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'70s rebellion and the roots of tech's reputation for meritocracy

Silicon Valley prides itself on being a meritocracy. But how did it get that reputation?

Every industry has buzzwords. Some of Silicon Valley’s most recognizable include disruption, innovation, and monetization.  Big words with sometimes slippery definitions. 

One word that has been a perennial favorite in Silicon Valley is meritocracy. It comes up often when tech entrepreneurs describe the culture of their industry. Today, meritocracy suggests a grand set of ideals: that talent trumps all else; that with a great idea and hard work, anyone can succeed no matter where they came from. 

But when the word first popped up in Silicon Valley in the 1970s, it was used in a much more narrow and "very specific way," says Leslie Berlin, a historian for the Silicon Valley Archives at Stanford.

Back then, she says, meritocracy was mostly used to describe a corporate management style.

"It was used in contrast to what was seen as the more rigid, east coast model," says Berlin. "Unlike older, more stultified companies, where what you earned was directly related to your job title and maybe how many employees you managed and how long you had been at the company, this new model would recognize the contributions of the people who made the biggest difference."

In this new model, rewards were -- at least, ideally -- doled out "regardless of what someone's title was, whether they managed someone, or how long they had been at a company," Berlin says.

It was a management style championed by Robert Noyce, one of the inventors of the microchip. He was a man with a libertarian bent who earned the nickname "Mayor of Silicon Valley." Early in Noyce’s career, he had been frustrated at companies with rigid, top down management structures, so when he started his own company, Intel, in 1968 he tried for something different. 

"There is a new management style evolving, looking at human worth rather than the usual autocratic organization of the company," he said in an interview reflecting on that time. "It's much less autocratic, much more democratic." 

At Intel and soon, many other tech companies, employees were offered stock options that could increase in number and value the more someone contributed.  Bosses often sat in cubicles alongside their workers.  And there were the all important Friday "beer bashes," says Berlin. Everyone, from the workers on the manufacturing line to the CEO would show up, she says.

"You know, you stand around and sip a beer and talk to people. It was great," remembers Len Yates, who developed software in the early 1980s at Tandem, a company based in Cupertino that was famous for its beer bashes.

"People would throw out new ideas there, bash around new concepts," he says. Before Tandem, Yates had worked at IBM in Texas. Compared to his old job, Yates says in Silicon Valley "people were much less concerned with status" and much more concerned about "getting the work done -- and watching their stock options grow."

Stock options and beer bashes are still very much part of Silicon Valley today, though they have evolved. For starters, now that most hi-tech hardware is made overseas, there aren’t many folks from the manufacturing line at the parties. Meanwhile, the idea of meritocracy has morphed from a management style to a much bigger, and more contested concept that encompasses ambitious "anyone-with-talent-can-make-it" claims. 

Talent and hard work often do trump social status and pedigree in Silicon Valley today, says Berlin. But, she cautions, "I don’t think the tech industry is a magical place, that there aren’t networks and there aren’t connections and there aren’t helpful people to know."

About the author

Krissy Clark is the senior reporter for Marketplace’s Wealth & Poverty Desk.

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