Sunday, November 14, 2010

Addition by Subtraction

I’m a fairly avid football fan. I watch primarily because I enjoy the game, but given my career as a stock trader / short-seller, I also follow it from a managerial or organizational standpoint. And while at first it might seem odd to try to learn about organizations by following professional sports, when one thinks about modern culture, it’s much less so. For nowadays, sports are perhaps the only field in which achievement is sought and praised openly and unconditionally. (We admire good teams without seeking to handicap them, denigrate their winning players, nor pit antitrust lawyers against their owners.) Thus, sports is a venue where one can unambiguously see the results of policies aimed at success. Those principles can be then used to inform our (egoistic) analysis of, and approach to, other fields.

Recently I’ve been reflecting on how the perennial top teams in football, notably the Colts and Patriots (and soon, I think the Saints and Chiefs), prioritize character and attitude over raw talent. And it’s not just a bromide, they can routinely be observed passing over talented but troublesome players. By contrast, perennially losing teams, e.g. the Raiders and Bengals, seem to go out of their way to select talented but corrosive, lazy, prima donna players. The results speak for themselves.

I think there are many factors at play here. But perhaps the least appreciated is how “coachable” an athlete is. Many college stars are used to riding their talent alone, and thus resent and resist any feedback or criticism. (In a more general organizational context the equivalent might be the pompous know-it-all.) Their unwillingness to learn or take coaching not only stultifies their own development, it also sets a terrible example for the rest of the team, many of whose players are less naturally talented than the would-be stars.

Similar points can be made about players who won’t put in the effort at practice, or who are so demanding of attention and special treatment that they not only cause the team to lose focus, but also eliminate any possibility of an organizational pursuit of excellence. As much as the absolute best people will be self-starters and dedicated no matter how others in the organization behave, there’s no doubt that almost everyone else, at least to some degree, will come to resent the behavior and treatment of malcontents, which results in a certain contempt for the organization that condones it. This affects the players’ motivation and willingness to do their very best at all times.

For these reasons among others, the overall effect of players with bad characters is corrosively negative. Teams that understand this avoid such players from the outset, and if one sneaks in, take no time to get rid of him.

However, since this in not the majority view, reporters often question the decision to pass over or let go such players. A coach like Bill Belichick, who is very clear and confident in his principles — and hence very sure of his decisions — can serenely and simply respond to such questions: “we’re taking the steps that give us the best chance to win”.

As confirmation of the wider applicability of these observations, a close friend of mine, who is a senior vice-president of a successful firm, emphasizes to me how much corporate culture and employee attitudes matter to his firm. When they find employees — no matter how skilled — who detract from the workplace, the decision to let them go is easy because they now truly understand the value of character to culture, and of culture to achievement. Indeed, it’s a policy they hold to no matter how short-handed they might be.

Of course all of this is not to say that talent doesn’t matter — it certainly does. If and when you find an extremely talented individual with the right character and work ethic, you build a whole team around him (e.g. Peyton Manning, or in basketball, Michael Jordan). But notice that such players are not only highly coachable and demanding of themselves; by their attitude, example, and expectations of other players, they make everyone around them better. In other words, in every respect (except talent) they’re the opposite of the uncoachable, prima donnas.


Blogger madmax said...

When they find employees — no matter how skilled — who detract from the workplace, the decision to let them go is easy because they now truly understand the value of character to culture, and of culture to achievement.

Anti-discrimination laws make this very difficult, especially with the non-talented workers. My company is loaded with female and minority employees who are *way* below the standards of everyone else. Yet, these employees are *never* fired. Managers walk on egg shells around them.

Another phenomenon is the recent mother who does much of her job at home. Most of these women contribute little to nothing to the firm. They too are only tolerated because of the anti-discrimination laws. American productivity will always be *severely* hampered because of the anti-discrimination paradigm that is in place.

Professional sports isn't really affected by this since most of the best players are non-white and all players are male. But in the non-pro-sports world, corporations are heavily weighed down by regulation telling them who to hire and all based on the philosophy of egalitarianism. Egalitarianism is just as much of a civilizational killer as altruism.

5:24 PM  
Blogger Clark said...

The analogy to professional sports is spot on. The hiring and firing of employees is the most important thing a company can do. The book, From Gatekeeper to Trusted Advisor, by Andria Corso is a great resource in building a trusted advisor and solid team in your company. It is based on the wisdom and insight of senior business and HR leaders in numerous companies of all sizes in a variety of industries. Definitely worth checking out!

5:57 PM  
Blogger Amit Ghate said...

I agree madmax that implementing these strategies is much more difficult at large companies. But if it's deemed important enough, I still think it can be done. Netflix is a good example of a company operating on this premise:

2:15 PM  

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