Brand equity vs. personal equity

This week I officially turned down Goldman Sachs’ full time offer. As an HBS student with no prior business experience who has turned down offers from both McKinsey (summer) and from Goldman Sachs (full time), and is left with no offers on the table, many of my classmates would probably wonder about my mental state. To help explain my highly questionable thinking, I’ve come up with a framework for career decisions: building brand equity versus personal equity.

During my summer job search, many people recommended that I seek out firms with high “brand equity” – Goldman Sachs, McKinsey, etc. By placing those names on your resume you all but guarantee that future employers will find you highly desirable and they also buy great option value. Therefore, in addition to being tremendous learning environments, those firms on your resume buy you great name recognition, or “brand equity.” However, brand equity makes one desirable because of the places one worked, not necessarily for his truly independent personal value. If hired after a few years from one of those firms, one is hired as “that McKinsey consultant” or as “that Goldman banker.” Not usually as “that guy who accomplished XYZ.” The equity one accumulates while working at those firms is therefore very strong brand equity. It’s the same thing that is accomplished by going to a great undergraduate school, or by attending Harvard Business School; great name recognition on the resume, and a tremendous learning experience.

At some point in one’s career however, one begins to develop personal equity. At places like McKinsey and Goldman, that might take place after 7-10 years, when you begin to serve as a thought leader and create client relationships based on who you are, not based solely of who you work for. A partner at those types of firms has very slowly built up credibility and unique individual skills, and others want to do business with that person at least partly for who he is as an individual. For the first 5 years or so in one of those firms however, one is mostly known for the name of his firm, and his commoditized (but highly desirable) skill sets.

So how does one build personal equity? One builds personal equity by creating value mostly through his or her personal accomplishments, not just through the wagon he's decided to hitch himself to. Most MBA students transition to this role after several years of building brand equity at a larger firm – which is extremely reasonable and indeed highly recommended. By going to a larger firm first, you build brand equity and a good fallback position. You also have the privilege of learning under the supervision of great managers and savvy business leaders, all while developing your own style and skills in a relatively low risk environment. This is therefore a highly attractive option and certainly not one I would discourage by any means.

Perhaps however, it is because I’m a little older than most of my peers, or perhaps it is because I’ve inadvertently spent my whole life building brand equity and feel that the opportunity of adding more is only marginal – that I feel ready to build personal equity coming out of HBS. I’m ready to build and create value by the sheer will of my individual hands and mind, not simply by serving as additional leverage for a larger business. I eagerly await the day where my accomplishments will be limited by my own personal ability, and not by my job description.

One way to apply this philosophy is to do something entrepreneurial, which is a much riskier path to pursue. There might be no safety net, and the average expected economic value becomes both lower and the range much larger (in both the upside and downside). This second year at HBS is therefore going to be no easy sailing.

I am encouraged however, by the fact that the accomplishments I am most proud of in my life have all come through struggle, challenge, and uncertainty. I’ve never regretted pursuing the path less traveled, and I measure my success by the fulfillment of the journey, not by the ultimate destination. In the end, all we have is one extremely short life – you might as well live it the way you want to.