The High-Performance Talent's Dilemma: Why Outstanding Performance Doesn't Always Lead to Exceptional Pay and How to Achieve it Nevertheless

Introduction

I've been thinking about my main message in Deliberate Diligence lately. What's the point I feel has to be made? Sure, on the one hand, it's simply a counter-argument to all the charlatans out there who claim that success is achieved through lifehacks, tricks, and simple, replicable business models.

Nonsense! Success is achieved by deliberately setting goals, converting those goals into daily executable habits (=systems), and finally exercising diligence, consistency, and resilience in the day-to-day execution of the resulting plan.

This is the Deliberate Diligence Mental Model empowering you to achieve any goals you set for yourself.

But for what Purpose? And more importantly: for whom? For yourself or someone else's agenda?

As a High-Performance Talent, I had a costly thinking fallacy in my early career.

As a young professional, I made a costly mental error, wasting ten years of extra daily mental capacities besides the regular 9-5 work.

The thinking error is as follows:

"If I put all of my hard work and energy into my main job, the company will appreciate it and reward me handsomely, allowing me to advance quickly in my career and get rid of all money-related problems." – My way of thinking about career 10 years ago.

I practically lived for the company and worked on my projects every evening and weekend for the first ten years of my corporate job. The sheer investment of time and energy allowed me to work two or three positions in the Group simultaneously, with excellent results and outcomes.

Was it worthwhile? Both yes and no.

On the one hand, I quickly advanced up the corporate career ladder. I've done everything from software developer to project manager, digital consultant and strategy consultant to Head of Innovation and Corporate Intrapreneur. I feel highly valued by the company and have received great creative freedom. The company allows me to engage in purposeful activities that can create a genuine impact.

But what about the pay? Considering the needs of High-Performance Young Talents (like me, ten years ago) interested in more than just a comfortable living and a sense of fairness in their employment, the answer has to be a "no".

As a High-Performance Talent, you expect a meteoric rise from your starting salary to a salary where you don't have to worry about money, according to your level of input effort.

However, this is a fallacy and will never occur. Unless you work at Google or Facebook, which are incredibly high-margin and scaling businesses in which you play a key role, the reality is that corporations only pay you enough to keep you from quitting.

The corporation's primary goal is to keep the cost of human capital as low as possible to optimise margins or keep the business model viable in the first place.

From my point of view, that's fine, too; it's the company's mission. It must generate profits and make the best use of its resources, including you. That's what companies are here for.

It's economically fair, but you have to know that and incorporate that in your expectations regarding your salary and decisions when looking for alternative income streams.

That's also a vexing issue in salary negotiations. As a high performer, you are likely also a company's principal agent, which means you think from the company's shoes. You intellectually understand that your boss cannot give you a 15% raise but only a 5% raise. You know you can't get a salary increase when the market is in recession. You also understand the logic and challenges in your boss's processes.

But now what? Which is more important to you: the company's bottom line or your personal aspirations to make a lot of money and solve all your financial woes?

For the first decade of my career, I made the fatal mistake of agreeing with the company's line of thinking. Worse, despite my above-average results, I felt embarrassed for even having ambitious goals. It feels like Stockholm Syndrom! I hate myself for feeling ashamed about my monetary aspirations.

Well, I recently realised the mistake and started to correct it—better late than never, I suppose.

In my experience, many of your other workers go wrong here. They leave the company because they believe they will be happier working for a competitor.

Yet, that is not true. Naturally, there can be alternative and superior cultural norms. But, the dynamics of your wage are consistent across all firms. You change jobs, get a temporary pay raise, and then find yourself back where you started.

I now understand the best course of action for a high-performance talent, and in this article, I'll briefly describe the solution I found.

The corporate world's salary limitations

Let's first quickly go over the possible causes of this discontent among ambitious high achievers.

Young High-Performance Talents believe that outstanding performance at work will translate into exceptional pay.

Your effectiveness will increase significantly, especially in the first 10 to 15 years of your career, thanks to compound effects and expertise made possible by accepting numerous projects you'll eventually successfully manage.

You don't get 5 or 10% better every year, but you're more likely to get 25% better every year as you get better at predicting things, finding shortcuts, and generally knowing the company inside and out. Also, you'll go above and beyond and won't stop at a 40-hour work week. You will work 60 to 70 hours a week for the business because you are a glutton for impact and experience, which will further increase your output.

If you accomplish that, you can anticipate a similar rate of pay growth. After all, your pay should be in line with your performance and productivity. Right?

Wrong! The corporation won't give you more than is required. The firm might not even want you to work more than 40 hours weekly. They usually want you to deliver slightly above-average work and reward you with above-average pay. The rest of your reward comes via appreciation (which is quite remarkable)

Hence, you will never receive a pay raise of greater than 10% unless you have better offers. I guess a good salary growth for high-performances across 10yr time frames will typically be 6.5% on average or 4% when inflation is accounted for.

That's what you see in the picture above. There's a corporate salary ceiling that - no matter your effort - you probably won't break. It might be higher and lower, but it will flat out eventually and not directly correlate with the level of effort.

How a side hustle can unlock your full earning potential

I have given the possibilities a great deal of thought:

Moving to a different company is not an option because the same dynamics apply there, as I described above.

You could resign and start your own business, but I've discovered that this is one area where the marketing claims of those in the market who say this is all very simple and anyone can make a (6-figure) turnover are just not accurate. It's more complicated than you believe in selling products, finding a legitimate need, and genuinely adding value.

Notably, the frequently praised 4-hour workweek and related company models are not without their drawbacks. Even if you succeed, collecting a sufficient turnover usually takes longer than you anticipate.

Freelancing is likewise not an option because your earnings depend on your time and will eventually reach a ceiling. You are taking on more significant risks, increasing your income level, but not the income dynamics.

What, then, is the answer? Considering both my 11 years of corporate expertise and my experience as an entrepreneur, the best course of action is as follows:

• Your primary source of income is a corporate position with a business that fits your cultural preferences. An organisation where you can perform valuable work and receive recognition and a sense of community is more important than one that offers the highest salary. You can make highly emancipated decisions now that you aren't optimising for pay.
• If you are a top performer, you have more energy than eight hours daily. Depending on your family's needs, you will have at least an additional two hours and possibly even four for other high-impact activities. Instead of putting these hours (overtime) into your corporate employment, invest them carefully and deliberately in developing a side business.
• As there are no scalable income elements at your corporate work, you try to pick a side gig where your earnings can be leveraged. Leverage might be capital (investments) or intellectual property (such as developing apps or creating content). Yet, because you can't do that with just 2-4 hours a day, you won't be able to leverage through staff. In other words, you will become a solopreneur in your side business, that is, a sole proprietor.

There are no quick victories in this situation, but that is precisely the point of this piece and the error I committed.

I've only recently, at the age of 37, began developing Deliberate Diligence as a side business seriously. And it will require time to return with relevant sales.

In other words, I've lost ten years of my early career that I could have used to gain momentum. That's ten years á 3-4 hours/day, equalling Opportunity Costs of $2m.

It would have been excellent to have a blog like this one, especially during the Corona era. But, I refrained from doing it since I didn't know the corporate wage ceiling at the time and believed I might earn a larger salary by working harder in the corporate position.

Also, if you are a high achiever and older than I am, say in your 40s or 50s, what about that? Then get going anyhow! Because such a side gig is fantastic for other reasons outside the financial incentive.

Take control of your life and create more fulfilment in your career with a side hustle.

The article's main point centres on your pay, but I've since realised that a side job has additional benefits as well:

• Your corporate work involves a lot of dependencies. It would be best if you synchronised everything with many stakeholders, regardless of the stage of your career. You occasionally reflect on weeks when you invested 20 hours discussing directions and feedback loops for a deliverable worth 1 hour. You become frustrated and agitated since you are powerless about this. You can restrain your sense of control over your side job because you have complete autonomy. Your directions. Your standards. Your errors. Your achievements. It's incredibly liberating.
• You typically develop a specialisation in your corporate career. I have a lot of expertise in areas related to digitalization, innovation, and transformation. PowerPoint is my thing. My side job forced me to broaden my thinking and develop new generalist abilities. How do you create a quality product? How do you make a sale? How do you construct strong narratives? In the past few months, I've learnt more than I have in years.
• You become more interesting and have more conversation starters. Throughout the past ten years, I have frequently felt like a robot. Highly skilled in my areas of expertise, but who wants to discuss these all the time? I was an amorphous, ill-defined machine to my coworkers. My side job forces me to express my character, beliefs, and goals more. This sparks a lot of fascinating and thought-provoking conversations.

In general, I can say that since I've been following my own agenda, I've also been happier and more content in other spheres of my life. I feel I'm on the right track now. Who knows, maybe my main objective won't even work out, but getting there will have been a fantastic experience rather than a mistake.

I've also grown a lot more laid back with my corporate position. I used to spend every ounce of my daily energy on work problems. At all costs, meet deadlines and milestones. I am now much better at assessing priorities, urgencies, and significances and much better at balancing the concerns of others against my own agenda.

Tips for starting a side hustle

In the upcoming weeks, I'll explore how you may apply the Deliberate Diligence philosophy to create your own side business.

Nonetheless, the following is a first brief list of what you must accomplish:

1. In your corporate employment, shift your perspective from that of an ordinary employee to that of a principal-agent. With this mentality change, you can significantly influence your corporate work while using less energy. Your Impact will 10x. Your coworkers and supervisor will appreciate it and offer you the freedom to explore your side business.
2. Examine the precise way you are presently spending your time. For three weeks, measure it to the nearest 15 minutes. Sort the ways you spend your time. What is a time waste, and what is not? For instance, I've discovered that most of my activities between 21:00 - 00:00 were a waste of time. I developed the practice of going to bed at 9 p.m. and reading for an hour before that, allowing me to add three additional high-quality work hours for myself before my corporate job.
3. If you have a lot of willpower, start working on your side gig at least partially BEFORE going to your corporate job. Start as soon as you awaken in the form of a morning routine. You won't typically be able to make any serious progress if you plan your side business at night.
4. You must learn to control your agenda. You must fight off any pointless distractions to protect your time and priorities. You have to actively protect yourself against having your attention diverted; it doesn't automatically happen.
5. The Pareto principle must be used in every aspect of your life; otherwise, you won't have the time or the energy for your side job. Perform only the 20% of actions that produce 80% of the desired results. You don't have time for frills, pleasantries, or optionalities anymore.
6. Your default answer will be similar to an insurance provider's when a claim needs to be paid. "No". The secret is to refuse both undesirable and desirable things. You have no choice; maintain your focus and avoid diluting your mental capacities.
7. Prioritize Family, Health, Exercise & Nutrition over your corporate job and side gig. We discuss how to handle your time besides those core commitments.

In the coming weeks, I'll post additional in-depth how-tos and step-by-step instructions on developing your side business. Of course, I'll assist you in finding a profitable venture that matches your interests. I'll advise you on how to avoid the blunders I've made.

Are you prepared for this trip?

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Conclusion: The power of a side hustle for ambitious individuals

In this article, I shared my experience as a high-performance talent in the corporate world and the fallacy of believing that outstanding performance at work translates into exceptional pay.

I realized that a side hustle is the best way for high achievers to unlock their full earning potential and take control of their lives. Individuals can successfully balance their corporate job and side business by deliberately setting actionable goals, converting them into daily habits, and exercising diligence, consistency, and resilience.

Shifting one's perspective from that of an ordinary employee to that of a principal-agent, examining how time is spent, controlling one's agenda, and prioritizing family, health, exercise, and nutrition are some keys to achieving success in a side hustle.

Ultimately, individuals can achieve personal fulfilment, develop new skills, and unlock their full earning potential with deliberate diligence.

Best regards,

-- Martin