in SaaS. Usually first year renewals are critical, as customer churn means net loss. But not Zoom. Every twelve month contract signed is money in the bank.

Their staff are happy

Yuan describes his role as “keeping his customers and employees happy every day.” That certainly seems to be true, since Zoom reported a 72 net promoter score in 2017, and they won an Employee’s Choice Award on Glassdoor in 2018.

Zoom have previously written about their internal Happiness Crew, that take a holistic approach to employee engagement. This ranges from holding office events to organizing volunteering efforts for charities.

Yuan noted that in his past, even though WebEx had achieved success on paper, it had come at the cost of morale.

“…even with 14 years of hard work on [the product], I did not see a single happy customer. Every day, I was not happy. My engineers, they were not happy. Every day, it just felt like ‘Oh my God, what happened?'”

Zoom’s culture and hiring is similarly built around trusted interpersonal relationships. It was previously reported that 65% of new hires had come from internal referrals. Yuan even stated that at the beginning of Zoom, he rarely interviewed anyone: the idea was that if he trusts you, he’ll also trust your friends.

This hiring ethos has gone in a different direction to what would be expected from most Silicon Valley companies, with Zoom preferring to hire for potential and trustworthiness rather than track record. Yuan states that their employees can grow with the company as it itself grows, and everyone can learn the same working philosophy together.

Ding ding ding

The impressiveness of Zoom’s S-1 is less because they’re growing faster than other technology companies. It is inspiring because they’ve legitimately chosen to do business in the best way for both their staff and their customers. The financial success is secondary to this mission, yet it is proof that it can follow a great product and culture. Staff and their families win as well as the users.

Zoom have a simple product that does one thing exceptionally well. But simple is never easy. Putting the user experience first forces some tough engineering choices. They use native applications because it gives the best user experience. They use co-located data centers because they give the best reliability of service.

I think that we have a lot to learn from Zoom. Maybe focussing on building a great product and company is enough, after all. We don’t need to be on fire, or in massive debt, burned out, stressed, or ethically questionable to float. Maybe it can be simple as a video call.

Best of luck when the bell rings, Zoomers. Y’all deserve it.

Is software literally eating the world?

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Growth
A Google data center in Iowa. Picture courtesy of Google.

Recently it was revealed that Coca Cola produces 3m tonnes of plastic packaging a year, which is equivalent to 200,000 bottles a minute. This revelation was part of a global commitment led by the New Plastics Economy to raise awareness of the sheer scale of single-use waste that we are creating.

After decades of relentless production of materials that end up in landfills, we are beginning to take notice of our waste problem. This spans from large corporations to individuals in their homes: in 2017 the recycling rate for UK households was 45.7%. There is an EU target for the UK to recycle at least 50% of household waste by 2020. When I was a child, there was no recycling collection at all.

As consumers we are becoming wiser and more critical of the provenance of the products that we are buying. We want to know where our food has come from, what kind of processes have been applied to it, and we are willing to pay a premium to support what is good for us and the environment. The Soil Association report that sales of organic produce in the UK steadily increase each year, despite the fact that it is an expensive choice in a tough economic climate.

Increasing numbers of consumers are applying the same environmental and ethical scrutiny to all physical products that they buy. Doing good for the planet is not only expected of a brand; it can be a major selling point. Patagonia blaze a trail in the clothing industry for acting in the best interest of the environment, even if it means paying a premium for their products: compare the £29 cost of an organic cotton t-shirt versus a £2 t-shirt from Primark. Heaven only knows what sins are committed to get the price so low.

That premium Patagonia t-shirt price ensures that you are getting sustainably produced, non-polluting cotton from a controlled supply chain, and supporting a company that will recycle any of your old garments that you buy from them. In the 2017 fiscal year, they repaired 50,295 garments. A UK sibling to Patagonia, Finisterre, hired a full-time wetsuit recycler in 2017 to deal with a material previously thought unrecyclable.

More than ever we see the connection between the physical products that we create and their detrimental effect on the environment. However, we need to look deeper at what else we buy. We consume many invisible products of an unknown provenance.

I am part of an industry that creates them.

The invisible product

I work in the Software-as-a-Service (SaaS) industry, which means that we deliver our software via the Internet. Customers subscribe to our product and then access it via their Web browser.

This means that no physical items are manufactured or exchanged, which, superficially, could be used as an argument that we are environmentally friendly. After all, we are certainly not manufacturing 200,000 plastic bottles a minute, nor are we distributing tens of thousands of copies of our software via compact disc in plastic jewel cases.

However, much in the same way that consumers are applying closer scrutiny to how their physical products are made, we need to apply the same scrutiny to how our SaaS products are being created and hosted.

After all, technological progress is a waste problem in itself. The technology industry, and our relentless obsession to own the latest, fastest thing, is creating around 55 million tons of discarded electronics every year. Heaps of old laptops. Stacks and stacks of yesterday’s tablets. If it isn’t fast enough, we don’t care. We bin it as it is no longer fit for purpose.

All of this complicated technology is extremely hard to manufacture, and unsurprisingly, extremely hard to recycle. After all, you can’t just mulch and recreate new smartphones in the same way that you can with paper.

“But,” I hear you cry, “that’s physical technology products. We’re talking about SaaS here!” And you’re right.

Let’s take a little trip down memory lane about how we used to do things before the cloud came along.

Before the future

During the time when cloud providers like Amazon and Azure were not around, we used to run our purchased servers in rented racks in data centers. To those that are just getting into startups and technology, this idea seems bizarre. Buy and physically install servers? Madness!

Yet, what it meant to physically buy, install, maintain, and then, after 4 years or so, send the machine away for dismantling and recycling, was that we had greater control over our supply chain of delivering our service to our users.

If a customer wanted to know what the impact of our platform was on the environment, then we could tell them where we bought our machines from, where they were manufactured and in which country, who installed them, and also where we sent them for recycling after they were out of warranty and replaced. Additionally, if we wanted to probe to find out exactly what our power drawdown was, how the data center sourced that electricity and from which type of energy source, we could.

There was a level of transparency in the close relationship required between technology company, data center and hardware supplier; much in the same way that we like to know which farm our eggs come from, and whether the chickens are free range and live good lives.

The future is now

If you were starting a company now, you’d be mad not to use cloud providers. You don’t need to worry about data center procurement and signing contracts, nor peeling through binders full of hardware specifications to pick out the right machines to order, and certainly not hoofing them out of a truck and wiring them in. You don’t need to worry about fixing them when they break.

The beautiful world of AWS, GCP, Azure and their siblings is such that if I want to run some software that I have created, I just create an account, put in my credit card and click a few buttons. I now have some compute, addressable globally, for as long as I want to pay for it, and the provider looks after the machines for me. Wonderful.

However, given that cloud usage is rising dramatically, one could argue that we are putting all of the responsibility of the environmental supply chain of our businesses into the hands of the cloud providers. I may know the rough location of the AWS data center that my product is running in, but do I know anything about where the machines are procured from? I don’t. Do I know about how energy efficient data centers are? Only as much as I’m told. Do I know much about where the machines go after they’ve broken or have become too slow to keep up with modern demands? Nope.

Economies of scale

It would be unwise to point fingers and say that because we don’t know the secret inner workings of our cloud provider operations that there are decisions being made that are bad for the environment in terms of power consumption and physical waste. The procurement, installation, maintenance, energy usage and eventual recycling of hardware all affect the bottom line of our cloud providers, so we could assume that they are making smart decisions. After all, these companies are run by smart people. If anyone knows how to design and implement an efficient data center operation, it would be Amazon or Google, not me.

The economies of scale would predict that the cloud providers can do a much better job of running data centers than we would individually. Just look at how spot instances give customers a way of using any available spare compute resources at a given time, thus ensuring that less CPU cycles – and hence electricity – goes to waste. Also note how technologies such as Kubernetes have grown out of Google’s effort to most effectively utilize their fleet of machines.

But, in the same way that Patagonia can expose their supply chain details to the market and consumer as an act of doing good, it is concerning that major SaaS companies such as Netflix cannot. Their supply chain is delegated to the cloud provider who we can only assume operates in the best interest of themselves, society, and the environment. As more startups begin and scale up in the cloud, more of our industry is relying on the cloud providers to make the right choices for the planet.

So, tell us about yourself

As of February 2019, the market share of the top 3 cloud providers is as follows:

  • AWS: 32.2%
  • Microsoft Azure: 16.5%
  • Google Cloud: 9.5%

Alibaba account for 4.2% and IBM Cloud 3.6%. The others make up 33% of the total share. I looked on the websites of Amazon, Microsoft and Google to see what they publish about the environmental impact of running their platforms.

AWS report that they have a long term commitment to achieve 100% renewable energy usage. They claim customers can reduce the carbon emissions of running their applications by 88% in AWS compared to doing so themselves on-premise. In January 2018, AWS claimed to have achieved 50% renewable energy usage. They have also completed a number of renewable energy projects, such as the installation of solar farms and wind farms in the US. Information on how AWS procure hardware is limited, since they are now in the business of building their own hardware, which, of course, means protected IP. It was reported that the main driver of rolling their own hardware was cost and reliability. What this means for the environment and recycling, we don’t know.

Azure achieved carbon neutrality in 2014 and claim to “exceed the industry average” for power usage effectiveness. They also claim they are committed to a future of 100% renewable energy. Similar to Amazon, they also build their own hardware, but additionally list efficiency and environmental sustainability as core drivers alongside cost and reliability.

Google make similar statements about renewable energy commitments, and claim to have purchased the most renewable energy globally (to offset usage, rather than power their platform) when compared to other large companies. They also have renewable energy projects in the US, South America and Europe. In 2016, they announced a commitment to achieve zero landfill waste by using hardware as long as possible.

All of this sounds great. But how much can I prove is true?

Who watches the Watchmen?

As an individual browsing through websites and white papers, it is hard to form an objective opinion about how well our large cloud providers are sticking to their commitments. In 2017, Greenpeace published a report on the environmental impact of major technology companies. The scorecard from this report is below.

The scorecard for the largest companies in the Greenpeace “Clicking Clean” report.

Although nearly two years have passed since the report was published, there are some interesting observations:

  • There are a surprising amount of C-F ratings in categories for many of these companies.
  • The rating of AWS doesn’t match the impression that I am given via their website, although they may have improved significantly since the report was published.
  • Google’s own claims seem to match what the report suggests.
  • Alibaba, Baidu and Tencent do not score well at all, which is a concern with China’s booming technology industry.

Intentions versus reality

So who do we believe when it comes to environmental impact of our cloud providers, and hence all of the major technology companies that are running on them? It’s hard to tell. No provider would openly say that they are doing a bad job and that they are doing nothing about it, yet intentions mean nothing without action.

With the technological challenge of providing convenient cloud platforms at scale being extremely hard, and with reliability and cost driving cloud providers to build their own industry-secret hardware, we can only hope that their commitment to a green future is true. We may never be able to see inside the black box.

If we ever do, we may be in for a shock. Many in the UK were shocked to discover that two-thirds of our plastic recycling is shipped abroad to countries such as Malaysia, Vietnam and Thailand. This is in stark contrast to the preconception that our washed milk containers were being just being driven down the road to a recycling plant. It is hard to undo what we create.

Given that we will probably never get a truly transparent view into how the cloud providers source, build, power, maintain and recycle their machines, how can we be sure that we actually are doing the right thing for our planet as we increasingly rely on other companies to run our own?

As creators of technology, we need to ask whether our progress is antagonistic to the place that we call home. As customers of the tech giants, we need to lobby for transparency of our supply chains, and ensure that we’re putting back more into the planet than we’re taking out.

After all, the software is pretty useless without us.

Surely we’re more than our jobs

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Growth
Photo by Jon Tyson on Unsplash.

So what do you do?

There is a house for sale two doors down from where we live.

At the weekend, I was working outside of our garage, filling the car with scrap wood from an internal wall that we had demolished.

A man, who I would place somewhere in his forties, left his parked car and approached me. He had seen the listing online and had come for an initial drive by. After telling him what I knew about the area, such as the levels of quiet and the schools, he asked me a question:

“So, what do you do?”

It’s such a simple question. But it’s loaded with many implicit sub-questions in the context of somebody thinking of buying a house and becoming my neighbor:

  • What kind of status do I have?
  • What kind of money might I be earning, as a signifier for the greater socioeconomic status of the area?
  • Am I doing something that is respectable, insofar that it might reflect on the kind of neighbor that I am going to be?
  • Am I going to be making noise during the night, or am I likely to be asleep like most people who work standard office hours?

I’m sure that he didn’t intend to make me dwell on the motivation of asking this question so deeply. Yet, the fact is that our work identity means a lot in society.

But what actually is a work identity? How is it formed? Can it ever be problematic?

Work identity

Have you ever met somebody new and have had that same question asked of you? What kind of reaction did you get in reply? Did you impress, or was it an “oh”?

Have you ever paused to think why it even matters what you do for a job, given that you may be meeting someone in a social context, rather than work context?

Whether we like it or not, work defines a significant portion of our identity. We may be an engineer first, a father second, then a cyclist, then a brother in our own internal hierarchy. A work identity can even become a person’s entire identity: consider entrepreneurial culture, and the perception that successful entrepreneurship implies an entire way of life.

Work identities, and how we relate to them consciously and subconsciously, can cause conflict within us. We should aim to become more aware of them and how we can try to work with some of the problems that they bring.

But who am I?

How work identities exist in tension or conflict with oneself and with other people can be challenging. The field of work identity is broad and fairly academic, but from my own experience as a manager and leader (cough, I hate describing myself as that), I often see people struggling with some common issues:

  • The work identity shift from being an individual contributor (IC) to a manager.
  • Balancing work identity with non-work identities, such as being a parent, or carer, or friend.
  • Mixing authoritative work identities with flat company cultures. Am I someone’s friend or colleague?
  • Dealing with role engulfment which is where one’s work identity becomes their primary identity, and the life conflict that entails.

Let’s have a look at these in turn.

The shift from IC to manager

“Oh, so now you’re their boss?”

This is the primary work identity conflict that I see, especially in new managers. Making the transition from IC to manager involves the undertaking of an entirely different role and identity.

  • They are now responsible for some number of staff and their performance as well as their own.
  • They are also likely responsible for some conceptual area, such as an engineering team or some part of a software application architecture.
  • They now have a new set of peers, subordinates (cough, I hate that word) and more senior staff that they report to.

Their status in the organization has changed, and hence their work identity needs to reform.

There are many questions. How should they act towards their manager, their peers, and their own staff? Should that be the same or different? Are they now managing people that were previously their peers, or even their friends? How is that going to form how they think about themselves and how others think about them?

Some people can naturally flow between being friendly, authoritative, relaxed, directive and back again. However, this is a learned skill.

Some new managers fail to embody their new managerial work identity and thus fail to establish any authority, making them ineffective. Some will embody a caricature of a manager – with no true conviction – which can be laughable and Alan Partridge-esque.

I’ve found that there are two good places to start when learning the ropes as a manager:

  • Going through a contracting exercise to more formally establish relationships between their staff and with their own manager.
  • Reading and practicing the principle of Radical Candor, which is the closest thing I’ve found to embodying the right level of candidness and empathy required to operate well as a manager in challenging organizations.

Merely doing exercises and reading around embodying a managerial identity isn’t enough: being able to turn up and down different facets of your personality at given times, and thus form a strong work identity that you are comfortable with, takes real repeated practice.

New managers may need to resist the urge to shy away from social activities, like sitting down to lunch with their team, or consciously practice giving uncomfortable feedback even if it initially feels unnatural and scary. With time, switching between identities becomes easier. But it’s never easy.

Balancing work identity with other identities

There is a tension between your work identity and other identities in your life. A person may be the CEO of a company during the day, but a mother and partner during the evenings and weekends. These different identities don’t always get along with each other.

Although there is an argument that achieving work-life balance can be impossible due to the demands of modern careers, the scheduling of time as a CEO and a parent and a mother is straightforward: the main tension comes from having to intermix work identities with personal identities.

The parent identity that is singing along with Pepper Pig, only to get interrupted by a work call, must then switch to the work identity of the CEO, if only for a brief moment, and then back again. Becoming expert at this comes with practice. Initially, it can take a lot of time to switch into and out of one’s work identity, and can cause stress and conflict between the self and others.

I used to struggle with switching identities most when the apartment that I lived in was less than 5 minutes walking distance from the office. After particularly intense work days, my partner would notice how I “wasn’t myself” for a period of time after work, or that my interactions with her were different (typically colder and more robotic) to how I acted at the weekend.

With time I came to learn that it would take me a while to switch away from my work identity – which was that of a new manager in a fast growing startup – into my identity as a partner and peer.

If you struggle with this, there are some strategies that I found helped me:

  • Consciously deciding to leave my work identity at the office, or at the computer, and telling myself to switch back into my home identity. This may sound contrived, but it worked. “OK, I’m done. Time to start my evening.”
  • Putting some physical activity between the end of the work day and the beginning of the evening. This could be cycling or walking a longer route home from work, or it could mean going to the gym. The physical exertion and subsequent release of endorphins resets the mind.
  • Taking some quiet time when I got home. Just five minutes of meditation helps greatly.

Mixing authoritative work identities with flat company cultures

A common source of tension is the contrast between a company’s desire to have an open, friendly culture that feels like a flat hierarchy and the conflicting authoritative work identities that exist within it.

Does a culture of everyone being equal cause issues when the boundaries between traditional friendship and org chart status blur? Our company has a friendly culture, encouraging everyone in all parts of the organization to take part in social activities, and many close social groups exist both inside and outside of work.

However, the more senior one becomes in an organization, the more carefully one must shift between different identities in their persona. Embodying a friend identity whilst out for drinks with one’s team may need rapid shifts to the manager identity when talking about a sensitive work-related subject, and then back again to being a friend when switching to a conversation with another colleague.

The difficulty of constantly shifting these identities can sometimes explain why senior people in an organization find work-related social events hard: they have to be able to embody the right identity at the right time in order to uphold their professional position, but also be able to have fun. It can be exhausting, and I’m sure we’ve all dealt with that colleague who’s had a little too much to drink.

Additionally, those in management positions who are not able to shift between identities with ease can find it hard to get on in flat company cultures. Either they are unable to shake the manager identity and thus feel excluded from the fun, or they are unable to turn on the manager identity when it is needed, lessening their authority and having people question their competence in their role.

It really isn’t easy.

Preventing role engulfment

We have spent most of the article thinking about the difficulties of switching between work and other identities. But what happens when, over time, someone’s entire identity is defined by their work?

There is a term for this: role engulfment. It is used to describe when one role – or identity – grows to become the dominant aspect from which one views themselves. This can happen in any context, not just work. For example, people may attach a negative role to themselves which they begin to define themselves with, such as being ill, or badly behaved, or unable to learn.

In a work context, role engulfment describes the situation where someone begins to identify themselves as wholly the role they perform. We mentioned the entrepreneurial identity earlier on in the article, and how it can engulf one’s lifestyle.

Someone may view themselves primarily as a CTO, or CEO, or a senior engineer. Given how work-centric the younger generation of our workforce has become, this may be happening more than ever.

It is, however, dangerous:

  • Choices that one makes for themselves are influenced primarily by the work identity. They may not be choices that are in the best interest to the whole person. Take burnout for example: working to the point of illness in order to achieve a promotion may satiate the hunger of the work identity, but it certainly does not help the whole individual.
  • It lessens the amount of effort that a person spends on their other identities, such as a father, mother, sibling, friend or carer. The work identity begins to trump the others because the reward is seen as more fulfilling and more aligned with the true self, whilst other aspects of a person’s life suffer. Maybe visiting family isn’t as important as embodying the successful executive director and working through the weekend instead.
  • When an individual forms their predominant identity around their work, then what happens if their work is to suddenly go away? Redundancies can strip a person of their identity and not just their income. These situations can be dangerous for a person’s mental health. Many retirees suffer greatly with their work identity removed from their life.

So, what can I do?

The concept of work identities, and the other identities that they coexist with, are – in my opinion – not talked about enough in our industry. However, I think that understanding them more and being more conscious about how we live with them can benefit us all.

In a world where one’s job is the implied answer to “what do you do?” we need to understand that work is only one part of our whole identity. Humans are so much more than our jobs.

I am also a partner, friend and son as well as the VP Engineering role that my colleagues know me as. Although the job title sounds lofty and important, and one could suggest that it should become more of me, the other identities that I embody are just as important – if not more important – to ensure that I am living a balanced and well-rounded life.

Which identity do you associate yourself with most?