7 ms·

The Coming Collapse of Average Managers and Employees

69 points by dekayed 14y ago

btilly 14y ago
It is good to see this discussed, but the principle is not news. In http://www.amazon.com/First-Break-All-Rules-Differently/dp/0684852861 http://www.amazon.com/First-Break-All-Rules-Differently/dp/0... the point is made that average managers try to bring up their bottom performers, while the best managers long ago concluded that you get more mileage out of investing energy in the top ones. Of course the world is full of average people. They have to wind up somewhere. And organizations full of average people are never going to be able to take the advice to work the superstars. I'll believe that the slogan invest in your best has been internalized by our society when we devote serious resources to making sure that people with IQs in the top 1% stop dropping out of school faster than people with median IQs do. Anyone care to give me odds on this happening in the next 20 years? I'll take the "No" side.
- goldfeld 14y ago
  Do you really think people with higher IQ dropping out of school is an issue? Firstly, there are some many other factors at play making a person a "supertstar" (emotional stability, finding out what they love, creativity) but let's agree IQ is one of them and an important one. I'd argue that people on the top 1% are statistically people more interested in learning varied subjects. So unless the person had serious family issues, which is something hard to devote serious resources to pinpointedly correct, whether they drop out of school is not as relevant as them finding what they love and having the tools to learn it, on their own if they're so inclined.
  - btilly 14y ago
    I agree with you that IQ is far from a complete measure of what matters, but I do think that it is an issue. The reason why is because jobs that are likely to use the abilities of a high IQ person generally require a high school diploma, and frequently require a college degree. Therefore denying these people an equal opportunity to get those credentials limits how effectively society benefits from their abilities. Also I should note that the matter is personal. I have a good IQ and yet I came within an inch of failing to complete high school. Were it not for a teacher named Bernie Bowker, I would not have graduated, gone to college, or had any prospects of getting jobs where my abilities would be useful. I think that that would have been a tragedy, particularly for me.
- greenmountin 14y ago
  This is already happening, in a sense. Elite colleges face extreme pressure to keep their 4 and 6y graduation rate up, in part because successful parents are turned off by sending their kids to schools for outrageous tuition only for them to leave without a degree. Caltech is perhaps most known for this problem, with graduation rates that were <85%, but changes were made to stop people from "flaming out". Harvard has a 98% 6y rate -- University of Oklahoma is 64%
hkmurakami 14y ago
This kind of helps explain Japan's lackluster performance over the last 20+ years for me. The typical corporate culture there seems to focus on getting the mediocre and lagging employees to perform up to par (mind you, their systems for accomplishing this are rather impressive), rather than sharpening the skills and maximizing the contributions of their Ace players (they definitely exist, but are definitely not given their due compared to their output).
- patio11 14y ago
  Japanese mega corps are almost designed to be pathological for their best performing employees. I don't know if that is significant enough to have macroeconomic effects (all explanations of that nature strike me as suspicious just-so-stories), but if you hypothetically think you're good at something, a traditionally managed Japanese megacorp will attempt to a) dilute that aptitude, b) put you on a career track which requires decades to reach the autonomy you'd have at a US company in months or a startup in minutes, and c) compensate quality like a teacher's union does (I.e. forbid it and treat anyone asking for it as a threat to social harmony). That is not projection, btw. I played the game pretty well for 3 years. That is just me describing a small portion of the well-understood rules of the game.
  - hkmurakami 14y ago
    Let's just say that you lasted longer than I did ;)
- dasil003 14y ago
  This is an interesting juxtaposition to the assertion that Japan tech companies have lost ground in the market due to a perfectionism that leads to a 5% better product at 50% the cost (can't remember where I read that, but I think it was here).
  - SatvikBeri 14y ago
    It's a well-circulated trope that Japanese goods tend to have higher quality but less innovation. It's believed that very few disruptive innovations come out of Japan compared to the USA/Europe/India. This would fit in with the general model of Japan focusing on stability and getting the same level of performance out of everyone. I haven't done the research to test whether this hypothesis is true or not, though.
kamaal 14y ago
Its not going to happen. The problem is most places don't even have a way to find out a average manager. The reason is that management layers in almost every big company works like a cartel, they know darn well how to preserve their self interests. Generally you don't get to know until its often too late to do anything about it. The people who suffer the most are not bad performers, but those who fall out of managements favor or people who just can't get political and benefit out of it. The actual performers are likely to be named arrogant mavericks who are bad at team work. They won't be fired, but they will be treated so badly, until they themselves see the wisdom in leaving. Also this whole GE analogy in these kind of articles is MBA speak. That is talking at high abstract levels, without absolutely knowing what they are talking about. Stack ranking worked at GE not because Stack Ranking is awesome, but because there was some one like Jack Welch to make it work. Adhering to stack ranking to the letter but not in spirit will basically amplify the problem. Guess who gets the least rank in a political system?
- yuhong 14y ago
  Reminds me of this about Google: http://news.ycombinator.com/item?id=4331584 http://news.ycombinator.com/item?id=4331584
  - yuhong 14y ago
    And this one: http://news.ycombinator.com/item?id=2536186 http://news.ycombinator.com/item?id=2536186
- michaelochurch 14y ago
  The core insight-- that mediocrity and failure provide about the same payoff (zero) in a modern technological economy-- is accurate. Here's where the divergence happens. Being a top performer requires a lot, and not all of it's intrinsic. Fit with tools and project are important, and so are relationships. There aren't intrinsic A and B players. For example, most software projects have one or maybe two "blazers" who write most of the new code and make the important decisions, and many more who spend the bulk of their time keeping up. It's a lot better for your career to be in the former category; get out if you're in the latter. This is what language and tooling wars are often about in companies: people wanting to change the landscape so they can be the trailblazers and the others end up as the followers. This is why it's economically worth it (in a corporate context) to invest so much energy into tooling and language fights instead of on the work itself: if you win the battle, the leverage it applies to your work is immense. The truth is that most projects have a rank ordering that becomes self-perpetuating, because the high-ranking people take the best work and progress faster. There isn't one global equilibrium where the "best" people are magically matched to the best work, but N! stable equilibria, where N is the number of participants. Why is this important? Well, the correct insight is that the payoff curve (between input factors and output) is now convex. In a concave world, you wanted to manage toward the middle: reduce variance, bring up the slackers. This is what management is good at: bringing everyone in to the middle of the performance curve. That's also why traditional management is failing in the technological world. Maximizing a concave function is equivalent to minimizing a globally convex one, which is the easiest class of optimization problems (there's one global optimum). For these, incremental evolution (gradient descent) works: you converge to an optimal solution (in economic terms, an equilibrium). It's not equipped to handle the convex world where there are zillions of possible local optima and non-local insight is required in order to find better solutions. What's inaccurate is the idea that there are "intrinsically" mediocre vs. excellent people and that the former should just be discarded. Why do we have to stay in school until we're in our mid-20s? Because our economic contributions are worthless until we've had an amount of schooling that would be considered immense by historical standards. The reason for all this schooling is to increase the probability of a person ending up as a "10x" contributor in an economy that has no place for 1x contributors. As for stack ranking, that's something separate, and it's actually harmful to the top performers. Stack ranking is about intimidation-- nothing else. The idea is ancient: Romans called this method of intimidation and punishment decimation. Split the regiment into groups of 10, of which one will die. Sometimes it was random (drawing lots) and sometimes the groups voted. The reason for the 10% cut was because (a) it's not enough of a force reduction to "disrupt continuity" but (b) it was large enough to scare the shit out of people. People use "decimation" as a synonym for "devastation" but that's not correct, because "decimation" is a controlled, small reduction of force. Stack ranking is the same concept, but with political infighting used instead of randomness to make the decisions, and the "divide-and-conquer" campaign it wages against the proles is intentional. Intimidation's effect is performance-middling. It kills creativity and innovation, and the top performers suffer, but it brings the slackers closer to the median. Traditional, intimidation-based management worked well in a concave world where people were mostly doing low-margin commodity work and one slacker could cancel out 5 good workers, but it fails catastrophically in the convex world.
LnxPrgr3 14y ago
Somewhat related idea: given an employee who's stellar in some areas and not so stellar in others, do you try to even their attributes out, or do you develop the areas where they're stellar even further? I'm a fan of this line of thought: http://headrush.typepad.com/creating_passionate_users/2006/02/mediocrity_by_a.html http://headrush.typepad.com/creating_passionate_users/2006/0... So many people are focused on bringing everyone up to some base level of mediocrity in every imaginable area, but what if we instead focused on finding brilliance, then doing everything we can to amplify that brilliance? Which might, of course, include working on some of those areas for improvement, but intelligently, with the goal of keeping those weaknesses from impeding excellence elsewhere.
- btilly 14y ago
  Gallup has studied this exact question. They have found that working on areas of brilliance, and structuring jobs to work around areas of mediocrity, is hands down massively better than trying to address weaknesses.
droithomme 14y ago
Hand waving and made up numbers. It's kind of annoying when someone uses precise numbers that they pulled out of the air with no empirical basis as the foundation of an argument. At the end he asks about the organizations where 60% of value is produced by 40% of employees. Which organizations? How is value measured? No telling because the numbers are just made up.
- kfk 14y ago
  This. And let's add the obvious remark that if this 40% is that good, than why it is not firing the other 60%? Why do they keep them? All in all, this is the kind of poor business talk that makes MBAs so irritating.
  - heed 14y ago
    You don't need to say "this." Your comment reads fine without it.
    - dasil003 14y ago
      Thanks for saying that. I must be getting old and grumpy because that's an idiom that gets under my skin for no good reason as opposed to my prior hatred for the "fail" idiom which I am legitimately annoyed by due to its very nature as pessimistic armchair denigration.
    - natrius 14y ago
      If "agreed" were used instead, it'd perform the same function without being called out by people who don't like internet linguistic trends. Clearly indicating one's position in an argument is valuable, and "this" accomplishes that.
    - amalag 14y ago
      It is a seriously annoying internet fad/trend nowadays to put "this" in comments.
cdf 14y ago
Even though GE is generally considered well run, let's not forget that it needed a bailout by Warren Buffett during the financial crisis. At risk of sounding like I am defending my own mediocrity, the average worker and manager are going to be the ones who can last the distance. Top performers have a nasty habit of getting promoted, or headhunted. Or burnout. Institutional memory gets lost. Ultimately, it's the average long distance runners who carry the torch to the finishing line. Not that I dont think the best performers shouldnt be duly recognised and rewarded, but overemphasis on top performance...that's the stuff Enron is made of.
kenjackson 14y ago
This assumes mediocre workers will always be mediocre. I've always assumed the job of managers is to find the right place for for bright people they've hired. I've certainly seen mediocre talent turn onto stars in the right environment.
- flyinRyan 14y ago
  This is really the elephant in the room when it comes to any kind of ranking. As humans we always want to make rankings like A is better than B who is better than C... and so on. The reality is much more complex. If you take K1 kickboxing history, you'll see that pretty much all the top guys have all beaten each other at some point. This makes it pretty clear that "best" is something that varies wildly and may even vary from day to day. It's no different in software. I can tell you I've had times in my career where I was on fire, out producing any teams I knew about. And I've had times where the burn out was so bad I was producing nothing at all for weeks. How good someone is just isn't static.
lostlogin 14y ago
This reminds me of an article I read here ages ago on IBM's Black Team. It was (and is) fascinating to me. In case someone hasn't see it, www.t3.org/tangledwebs/07/tw0706.html. Discussed on HN here http://news.ycombinator.com/item?id=985965 http://news.ycombinator.com/item?id=985965
- mbesto 14y ago
  And largely referenced in Peopleware[1]. Good quote from that book: There is a sense of eliteness on a good team. Team members feel they’re part of something unique. [1]- http://www.amazon.com/Peopleware-Productive-Projects-Teams-ebook/dp/B003I84OIU/ref=sr_1_2?ie=UTF8&qid=1352125364&sr=8-2&keywords=peopleware http://www.amazon.com/Peopleware-Productive-Projects-Teams-e...
fkdjs 14y ago
As someone who is on the 'high performer' list, I can tell you I have seen this first hand and this is fine, we will work harder, provided we're given an even more outrageous salary. Otherwise, I'm going to get burned out doing the job of my coworkers / thinking for my coworkers every day, monitoring them so they're more efficient and don't go off chasing down bugs incorrectly. I don't need to be managed, leave me alone and I'll make customers and your boss'es boss happy. But this all can get tiresome and it sucks. But give me that bonus/salary and I'll continue on like a trooper. At my last job, I was given more and more work, and I made everything work without intervention, but I left due to low pay, now the old boss wants to hire me back as the old system seems to go down a lot, while his cheap labor source turns out to be more expensive than he first thought. There seems to be a belief that we can just whip up the high performers when we need them, but this just leads to burn out and turnover. just pay the high performers an ungodly amount and all will be well.
- SatvikBeri 14y ago
  High performers are still a great deal, because you can pay them 2x the salary to get 10x the results. Few places realize this, but the ones that do are wonderful to work for.
  - michaelochurch 14y ago
    High performers are still a great deal, because you can pay them 2x the salary to get 10x the results. The issue, for many companies, is that the perks the high performers want in exchange for this "arbitrage" that exists in hiring them-- very high levels of autonomy, rapid career advancement, implicit trust from the first day of work-- are considered unaffordable in the actual political context of the company. Companies won't give high performers 10x salaries because the high performer might not deliver if the conditions are bad, but if they give them high degrees of autonomy and interesting projects, that's visible to the less adept workers and it becomes an issue for management. Managers know that if they let their best people follow different rules, everyone will expect the same freedom. High and low performance don't seem to be intrinsic to people, in the sense that mediocre people can turn excellent given the right conditions, and vice versa. What does seem to be intrinsic is that there are high- and low-variance people. Low variance people are reliable ladder-climbers, and high variance people are the creative ones who might have a mediocre year or two, but then have a huge breakthrough. The top performers are, for the most part, high variance individuals. High-variance people can also fail quite badly, in certain circumstances, so companies are very nervous about hiring them at all. The "corporate ladder" rewards reliable mediocrity, not intermittent excellence. Intimidation-based management (which has been dominant since 1800) regresses performance to the mean, and its purpose is to reduce variance. When the input-output curves relating skill and effort to productivity were concave, variance-reduction was the way to go, because lower variance was equivalent to higher performance. Now that we're in a convex world (at least in software) variance-reduction fails us.
infinii 14y ago
All these senior management types that praise Welch's philosophies seem disconnected from the real world. They seem to think that by constantly managing out under performers (even mediocre staff) and striving to only employ high performers, everything will be peachy keen. Sorry but this just doesn't fit the real world because in every company, there will be menial tasks. Menial tasks that high performers will refuse to perform. Look at sports teams. The Chicago Bulls needed utility players to surround Jordan. Does anyone think a team of 5 MJ's or Lebron's would succeed over the long run?
- kamaal 14y ago
  >>The Chicago Bulls needed utility players to surround Jordan. Does anyone think a team of 5 MJ's or Lebron's would succeed over the long run? To add further, if Chicago Bulls itself hire all Jordan grade players. Will they want to the menial job of surround the actual Micheal Jordan or try to become Micheal Jordan's themselves?
lifeisstillgood 14y ago
Ah hell. Go all the way. Most of human value has been created since 1700- medicine, transport, mechanisation etc. Most of that is down to a few thousand individuals, from James Watt to Feymann. If we focus on increasing their productivity (every tenured professor is given state funded housekeepers) we may well increase the invention rate What we don't increase is the spread of that through society to the benefit of all. That requires the useless middle managers and useless peons implicitly referred to in this elitist piece of short sighted rubbish
- marquis 14y ago
  Mexico has an interesting take on this: if you get into the upper echelons of academia you can get a salaried do-what-you-want-publish-if-you-want job. Some of the country's best thinkers are paid to think.
  - adrianhoward 14y ago
    Sounds like the same take the rest of the world used to have - and still does in a few places. Ahh... tenure... how we miss ya. http://en.wikipedia.org/wiki/Tenure_(academic) http://en.wikipedia.org/wiki/Tenure_(academic)
    - marquis 14y ago
      It's different than tenure, they don't have to teach and I don't believe it's associated with a specific institution. I'm not sure exactly what it's called or how it works, I'll have to call a friend or perhaps someone here from Mexico can comment.
  - batgaijin 14y ago
    Can you please post links about this? It's incredibly interesting, and it would be great to see what's the reason behind it coming into existence and what the output has been because of it.
  - lifeisstillgood 14y ago
    This is tenure. Most universities have it - and very few have onerous requirements.(#) Getting it is hard (MIT famously has <50% rate - that is after working outrageously hard till your 30's to become world class professor material, you still get 50/50 chance of packing your desk up - eat that "up or out" Management consultancies. That being said I suspect the tenure rate elsewhere of faile MIT tenures is pretty good. (#) Newton famously had to teach three classes, they were so impenetrable no-one attended the third. Literally the best minds of the universities could not understand what the hell the best mind was saying. He did not have to teach any more classes.
deleted 14y ago
[deleted]
Mordor 14y ago
Kinda fails when you don't have A grade directors running the company. Also, how do you identify an A manager, unless you're really picking the productivity of their A workers? Surely weaker managers attribute their success to the weaker employees (to avoid being 'found out')?
SatvikBeri 14y ago
Rather than getting rid of "average people", it seems more common to sequester top talent. I think this is what's happening with small consulting shops and startups. You often see small teams of incredibly talented people at a startup or consulting firm that create a lot of the major innovations, then sell them to the large companies that handle distribution, etc. This makes sense because most people are average or below average. There is no way that a GE or IBM can function without large swathes of ordinary people. I doubt we'll see average performers disappear from big companies any time soon-instead we'll see the continuing rise of small startups and consulting shops with a few incredibly talented people.
randomafrican 14y ago
I'm sort of surprised COst is not mentionned. Can every company afford to hire only the best and the brightest ?
gadders 14y ago
The thing is, you can fill your whole company with go-getting geniuses, but not every task in the company requires that, and if you give the boring-but-necessary work to the whizkids, they're going to get p-ed off and leave. Stick the smartest on the cutting edge stuff that is the true source of competitive advantage for your firm. Keep the rest for the important-but-dull work - HR, Payroll, etc.
cust_support 14y ago
Which one are you? The problem with the magical numbers and hand waving is that there is a 80% chance that the author is one of the mediocre. Would you take this advice from someone who is mediocre?

69 points by dekayed 14y ago

It is good to see this discussed, but the principle is not news. In http://www.amazon.com/First-Break-All-Rules-Differently/dp/0684852861 http://www.amazon.com/First-Break-All-Rules-Differently/dp/0... the point is made that average managers try to bring up their bottom performers, while the best managers long ago concluded that you get more mileage out of investing energy in the top ones. Of course the world is full of average people. They have to wind up somewhere. And organizations full of average people are never going to be able to take the advice to work the superstars. I'll believe that the slogan invest in your best has been internalized by our society when we devote serious resources to making sure that people with IQs in the top 1% stop dropping out of school faster than people with median IQs do. Anyone care to give me odds on this happening in the next 20 years? I'll take the "No" side.

goldfeld 14y ago
Do you really think people with higher IQ dropping out of school is an issue? Firstly, there are some many other factors at play making a person a "supertstar" (emotional stability, finding out what they love, creativity) but let's agree IQ is one of them and an important one. I'd argue that people on the top 1% are statistically people more interested in learning varied subjects. So unless the person had serious family issues, which is something hard to devote serious resources to pinpointedly correct, whether they drop out of school is not as relevant as them finding what they love and having the tools to learn it, on their own if they're so inclined.
- btilly 14y ago
  I agree with you that IQ is far from a complete measure of what matters, but I do think that it is an issue. The reason why is because jobs that are likely to use the abilities of a high IQ person generally require a high school diploma, and frequently require a college degree. Therefore denying these people an equal opportunity to get those credentials limits how effectively society benefits from their abilities. Also I should note that the matter is personal. I have a good IQ and yet I came within an inch of failing to complete high school. Were it not for a teacher named Bernie Bowker, I would not have graduated, gone to college, or had any prospects of getting jobs where my abilities would be useful. I think that that would have been a tragedy, particularly for me.
greenmountin 14y ago
This is already happening, in a sense. Elite colleges face extreme pressure to keep their 4 and 6y graduation rate up, in part because successful parents are turned off by sending their kids to schools for outrageous tuition only for them to leave without a degree. Caltech is perhaps most known for this problem, with graduation rates that were <85%, but changes were made to stop people from "flaming out". Harvard has a 98% 6y rate -- University of Oklahoma is 64%

hkmurakami 14y ago

This kind of helps explain Japan's lackluster performance over the last 20+ years for me. The typical corporate culture there seems to focus on getting the mediocre and lagging employees to perform up to par (mind you, their systems for accomplishing this are rather impressive), rather than sharpening the skills and maximizing the contributions of their Ace players (they definitely exist, but are definitely not given their due compared to their output).

patio11 14y ago
Japanese mega corps are almost designed to be pathological for their best performing employees. I don't know if that is significant enough to have macroeconomic effects (all explanations of that nature strike me as suspicious just-so-stories), but if you hypothetically think you're good at something, a traditionally managed Japanese megacorp will attempt to a) dilute that aptitude, b) put you on a career track which requires decades to reach the autonomy you'd have at a US company in months or a startup in minutes, and c) compensate quality like a teacher's union does (I.e. forbid it and treat anyone asking for it as a threat to social harmony). That is not projection, btw. I played the game pretty well for 3 years. That is just me describing a small portion of the well-understood rules of the game.
- hkmurakami 14y ago
  Let's just say that you lasted longer than I did ;)
dasil003 14y ago
This is an interesting juxtaposition to the assertion that Japan tech companies have lost ground in the market due to a perfectionism that leads to a 5% better product at 50% the cost (can't remember where I read that, but I think it was here).
- SatvikBeri 14y ago
  It's a well-circulated trope that Japanese goods tend to have higher quality but less innovation. It's believed that very few disruptive innovations come out of Japan compared to the USA/Europe/India. This would fit in with the general model of Japan focusing on stability and getting the same level of performance out of everyone. I haven't done the research to test whether this hypothesis is true or not, though.

kamaal 14y ago

Its not going to happen. The problem is most places don't even have a way to find out a average manager. The reason is that management layers in almost every big company works like a cartel, they know darn well how to preserve their self interests. Generally you don't get to know until its often too late to do anything about it. The people who suffer the most are not bad performers, but those who fall out of managements favor or people who just can't get political and benefit out of it. The actual performers are likely to be named arrogant mavericks who are bad at team work. They won't be fired, but they will be treated so badly, until they themselves see the wisdom in leaving. Also this whole GE analogy in these kind of articles is MBA speak. That is talking at high abstract levels, without absolutely knowing what they are talking about. Stack ranking worked at GE not because Stack Ranking is awesome, but because there was some one like Jack Welch to make it work. Adhering to stack ranking to the letter but not in spirit will basically amplify the problem. Guess who gets the least rank in a political system?

yuhong 14y ago
Reminds me of this about Google: http://news.ycombinator.com/item?id=4331584 http://news.ycombinator.com/item?id=4331584
- yuhong 14y ago
  And this one: http://news.ycombinator.com/item?id=2536186 http://news.ycombinator.com/item?id=2536186
michaelochurch 14y ago
The core insight-- that mediocrity and failure provide about the same payoff (zero) in a modern technological economy-- is accurate. Here's where the divergence happens. Being a top performer requires a lot, and not all of it's intrinsic. Fit with tools and project are important, and so are relationships. There aren't intrinsic A and B players. For example, most software projects have one or maybe two "blazers" who write most of the new code and make the important decisions, and many more who spend the bulk of their time keeping up. It's a lot better for your career to be in the former category; get out if you're in the latter. This is what language and tooling wars are often about in companies: people wanting to change the landscape so they can be the trailblazers and the others end up as the followers. This is why it's economically worth it (in a corporate context) to invest so much energy into tooling and language fights instead of on the work itself: if you win the battle, the leverage it applies to your work is immense. The truth is that most projects have a rank ordering that becomes self-perpetuating, because the high-ranking people take the best work and progress faster. There isn't one global equilibrium where the "best" people are magically matched to the best work, but N! stable equilibria, where N is the number of participants. Why is this important? Well, the correct insight is that the payoff curve (between input factors and output) is now convex. In a concave world, you wanted to manage toward the middle: reduce variance, bring up the slackers. This is what management is good at: bringing everyone in to the middle of the performance curve. That's also why traditional management is failing in the technological world. Maximizing a concave function is equivalent to minimizing a globally convex one, which is the easiest class of optimization problems (there's one global optimum). For these, incremental evolution (gradient descent) works: you converge to an optimal solution (in economic terms, an equilibrium). It's not equipped to handle the convex world where there are zillions of possible local optima and non-local insight is required in order to find better solutions. What's inaccurate is the idea that there are "intrinsically" mediocre vs. excellent people and that the former should just be discarded. Why do we have to stay in school until we're in our mid-20s? Because our economic contributions are worthless until we've had an amount of schooling that would be considered immense by historical standards. The reason for all this schooling is to increase the probability of a person ending up as a "10x" contributor in an economy that has no place for 1x contributors. As for stack ranking, that's something separate, and it's actually harmful to the top performers. Stack ranking is about intimidation-- nothing else. The idea is ancient: Romans called this method of intimidation and punishment decimation. Split the regiment into groups of 10, of which one will die. Sometimes it was random (drawing lots) and sometimes the groups voted. The reason for the 10% cut was because (a) it's not enough of a force reduction to "disrupt continuity" but (b) it was large enough to scare the shit out of people. People use "decimation" as a synonym for "devastation" but that's not correct, because "decimation" is a controlled, small reduction of force. Stack ranking is the same concept, but with political infighting used instead of randomness to make the decisions, and the "divide-and-conquer" campaign it wages against the proles is intentional. Intimidation's effect is performance-middling. It kills creativity and innovation, and the top performers suffer, but it brings the slackers closer to the median. Traditional, intimidation-based management worked well in a concave world where people were mostly doing low-margin commodity work and one slacker could cancel out 5 good workers, but it fails catastrophically in the convex world.

LnxPrgr3 14y ago

Somewhat related idea: given an employee who's stellar in some areas and not so stellar in others, do you try to even their attributes out, or do you develop the areas where they're stellar even further? I'm a fan of this line of thought: http://headrush.typepad.com/creating_passionate_users/2006/02/mediocrity_by_a.html http://headrush.typepad.com/creating_passionate_users/2006/0... So many people are focused on bringing everyone up to some base level of mediocrity in every imaginable area, but what if we instead focused on finding brilliance, then doing everything we can to amplify that brilliance? Which might, of course, include working on some of those areas for improvement, but intelligently, with the goal of keeping those weaknesses from impeding excellence elsewhere.

btilly 14y ago
Gallup has studied this exact question. They have found that working on areas of brilliance, and structuring jobs to work around areas of mediocrity, is hands down massively better than trying to address weaknesses.

droithomme 14y ago

Hand waving and made up numbers. It's kind of annoying when someone uses precise numbers that they pulled out of the air with no empirical basis as the foundation of an argument. At the end he asks about the organizations where 60% of value is produced by 40% of employees. Which organizations? How is value measured? No telling because the numbers are just made up.

kfk 14y ago
This. And let's add the obvious remark that if this 40% is that good, than why it is not firing the other 60%? Why do they keep them? All in all, this is the kind of poor business talk that makes MBAs so irritating.
- heed 14y ago
  You don't need to say "this." Your comment reads fine without it.
  - dasil003 14y ago
    Thanks for saying that. I must be getting old and grumpy because that's an idiom that gets under my skin for no good reason as opposed to my prior hatred for the "fail" idiom which I am legitimately annoyed by due to its very nature as pessimistic armchair denigration.
  - natrius 14y ago
    If "agreed" were used instead, it'd perform the same function without being called out by people who don't like internet linguistic trends. Clearly indicating one's position in an argument is valuable, and "this" accomplishes that.
  - amalag 14y ago
    It is a seriously annoying internet fad/trend nowadays to put "this" in comments.

cdf 14y ago

Even though GE is generally considered well run, let's not forget that it needed a bailout by Warren Buffett during the financial crisis. At risk of sounding like I am defending my own mediocrity, the average worker and manager are going to be the ones who can last the distance. Top performers have a nasty habit of getting promoted, or headhunted. Or burnout. Institutional memory gets lost. Ultimately, it's the average long distance runners who carry the torch to the finishing line. Not that I dont think the best performers shouldnt be duly recognised and rewarded, but overemphasis on top performance...that's the stuff Enron is made of.

kenjackson 14y ago

This assumes mediocre workers will always be mediocre. I've always assumed the job of managers is to find the right place for for bright people they've hired. I've certainly seen mediocre talent turn onto stars in the right environment.

flyinRyan 14y ago
This is really the elephant in the room when it comes to any kind of ranking. As humans we always want to make rankings like A is better than B who is better than C... and so on. The reality is much more complex. If you take K1 kickboxing history, you'll see that pretty much all the top guys have all beaten each other at some point. This makes it pretty clear that "best" is something that varies wildly and may even vary from day to day. It's no different in software. I can tell you I've had times in my career where I was on fire, out producing any teams I knew about. And I've had times where the burn out was so bad I was producing nothing at all for weeks. How good someone is just isn't static.

lostlogin 14y ago

This reminds me of an article I read here ages ago on IBM's Black Team. It was (and is) fascinating to me. In case someone hasn't see it, www.t3.org/tangledwebs/07/tw0706.html. Discussed on HN here http://news.ycombinator.com/item?id=985965 http://news.ycombinator.com/item?id=985965

mbesto 14y ago
And largely referenced in Peopleware[1]. Good quote from that book: There is a sense of eliteness on a good team. Team members feel they’re part of something unique. [1]- http://www.amazon.com/Peopleware-Productive-Projects-Teams-ebook/dp/B003I84OIU/ref=sr_1_2?ie=UTF8&qid=1352125364&sr=8-2&keywords=peopleware http://www.amazon.com/Peopleware-Productive-Projects-Teams-e...

fkdjs 14y ago

As someone who is on the 'high performer' list, I can tell you I have seen this first hand and this is fine, we will work harder, provided we're given an even more outrageous salary. Otherwise, I'm going to get burned out doing the job of my coworkers / thinking for my coworkers every day, monitoring them so they're more efficient and don't go off chasing down bugs incorrectly. I don't need to be managed, leave me alone and I'll make customers and your boss'es boss happy. But this all can get tiresome and it sucks. But give me that bonus/salary and I'll continue on like a trooper. At my last job, I was given more and more work, and I made everything work without intervention, but I left due to low pay, now the old boss wants to hire me back as the old system seems to go down a lot, while his cheap labor source turns out to be more expensive than he first thought. There seems to be a belief that we can just whip up the high performers when we need them, but this just leads to burn out and turnover. just pay the high performers an ungodly amount and all will be well.

SatvikBeri 14y ago
High performers are still a great deal, because you can pay them 2x the salary to get 10x the results. Few places realize this, but the ones that do are wonderful to work for.
- michaelochurch 14y ago
  High performers are still a great deal, because you can pay them 2x the salary to get 10x the results. The issue, for many companies, is that the perks the high performers want in exchange for this "arbitrage" that exists in hiring them-- very high levels of autonomy, rapid career advancement, implicit trust from the first day of work-- are considered unaffordable in the actual political context of the company. Companies won't give high performers 10x salaries because the high performer might not deliver if the conditions are bad, but if they give them high degrees of autonomy and interesting projects, that's visible to the less adept workers and it becomes an issue for management. Managers know that if they let their best people follow different rules, everyone will expect the same freedom. High and low performance don't seem to be intrinsic to people, in the sense that mediocre people can turn excellent given the right conditions, and vice versa. What does seem to be intrinsic is that there are high- and low-variance people. Low variance people are reliable ladder-climbers, and high variance people are the creative ones who might have a mediocre year or two, but then have a huge breakthrough. The top performers are, for the most part, high variance individuals. High-variance people can also fail quite badly, in certain circumstances, so companies are very nervous about hiring them at all. The "corporate ladder" rewards reliable mediocrity, not intermittent excellence. Intimidation-based management (which has been dominant since 1800) regresses performance to the mean, and its purpose is to reduce variance. When the input-output curves relating skill and effort to productivity were concave, variance-reduction was the way to go, because lower variance was equivalent to higher performance. Now that we're in a convex world (at least in software) variance-reduction fails us.

infinii 14y ago

All these senior management types that praise Welch's philosophies seem disconnected from the real world. They seem to think that by constantly managing out under performers (even mediocre staff) and striving to only employ high performers, everything will be peachy keen. Sorry but this just doesn't fit the real world because in every company, there will be menial tasks. Menial tasks that high performers will refuse to perform. Look at sports teams. The Chicago Bulls needed utility players to surround Jordan. Does anyone think a team of 5 MJ's or Lebron's would succeed over the long run?

kamaal 14y ago
>>The Chicago Bulls needed utility players to surround Jordan. Does anyone think a team of 5 MJ's or Lebron's would succeed over the long run? To add further, if Chicago Bulls itself hire all Jordan grade players. Will they want to the menial job of surround the actual Micheal Jordan or try to become Micheal Jordan's themselves?

lifeisstillgood 14y ago

Ah hell. Go all the way. Most of human value has been created since 1700- medicine, transport, mechanisation etc. Most of that is down to a few thousand individuals, from James Watt to Feymann. If we focus on increasing their productivity (every tenured professor is given state funded housekeepers) we may well increase the invention rate What we don't increase is the spread of that through society to the benefit of all. That requires the useless middle managers and useless peons implicitly referred to in this elitist piece of short sighted rubbish

marquis 14y ago
Mexico has an interesting take on this: if you get into the upper echelons of academia you can get a salaried do-what-you-want-publish-if-you-want job. Some of the country's best thinkers are paid to think.
- adrianhoward 14y ago
  Sounds like the same take the rest of the world used to have - and still does in a few places. Ahh... tenure... how we miss ya. http://en.wikipedia.org/wiki/Tenure_(academic) http://en.wikipedia.org/wiki/Tenure_(academic)
  - marquis 14y ago
    It's different than tenure, they don't have to teach and I don't believe it's associated with a specific institution. I'm not sure exactly what it's called or how it works, I'll have to call a friend or perhaps someone here from Mexico can comment.
- batgaijin 14y ago
  Can you please post links about this? It's incredibly interesting, and it would be great to see what's the reason behind it coming into existence and what the output has been because of it.
- lifeisstillgood 14y ago
  This is tenure. Most universities have it - and very few have onerous requirements.(#) Getting it is hard (MIT famously has <50% rate - that is after working outrageously hard till your 30's to become world class professor material, you still get 50/50 chance of packing your desk up - eat that "up or out" Management consultancies. That being said I suspect the tenure rate elsewhere of faile MIT tenures is pretty good. (#) Newton famously had to teach three classes, they were so impenetrable no-one attended the third. Literally the best minds of the universities could not understand what the hell the best mind was saying. He did not have to teach any more classes.

deleted 14y ago

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Mordor 14y ago

Kinda fails when you don't have A grade directors running the company. Also, how do you identify an A manager, unless you're really picking the productivity of their A workers? Surely weaker managers attribute their success to the weaker employees (to avoid being 'found out')?

SatvikBeri 14y ago

Rather than getting rid of "average people", it seems more common to sequester top talent. I think this is what's happening with small consulting shops and startups. You often see small teams of incredibly talented people at a startup or consulting firm that create a lot of the major innovations, then sell them to the large companies that handle distribution, etc. This makes sense because most people are average or below average. There is no way that a GE or IBM can function without large swathes of ordinary people. I doubt we'll see average performers disappear from big companies any time soon-instead we'll see the continuing rise of small startups and consulting shops with a few incredibly talented people.

randomafrican 14y ago

I'm sort of surprised COst is not mentionned. Can every company afford to hire only the best and the brightest ?

gadders 14y ago

The thing is, you can fill your whole company with go-getting geniuses, but not every task in the company requires that, and if you give the boring-but-necessary work to the whizkids, they're going to get p-ed off and leave. Stick the smartest on the cutting edge stuff that is the true source of competitive advantage for your firm. Keep the rest for the important-but-dull work - HR, Payroll, etc.

cust_support 14y ago

Which one are you? The problem with the magical numbers and hand waving is that there is a 80% chance that the author is one of the mediocre. Would you take this advice from someone who is mediocre?