Enable top players to thrive and encourage competition to build market-leading companies

I ran with a group last night, and about 40 of us were hanging out in a park afterward. As I was leaving, I introduced myself to a guy sitting alone on the very outer rim of the group. One of the last things he said was, "These groups can be very cliquey." The significance of that comment only dawned on me on my walk home.

Earlier in the conversation, he mentioned that he had just won a 10K last weekend. I mean, he WON! He is targeting running a 5-minute 20-second-half marathon this weekend. He is fast.

Although I am new to the group, I'm confident he's one of the fastest people in that group. So, why is the person who is the best at the activity everyone got together for sitting alone even though he seems interested in socializing?

I concede that a running group is a social outlet, and this fast guy gets his medals at running races. But what if that was a competitive running team? Would the group choose him? Would the fast guy choose that group or a different one where he feels more socially accepted?

Our working environments have a similar, more significant problem.

Managing toward the middle creates organizations that lag market leaders

It reminds me of all those times I have spoken with individuals I consider top players who feel underappreciated. At the same time, their more culture-fit peers get treated like rock stars. When I work with organizations requiring significant strategic and operational transformation, one reality that such teams struggle with is the drain of high-skilled individuals.

There have been many proponents of the managing-toward-the-middle theme through the easy-money era. I respectfully disagree with them because there is a significant incentive problem behind those messages. Encouraging employees to quit their managers while providing recruiting services is a conflict of interest. Asking employees to dislike supervisors or executives is unhelpful because it is an out-of-context conversation. Managers or supervisors are just human beings living within constraints.

The reversal to the middle wave has hurt individual, organizational, and economy-wide productivity. Let’s use a simple comparison to understand the problem.

I have always been a huge tennis fan. When I was a kid, it astonished me that Pete Sampras could win 14 grand slams. He was superior to his peers. His exceptionalism urged Andre Agassi to scrap his flamboyance and invest in fitness to catch up.

Djokovic, Nadal, and Federer have over twenty grand slams in the present generation. How is that even possible when we thought going past 14 was impossible? Likely, other players in the current generation who don't even have a single Grand Slam are better than Sampras and Agassi. That's the power of competition.

The fundamental question we must answer is: Why are we watching tennis? Are we watching tennis to see average players duke it out for five hours? Or do we admire tennis to see two or three generationally relevant players display a higher standard and force the rest of the field to improve?

Leading an organization to strive for the head of the pack is only possible with top players. They set a benchmark for the rest of the players to improve. It is much easier to show the whole company what good looks like when we have strong role models.

Capitalism is a winner-take-all sport. Someone is always setting a new competitive threshold. Winning companies take their markets, and the others fold. We must spotlight our best players in the context of our team's sport so that others can raise their level. It's better for the whole team and the sport.

Key Insight

Talking about skills and experience is enjoyable. But it is different from possessing those traits. Cool running gear and making a post-run social plan can make individuals popular. But it doesn’t equate to running skills necessary for a competitive running team.

Organizations that manage for the middle use likability factors to measure success. Entities that struggle with productivity tend to strive to maintain a ‘happy majority’ by sidelining skilled and experienced individuals. It results in a skill drain and encourages mediocrity even among highly competent individuals.

What 'good' looks like in our work environments can be highly confusing. Biased opinions and politics often obscure reality. It usually takes a lot of work to know who the equivalent of a fast runner or top tennis player is.

Worse, defining objective metrics or setting targets for what 'good' looks like for most roles takes significant mindshare and effort. Even if one or two good metrics and targets exist, no individual can create outcomes independently. Each person's results heavily depend on how others in the organization pass the ball to them. The translation is that top players can only thrive if the rest of the organization collaborates with them.

Companies that strive to lead their space invest in proactively identifying, hiring, and spotlighting individuals with strong competencies, deep skills, and high-quality experience from a customer value creation lens. They also build a system to enable these top players to succeed and encourage others to raise their game.

Call To Action

As we start dealing with The Productivity Crisis, consider the following aspects to embrace and avoid.

What to avoid: Sidelining highly skilled individuals who don’t fit typical personalities in the company.

First, avoid an organizational culture that portrays exceptional talent or experience as a threat. Building stories using subjective personality traits to sideline folks with deep expertise and skills, especially in terms of creating customer value, is a typical pattern among organizations that struggle to keep top talent and encourage a reversal to the middle. Here are some questions to consider:

• Does the culture encourage cliques around personality facets such as "we are all locals," "we are the old guard,” “our worldview is the same,” or “our view on work ethic is similar”?
• Is sidelining top players an inconvenient truth to appease the majority?
• Is there a revolving door of top talent?

What to embrace: Building a system that allows individuals with top skills and experience to thrive and others to improve.

Developing and deploying robust processes and objective data collection enables seamless collaboration across all skill levels. Conversely, such a system guards against individuals’ tendency to collaborate only with work friends and allows all employees to play in an objective system. This results in spotlighting individuals with customer value creation-focused skills and experience. Here are some questions to consider:

• Do we have effective operational processes that ensure seamless collaboration?
• Do we use objective decision-making to ensure effective analysis and accurate assessments supersede biased proposals and opinions?
• Does the choice of metrics and targets ensure employee measurements are normalized to protect them from upstream or downstream performance or decision-making gaps?
• Is performance management objective and involves deeply skilled executives willing to eliminate emotional storylines?

In Closing...

This is a necessary topic to introspect on. Whether we are a small shop, a unicorn, or a publicly listed company, are we interested in being an average institution among our competitive set? If not, why would we manage our company to satisfy the majority at the expense of the players who can elevate the whole group?

It's something to mull over as we think about the productivity of our organizations. Suppose we find ourselves in a cliquey organization. In that case, we are in an environment that does not understand cognitive bias beyond checking essential gender and race boxes. But far more sophisticated biases creep in if we only focus on these obvious ones.

Good people will join the cause if we genuinely believe we have a highly competitive solution to a relevant market problem. Setting high standards encourages all employees to learn and strive to improve. It's a more productive and enjoyable work environment. Feel free to demand objectivity and push for higher levels of play.