Silicon Valley is the new Wall Street.
The center of financial gravity has shifted from New York to northern California. Tech stock valuations have shot through the roof, initial public offerings are oversubscribed and venture capital firms are pouring money into startups in hopes of finding the next Facebook or Twitter.
At first, the shift happened slowly, as companies like Google and Apple came out with slick new products and services, earning them their place among traditional tech titans like HP and Cisco.
But the trend accelerated in the wake of the Great Recession. Financial services firms found themselves at the center of the deepest downturn in decades. Then they found themselves in the crosshairs of regulators eager to avoid the next crisis and consumers looking for someone to blame.
They’ve struggled in the past few years. Blue chip banks like JPMorgan Chase, Citigroup and Wells Fargo have all seen earnings drop in 2014.
But more importantly, they’ve seen their status as employers of choice slide, something that will have real consequences long after the pain of disappointing quarterly earnings. The tech titans of the West Coast aren’t just attracting all the cash. They’re pulling in top talent, too.
Wall Street, long the destination for top college graduates intent on making their mark and earning a fortune, doesn’t seem so attractive anymore. For many graduates, a gig at a Silicon Valley firm is a ticket to the top.
So, as we always do as an industry, we’ll hail the new engines of economic growth and pick apart their talent practices to see what we can learn. We’ll highlight how Google is able to attract the best talent and how firms like Amazon.com and Netflix rapidly respond to shifts in consumer demand.
We’ll talk about how these companies have built a sterling employer brand and how they retain employees by allowing them to spend 20 percent of their time on projects that drive their passion even if it’s unrelated to their primary job.
We’ll point to pingpong tables and rock climbing walls. We’ll talk about how the staff yogi deploys the downward-facing dog to help employees manage stress and remain spiritually agile.
Not a conference goes by that doesn’t feature a presentation about how Google recruits engineers or Facebook develops its talent. We’ve written that story in the pages of this magazine multiple times.
But let’s be real. Not everyone can deploy the analytical power to find talent like Google. Most companies don’t have the resources, human or otherwise, that Apple does. There’s a limit to the lessons we can learn from our new corporate leaders.
At the height of its power, Wall Street became the subject of criticism and parody, starting with Oliver Stone’s 1987 movie of the same name and up to Martin Scorsese’s 2013 “The Wolf of Wall Street.” They picked up on some of the more sensational aspects of the culture to paint a picture with broad strokes.
The same thing is happening to the culture of California’s tech giants. HBO’s spring lineup features “Silicon Valley,” a parody of the tech-obsessed business culture from the creator of the comedy “Office Space.”
That’s not to say the lessons from Silicon Valley are invalid. There are many things to be learned from companies that are at the forefront of what is shaping up to be a talent-driven economy, such as think carefully about how you manage talent, spend time and money to do it right and compete fiercely to attract and retain the best people.
The reality is that talent practices are highly idiosyncratic. What works at Apple won’t necessarily work elsewhere. There are things to be learned from today’s tech titans, but they aren’t a playbook for talent management. We couldn’t all pay our employees like Wall Street, nor can we expect to compete with Silicon Valley’s top performers.
There’s no reason we should think we have to. A few years ago, Google figured out the best way to hire people — even with the ability to sift through thousands of applicants and crunch data at an unprecedented scale — is to have an actual person review potential hires.
That’s something all of us have been doing all along.
