Older professionals reading this might well remember the hit management book “In Search of Excellence” by Robert Waterman Jr. and Tom Peters. It was published more than 40 years ago now, in 1982, but many still see it as management orthodoxy.
In it, the authors looked at 43 exceptionally well-run companies (as determined by measures such as average return on equity and compound asset growth), and after interviews with the likes of IBM, 3M, HP and McDonalds attempted to distill what made these companies so successful.
They identified eight key characteristics, including aspects like being close to the customer, being hands-on and values-driven, and interestingly, that the root source of quality and productivity gains was through people rather than technology. [This latter point might be a moot one now].
We might think we should be applying people analytics to the same end.
However, it’s an empirical question as to whether we should be in search of excellence or in search of mediocrity.
Let me take you through the reasoning.
Let’s assume employees’ abilities fall on a normal distribution.
We might study the employees at the top of the distribution, the excellent ones, and try to hire people like them.
Another strategy would be to study the people at the bottom of the distribution, the poor performers, and seek to avoid hiring ones like them.
(It’s worth remembering that these poor performers are not random people off the street; they are people who were selected by the hiring process and yet ended up in the bottom of the talent distribution of our employees).
If we think in terms of sales jobs, it’s quite possible that reducing the number of poor hires will have just as big an effect on sales as increasing the number of excellent hires.
It may also be the case that detecting people who will prove to be poor hires is easier than detecting people who will turn out to be excellent performers.
I suspect that flaws may be more detectable than the subtle mix of traits that leads to excellence.
The point is that people analytics teams can do a variety of analyses.
Certainly, a study of excellent performers will appeal to management.
However, analytics pros should be savvy enough to recognize that addressing the bottom half of the distribution can potentially have as big an impact as addressing the top.
There is something to be said for a search for mediocrity, a desire to use analytics to avoid the big mistakes, the bad hires, or terrible HR decisions that cause real heartache.
By all means, do some searching for excellence, but don’t underestimate the power of a search for mediocrity.
