Meeting room, table and paper board. (c) 2008 Luis Argerich of Buenos Aires, Argentina. Via Wikimedia. (CC BY 2.0)

Power of Mediocrity: Being Great Takes Risk

Forrest ChristianLearning, Organizations, Reviews - Books, Risk Management Leave a Comment

I’ve been reading Harvey’s How Come Every Time I Get Stabbed in the Back My Fingerprints Are on the Knife: And Other Meditations on Management lately. He contends that learning is quite different from teaching.

In teaching, the student gives the teacher the majority of the responsibility for whether a change in state occurs. Thus, “if a student hasn’t learned, then the teacher hasn’t taught.”

Learning, Harvey argues, is quite different and the full responsibility of the student.

His final examinations are quite “original” and, he says, quite successful as statements of the change in state that the students have accomplished: “most students have produced extraordinarily competent work. Some have produced work that is very incompetent. Very few have produced anything mediocre.”

Buckingham and Coffman found something similar in the Gallop data on management. In First, Break All the Rules: What the World’s Greatest Managers Do Differently, they say that the difference between the actions of great managers and terrible managers was very subtle. They tended to do the same things but from a slightly different angle. The great managers had something, a talent, that the terrible managers lacked.

The anomaly the found was in mediocre managers. Their actions had very little resemblance to those of the great or terrible managers.

Apparently, mediocrity is different.

Being great, succeeding, takes risk. Risk means instability. Great businesses always start with risk taking that pays off. Microsoft had several big risk-taking episodes, including the anti-piracy statement Bill Gates made to the computer enthusiast community back when it only produced Basic programming language, and the declaration to IBM that they had a disk operating system (DOS) product ready for IBM PC.

Terrible failures always start with risk-taking that doesn’t pay off. Think Iridium, the Motorola consortium that put billions of dollars into a global satellite phone network, only to have no one want to use it when it came out. The risk didn’t pay off.

Stable companies, on the other hand, take as few risks as possible. Risk, by its very nature, means unpredictability: I simply cannot predict with any certainty that something will work. Companies that started with risk-taking quickly turn risk-averse when they succeed. Kahneman says that we’re all risk averse about what we have, valuing the bird in the hand more than it’s really worth.

Companies that are successful want to hold onto what they have more than they want to build more. Their managers manage for predictability, which means mediocrity.

You’re never going to burn bright when your goal is to not get your fingers burnt.

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Image credit: Meeting room, table and paper board. © 2008 Luis Argerich of Buenos Aires, Argentina. Via Wikimedia. (CC BY 2.0)

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