Marine Sgt. at New Orleans, La. By Howard R.Hollem. Library of Congress collection via Flickr.

How Having Closed Sector vs. Open Sector Career Affects Your Success

Forrest Christian Careers Leave a Comment

Guy Benveniste had a great thought in article from 1977 about “Survival inside bureaucracy” that are even more relevant in today’s New Economy / Creative Class work-world.

Benveniste postulated that there were three different types of careers:

  • Closed sector
  • Open sector
  • Location-dominated

Closed sector careers are what my father generation expected. Your entire career is within a single company; or, if you move, within a group of companies that all look alike. Think a petroleum geologist moving from Mobil to Phillips back in the day. The companies are somewhat interchangeable as they are in the same industry, have essentially the same product (oil and gasoline) and staff in very much the same ways. The experience that is most valued (almost the exclusively valued) is that within the sector. Financial institutions are usually closed-sector even today, as is the military.

What is valued is people who already know the sector, whose work experience has been exclusively in it. The difference between the silos is moot. They would rather have someone who comes up through the ranks, managing totally different groups (going from sales to product to R&D, in successively higher ranked managerial roles, for example). Transfers into these closed sector careers “from organizations in other fields of endeavor in different sectors occurs only in rare instances”, Benveniste writes.

Moreover, in many such closed sector careers, career paths are strongly determined by the status of the initial appointment location. If one is first appointed as an assistant professor in an unknown junior college, the probability of ever being appointed in a large university is low; but if one is first appointed at Columbia, there is a higher probability that one may end as a full professor at Harvard.

Regardless of the current belief that managerial skills are portable, most of the time they are not simply because the work is within a Closed Sector.

Open sector careers focus on your skills rather than your industry. These specialist skills are portable across sectors, and experience inside any particular sector is irrelevant if it is not with those skillsets. You move up as you gain reputation for competence and knowledge in your specialist profession, and your reputation built in one sector is portable to a position in another sector

The level one occupies within an organization is related to the nature of the skill: ‘She is a top-notch personell manager — has a background in government service but worked several years with a private utility . . .’ Certain skills permit upward mobility within organizations: ‘He started as a production troubleshooter for an electric firm, later became a negotiator in international sales and, ultimately, became their lobbyist in Washington, DC . . .’ [ellipses his?]

Your first appointment in a Closed-Sector Career is used as proxy to determine your growth trajectory. Someone hired as a front-line manager, say, will be seen as quite less capable than someone hired into the headquarters as an assistant. If you are hired into a managerial position, the other managers above you will assume that you have the complexity to advance according to the same rate they advanced. They don’t have to bother assessing you personally, and thus saving me from having to do some of the real work of management (assessing capability). Your initial rung determines the ladder you will be on the rest of your career.

If you are in a Closed Sector Career and started in a low position, you will never work your way up. Quit and move to a different field.

Also, you will have to get them to think that you were paid more than you actually were, since your pay will be seen as a proxy for capability in the same way.

Warren Kinston would contrast Open vs. Closed Sector work as being in at least two different work domains. Closed Sector work is primarily within the Organizational Life Domain. This “language of work” is the traditional Organizational Man where one climbs the ladder within the organization. Contrast this with Disciplinary Life work, the work of people within what can be loosely seen as academic disciplines. What is important is that you advance in your field, much as Benveniste describes for Open Sector jobs.

All Creative Class people work outside the Organizational Life domain. Most software developers are too. You can feel the difference between those who are simply Organizational and those that are truly within the Disciplinary. The latter are the ones constantly looking to work on “something interesting”.

What’s interesting to me is where an Closed Sector company requires the services of Open Sector skills. In Banking, this is often seen in higher-level IT work. Enterprise Architects at one firm I’m aware of are managed by someone who is really a Banking person. She will later be moved into the CIO role and from there into another C-suite level position. What matters is her experience in the banking industry not her experience with Enterprise Architecture.

Insurance companies, to take a similar example, rarely if ever hire IT personnel from outside the industry and promote solely within the company. Because Software is an Open Sector Career, this means that most old-school Insurance companies can be easily beaten by simply doing what everyone else does and create a development group that is clearly Open Sector. It’s how companies like Progressive and GEICO in the U.S. have been able to chomp up so much of State Farm’s marketshare. State Farm’s only response that will work will be to spend massive amounts to hire outside development firms, but they will still be managed by internal managers (with proper Closed Sector careers) and thus have greater risk for ineffectiveness.

This is made worse because all Developers in old-school insurance companies must come in at the entry level and work their way up. Since IT is considered blue-collar work, they cannot get promoted, nor will their functions be compensated properly, even if they are working with long Time-Spans of Discretion.

This tension between Open Sector Careers and Closed Sector Careers often creates an interesting dynamic.

Benveniste, however, gives us one more type.

Location-dominated careers are controlled by desirable locations [e.g, city, state, region]. It is not the sector or skill that matters. The relevant progression is from less desirable to more desirable locations…

One can imagine someone in Cinema who is working in Albuquerque wanting to move closer to Hollywood, the center of the action. One can also imagine someone who simply wants to be “closer to my family out East” and takes job after job to get progressively closer to where they live.

NOTE: This article expands (considerably) a blog post from 2004.

Cited: Benveniste, Guy. “Survival inside bureaucracy”. In Markets, Hierarchies & Networks, ed. by G. Thompson, J. Frances, R. Levačić & J. Mitchell. London: SAGE Publications, 1991 [1977], pp. 141-

Image Credit: Marine Sgt. at New Orleans, La. ca. 1941-1945 by Howard R. Hollem. Library of Congress collection.

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