Sandra Knispel talking about the study done by American Economic Review.

Two financial economists, from the University of Rochester and the University of Wisconsin–Madison respectively, created a model that explains how reputation, information, and retention interact in professions where skill is essential and performance is both visible and attributable to a specific person, particularly in fields such as law, consulting, fund asset management, auditing, and architecture. They argue that much of the professional services world operates through “intermediaries”—firms that both hire employees (also referred to as “agents” or “managers”) and market their expertise to clients—because clients can’t themselves easily judge a worker’s ability from the outset.

[…]

At the start of an employee’s career, the firm has an advantage, Kaniel and his coauthor Dmitry Orlov contend, because the firm (“the mediator”) can assess an employee’s talent more accurately than outside clients can. During what the authors call “quiet periods,” the firm keeps those who perform adequately and pays them standard wages.

Over time, however, an employee’s public performance—measured by successful cases, profitable investments, or well-executed projects—reduces the firm’s informational advantage. As the informational gap shrinks, the firm needs to pay some employees more because clients are now able to observe an employee’s good performance and hence update their beliefs about the employee’s skills.

“At some point, the informational advantage becomes fairly small,” says Kaniel, “and the firm says, ‘Well, I will basically start to churn. I will let go of some employees, and by doing that, I can actually extract more from the remaining ones.’”

Ironically, to the client these churned—or strategically fired—employees look just as good as the ones whom the firm kept. Churning happens not because these employees have failed but because they may be just somewhat lower-skilled than their peers. Subsequently, churning heightens both the reputation of the firm and of the employees who remain.

I found the concept of information advantage and its subsequent shrinking intriguing.

Will Larson arguing that the role of engineering manager changes based on the realities of the industry. He then goes on to share the core skills (essential to operate in all roles) and growth skills (whose presence–or absence–determines how far you can go in your career) for engineering managers.

The core skills are:

1. Execution: lead team to deliver expected tangible and intangible work. Fundamentally, management is about getting things done, and you’ll neither get an opportunity to begin managing, nor stay long as a manager, if your teams don’t execute.
   Examples: ship projects, manage on-call rotation, sprint planning, manage incidents
2. Team: shape the team and the environment such that they succeed. This is not working for the team, nor is it working for your leadership, it is finding the balance between the two that works for both.
   Examples: hiring, coaching, performance management, advocate with your management
3. Ownership: navigate reality to make consistent progress, even when reality is difficult Finding a way to get things done, rather than finding a way that it not getting done is someone else’s fault.
   Examples: doing hard things, showing up when it’s uncomfortable, being accountable despite systemic issues
4. Alignment: build shared understanding across leadership, stakeholders, your team, and the problem space. Finding a realistic plan that meets the moment, without surprising or being surprised by those around you.
   Examples: document and share top problems, and updates during crises

The growth skills are:

1. Taste: exercise discerning judgment about what “good” looks like—technically, in business terms, and in process/strategy. Taste is a broadchurch, and my experience is that broad taste is an somewhat universal criteria for truly senior roles. In some ways, taste is a prerequisite to Amazon’s Are Right, A Lot.
   Examples: refine proposed product concept, avoid high-risk rewrite, find usability issues in team’s work
2. Clarity: your team, stakeholders, and leadership know what you’re doing and why, and agree that it makes sense. In particular, they understand how you are overcoming your biggest problems. So clarity is not, “Struggling with scalability issues” but instead “Sharding the user logins database in a new cluster to reduce load.”
   Examples: identify levers to progress, create plan to exit a crisis, show progress on implementing that plan
3. Navigating ambiguity: work from complex problem to opinionated, viable approach. If you’re given an extremely messy, open-ended problem, can you still find a way to make progress? (I’ve written previously about this topic.)
   Examples: launching a new business line, improving developer experience, going from 1 to N cloud regions
4. Working across timescales: ensure your areas of responsibility make progress across both the short and long term. There are many ways to appear successful by cutting corners today, that end in disaster tomorrow. Success requires understanding, and being accountable for, how different timescales interact.
   Examples: have an explicit destination, ensure short-term work steers towards it, be long-term rigid and short-term flexible

Will also shares a framework on how to assess yourself on each of those skills.