The Cult of Mediocrity
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Thanks for all the great responses. My friend "Joe" can feel better knowing he's not the only one who's been stuck in this situation. I've been in similar situations myself, but I think that working as a contractor makes it easier to deal with. After all, you know the contract/project will end and you can move on to a better environment.
At one company I was at (a very large corporation) you could literally feel the morale drop through the floor every year at annual review time. At another place management was totally disinterested in changes to a process that cut down processing time of one daily operation from over 2 hours running time to less than 10 minutes. On the other hand they were extremely excited over a simple query optimization that saved around 200 milliseconds on a given query that was run maybe three or four times a day.
The ancient Romans used to say the empire must "expand or die." Some might say the same thing about business.
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Karma - a couple of responses:
The examples you site as having managed the risk/reward situation successfully are examples because they were successful or because they are unusual? How many other thousands of people took similar risks and failed?
The examples I cite were cited because they are high-profile risk-takers. There's nothing unusual with risk-taking - people do it all the time. Most risks that don't pan out won't make the headlines though. A common thread among risk-takers is their ability to take failures, learn from them, and move on to new ventures.
Millions of people take risks every day, and many of them don't pan out: the guy who starts a small business, the lady who buys stocks, the people trying to "flip" a house. The point is that the reward is greater than the risk, otherwise no one would ever take risks.
Here's an example: Picture a casino. We'll say they have a new game that requires you to bet a minimum of $100. Here are the three options:
1. If you bet and lose the game, you lose $100.
2. If you bet and win the game, you get to keep your $100 and win another $3.
3. If you don't play the game, you can put your $100 in the bank and I'll give you $3 in interest.
Which one would you choose?
Now let's change it up. Picture my friend Joe. He can take risks on the job in a risk-averse work culture and try to make things better. Here's the potential outcomes:
1. If he takes the risk and succeeds, he gets to keep his job + get a 3% industry standard raise.
2. If he fails at that risk he can be written up, chewed out, lose credibility, or potentially lose his job.
3. If he doesn't take any risks, he gets to keep his job + get a 3% industry standard raise.
What's the smart move here?
Did Bill Gates really take a risk in starting Microsoft? Perhaps a young man with many years ahead of him could afford to try something different in the knowledge that if it failed there was still time to try something else
Bill Gates took a big risk. He could have stayed in college, gone out in the world and made a comfortable living working for someone else. He might have been a lawyer, a salesman, or even a manager at the local grocery store. The fact that he gave up a comfortable status quo place in the American economy to pursue his dream makes him a risk-taker.
A young man with many years ahead of him could "afford to try something different", or he could just as easily afford to "stick to the status quo" and "not make waves". The fact that you might fail, and will have to "try something else" is enough to make many people (of all ages) risk-averse. And apparently many modern businesses as well.
Thanks
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I think there's always an element of reward, or it would not be worth taking the risk. I think it's a little deeper than just succumbing to medicrity just because everyone else did. The fact of the matter is it just doesn't make sense to risk it all for no reward, especially when you don't have to. See my previous post with the casino example.
And don't get me wrong - the reward does not necessarily have to be financial (although it often is). Many people feel rewarded by a boss who takes the time to say "good job", or other recognition. Others feel rewarded by a feeling of personal accomplishment. But some people, in risk-averse work cultures, might decide that the good feeling you get from a job well done is not worth potentially losing your job over.
Heck Steve, you're one of the biggest risk-takers I personally know. You started one of the most popular SQL Server community sites on the Internet, pouring countless hours into it over the years. You probably didn't have to do this, but you decided at some point that there was a reward out there well worth the risks. I can probably guess a few of the risks you probably faced, but I'm sure there are countless others that I know nothing about; not to mention the opportunity cost - the hours you spent trobleshooting web servers when you could have been out fishing
But what if the potential reward had not been there? -
Mike makes several interesting points but I wanted to point out option 4:
Per Mike options are:
1. If you bet and lose the game, you lose $100.
2. If you bet and win the game, you get to keep your $100 and win another $3.
3. If you don't play the game, you can put your $100 in the bank and I'll give you $3 in interest.
Option 4:
4. If you bet your $100 and win the return is $1000 (or more).
Unfortunately most companies operate in the option 2 range - particularly when it comes to rewarding employees/individuals who are willing to accept more risk than their peers.
I would say that the good 'ol 80/20 rule applies, 80% of the people will choose option 3, the risk takers (20% or less) will choose option 4 and will either succeed or fail spectacularly - especially when a company culture includes more than the usual 80% of option 3'ers.
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Reading through all these posts I suddenly realised that my signature tag-line probably gives some idea of my personal attitude to taking risk. In fact, it is a simplification, I don't have the time to go round 'improving' things that don't need to be 'fixed'. I know there are bits of code out there in my system that are, ...err..., sub-optimal
, and I do take the opportunity to review them when my scheduled work leads me into those forgotten backwaters of mediocrity.I have, however, found that my personal attitude to risk has changed as I have got older, I take risks, live a little. A symptom of mid-life crisis maybe, to throw caution to the wind and embrace new ideas?
A friend of mine once told me a story about a young man, setting up his own business with encouragement from his Dad (a 'self-made' man who was never averse to taking a chance when he saw one). The young man was agonizing about the decisions he was having to take. His Dad's advice was...
"Look at it this way, if all else fails and you lose the lot, at least they can't eat you"
David
If it ain't broke, don't fix it...
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Great article. If businesses reward mediocre or poor performers nearly the same as they do people with initiative, creativity, and a drive for results, the business will ultimately end up with mostly poor performers. Why ? People are for the most part rational beings.
Why kill yourself taking risk and working 60 hours a week if you are getting about the same bonus/raise as the guy sitting next you who’s working less than 40. Obviously personal drive/personality comes into play, but only in the short term. Eventually the high performers will leave to go somewhere where there efforts are rewarded or worse, they will lower there game.
In the last 5 years I have worked for both a high intensity, high performance trading firm (Brutal, but a high performing culture) and a relatively low intensity, low performance strategic outsourcing organization (Low intensity and largely ineffective). One of the most notable differences in the two organizations was the ‘at risk’ pay. In a trading firm, it’s not unusual to have 20 -50 % of your base pay in your bonus, and if you don’t perform not only do you not get the bonus, you will probably get fired. At the strategic outsourcing organization high performers were lucky to get 4% bonus and mediocre performers got 2%. It’s simple really. Pay for performance, and you can demand and get it. Otherwise you get what you pay for 😉
--DD
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Ha, not sure this site was a risk. It was a hobby that grew and grew and it was fun to put time into. If it had never gotten beyond the hobby stage, we might not have put as much work into it, but it wouldn't have hurt us much.
I think that risk-averse/risk taker is something you're born with. You have that nature or you don't. To what degree is somewhat learned as well. Too many punushments will lean you more one way.
People take risks every day. Everything you do is a risk, and sometimes you think about it, sometimes you don't. We all have things that seem "risky" to us, but seem silly to others. Drop a cookie on the floor? 5 sec rule in my house. My Mom, on the other hand, would be horrified and probably make you spit it out and rinse your mouth with Listerine
.I think the TCM and other strategies are designed to allow you to take mitigated risks, not bet the farm, risks, and fail in a way that allows the company to grow. It's like the venture capitalists: they invest in 10 companies, expecting 1 to succeed, 2-3 to break even and 5-6 to fail. But the 1-3 pay for the others and then some. I'm not that risk-tolerant, but some people are.
The biggest problem I see today is that most larger companies, and many people in the US at least, aren't very risk tolerent. They want to bet $1 and win $1000, not bet $100 to win 1000. And if they bet the $100, they want $80 back if they don't win.
If you're #1, it's hard to keep pushing. You want to remain on top, not take risks to grow more. If you're #4, you think it can be worth it to take risks to get to #1, knowing you could die if you fail. Or fall further. CEOs want big paychecks, bonuses, etc., but if things don't work out, it's not their fault and they still want their bonus. Or they want to "bend the rules, cheat, book fake revenue, etc." to win, thereby mitigating their risk of failure by cheating. We want to sue someone when we get hurt or something happens. Not accept failure.
The dog-fighting thing makes some people so upset. I had someone rant at me about how bad it was. I think it's bad, but it's a product of a free society. You will have people that do things we don't like and they should get punished, but don't change society to worry about the lowest common demoninator. Punich the LCD and let the rest of us enjoy our lives. It's the price we pay.
OK, I'm ranting. Probably need my own ed on this, but thanks to Michael for a great, thought provoking discussion.
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Hi Joe C.,
Option 4 is great, when it's offered as an option. My concern is that there are a lot of businesses out there that don't understand Option 4 (or equivalent), and aren't really interested in creating an atmosphere where motivated employees will take risks and "do the right thing". It's too bad, because there are a lot of businesses that could benefit from a strong dose of their employees' entrepreneurial spirit (I use that phrase for lack of a better description).
Thanks,
Mike
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I think you underestimate your contribution to your own site and to the community at large Steve. I know you've spent countless weekends fine-tuning hardware, installing service packs, and troubleshooting the site - I've read about it in the occasional editorial
You might not have thought about it recently, but I'm sure you've thought about the opportunity cost of your hobby on those late-night server upgrade missions. I also suspect that the opportunity cost was quite high, considering the money to be made doing part-time consulting in the evenings or on weekends, the time that could have been spent relaxing at the lake with a fishing pole or on the golf course, or even just catching up on sleep
To take something you enjoy beyond the hobby stage, expose it to the world, invest time and money into it, and hope they enjoy it as much as you do is a pretty big risk in my book I agree with you on the corporate mentality these days. Too many corporations are on top and extremely complacent. Fortunately there are always 1,000 little guys out there, ready to take big risks to knock the king off the hill
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You are partially right on the opportunity cost. Andy, Brian, and I were all earning hundreds of dollars a month writing when we started this site, at least a car payment a month. Actually we weren't earning it right then because our former writing site refused to pay us
So over the first 2 years, the three of us definitely got some comments from spouses about the drop in income. We plugged along and finally earned some money after nearly two years and it got better slowly after that.
However I'm not sure it was a risk. It was something we enjoyed and it was a great challenge to try and answer every post, stay ahead of the curve on SQL Server 2000 and find answers and new information for people. It was almost a game, not really a risk for us. Don't forget that we were writers, Brian and I had written technical books, and we'd had some speaking chances as well.
Risk is also a frame of reference. If you've seen me walking around, you'll notice that my sense (or desire) of fashion is below par for the most part. For some it would be a huge risk to walk out the door like that. For me it's nothing. Just not important and it's why I'm not so good in a suit-and-tie environment.
Some of you can handle dropping $300 on black jack in Vegas. I couldn't do that. I could drop $300 on dinner in a heartbeat. A matter of priorities and perspective as much as risk.
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Hi,
I am not personally adverse to risk taking having changed career twice so far and setting myself up for a third move I think I have taken more than my fair share of risks. However I think that risks are fundamentally badly understood.
Purely in my personal opinion Bill Gates took a small risk if you look at it from his perspective i.e. I want to be successful and be the best I can possibly be. The risks of not starting his company with that mentality would be far less than the risks of maintaining the status quo. The rewards would be huge the failure might have been he was 2 or 3 years behind his fellows if he chose to return to full time education, or he may have learnt so many lessons that his next venture proved successful.
What makes him unusual is that his risk paid off in a big way. That is the other side of the equation that people misjudge. The rewards for taking risk are very rarely as big as people think. That may be because of risk adverse cultures and therefore on an individual level we never achieve the rewards that we feel are warranted by our actions; however that should not be the same for businesses. If a business takes a risk to break into a new market or develop a new product then the rewards one would think would be proportional if that risk paid off. There is no manager to say I dislike your risk taking. It is fundamentally down to the consumers of those products or services to use them on the basis of there worth to them, there is no bias from the public on the basis of the percieved risk that was taken to create the product or service.
Unfortunately perhaps it is very rarely the case that big business takes such risks. If asked who do we know who are successful risk takers we can probably name a small handful of people alive or dead and if we investigated further I would happily bet that most of those people started out by taking very personal risks say to start a business or invent something novel, very few of them would have taken a well established brand and turned it into something as yet unseen. I believe the reason for that is the rewards will very rarely out-weigh the risks in those situations.
Ultimately if we take a job in a low risk environment let say a NYSE/FTSE 100 company how much risk was involved? If we’ve sought a job with a company that doesn’t need to take big risks, it returns regular profits, provides us with a stable income and benefits can there be a justification for assuming that risk taking will be acceptable? If we take a job in a start-up where there is inherently more personal risk then perhaps taking risks would been be better rewarded?
K.
PS. I’m not sure that gambling is a good example because the odds are always in favor of the house, we know for a mathematical fact that we will always lose in the long term.* With a known risk like this we can only ask how much we are willing to delude ourselves.
* Black jack aside then the question is how long before we are beaten senseless by an angry pit boss
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Purely in my personal opinion Bill Gates took a small risk if you look at it from his perspective i.e. I want to be successful and be the best I can possibly be. The risks of not starting his company with that mentality would be far less than the risks of maintaining the status quo. The rewards would be huge the failure might have been he was 2 or 3 years behind his fellows if he chose to return to full time education, or he may have learnt so many lessons that his next venture proved successful.
The risk he took was not just about losing a couple of years in school that he could make up later. If his risk had failed he could have ended up in debt up to his eyeballs, bankrupt, with no home, car, or money to buy groceries. Even if we were just talking about losing a couple of years of school that could be quickly made up down the road, the economy might have changed by that time resulting in less job opportunities for status quo employment, which would lead to even more issues. I think one of the worst things a risk-taker can do is underestimate the amount of risk they are taking on. Exhibit A: The current U.S. Subprime Mortgage Market.
What makes him unusual is that his risk paid off in a big way.
I actually don't find that unusual. It happens every single day - people take risks and it pays off big. It might not pay off as much in $$$ as it did for Bill Gates, but some people aren't interested solely in $$$ as their reward. I think Steve pointed out that some people feel rewarded by a sense of pride, accomplishment, recognition, or any other number of intangibles.
If a business takes a risk to break into a new market or develop a new product then the rewards one would think would be proportional if that risk paid off.
Often the risks proposed in company are much smaller then your example, but can end up having a significant impact that radiates like an echo through the company all the way out to customers and shareholders. It could be a simple process change, an improvement to an existing product, or a new marketing strategy for an existing market. Quite often these ideas are of very low risk to the company, and have a potentially huge payoff if successful. Unfortunately in risk-averse cultures they tend to be extremely high risk for the individual proposing or implementing the idea.
If asked who do we know who are successful risk takers we can probably name a small handful of people alive or dead ...
Success is defined on an individual basis, but I could name hundreds people I would consider successful who took risks in sports, movies, television, and the music industry. If we pick up the yellow pages in any given town, we can look at all the businesses that were started by risk-takers (pretty much all of them). Tens of thousands of soldiers in the American Revolution risked their lives for freedom, and some might consider their efforts moderately successful. Hundreds of thousands of soldiers in WW II placed their lives on the line to ensure "the blessings of liberty" for their children and their children's children. We call them the "Greatest Generation", indicating some level of success in their efforts.
So I'm not really sure what you mean on this; it seems to me there are hundreds of thousands of people (just the alive ones) who took risks and were successful at it. But maybe I'm wrong, and there are only a handful of successful risk-takers either alive or dead.
Ultimately if we take a job in a low risk environment let say a NYSE/FTSE 100 company how much risk was involved? If we’ve sought a job with a company that doesn’t need to take big risks, it returns regular profits, provides us with a stable income and benefits can there be a justification for assuming that risk taking will be acceptable?
The problem is that there are companies out there that are willing to take the risk, and if successful the non-risk-taking company's customer rolls, its regular profits, and its employees' stable incomes and benefits will take a beating.
If we take a job in a start-up where there is inherently more personal risk then perhaps taking risks would been be better rewarded?
All companies are "start-ups" at some point. Apparently when they reach critical mass, and become comfortable with their level of success, they lose the "drive" to take risks (small or large); the same drive that brought them into existence, and in many cases made them great, in the first place. Fortunately for us, for every one of those companies "at rest" there are 1,000 companies forging ahead, ready to take their customers and profits.
I’m not sure that gambling is a good example because the odds are always in favor of the house, we know for a mathematical fact that we will always lose in the long term.* With a known risk like this we can only ask how much we are willing to delude ourselves.
Actually I think gambling is a pretty good example; particularly since you can always "play it safe" and get a guaranteed return on your money by not gambling. The point is, however, that when the pay-off is a tiny +3% but the risk is huge at -100%, who in their right mind is going to assume that risk? If you were so inclined, you could step a few feet over and risk your $100 for a 3,800% return on a single spin of the roulette wheel, or even a measly 100% - 150% return on a single hand of blackjack... If you expect people to take risks, the reward has to be in line with the risk you are asking them to assume, be it in gambling, business, or their personal lives.
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Hey Mike:
Had a conversation with the VP in charge of our location the other day. It was my second or third in 6 months. This conversation concerned the possibility of me taking over a troublesome department that could be fixed with some fundamentals put into place along with discipline and hardwork.
In management, every conversation with an employee is an opportunity to inspire that person to your way of thinking. To sell them into the paradigm that you would like to establish for success.
Let's just say that when I told him that I could fix the problems in the department with his backing, his response was a little underwhelming. "So you wanna be a hero?"
His tone was clearly sarcastic. So I just shut down my pitch, smiled and reassured him that I would be a "Team Player". The transfer to the new department took place without a hitch. I started the role of mediocre employee and I am seeing alot more of the family as a result. Let me preface by saying that this is a startup gone awfully awry...three years and counting.
I am not kidding you when I say without any other circumstances changing other than personnel changes - Three management transfers out of the department including
mine and one resignation 4 weeks ago - the production efficiencies plummeted from over 110% to 18% on a weekly basis.
One of his "Team Players" is churning and burning while us transferee's snicker in the background. Out of desperation, the newly appointed dept. manager called in one of us transferees last week to save a customer order. The VP came up to the final transferee and incorrectly thanked him for coming in...the transferee smiled and corrected him , recommending that he thank my buddy instead. It never happened.
Some people are outstanding in their ability to impose cults of mediocrity with - quiet efficiency...We're still laughin'...keeping the resumes polished and sending them out...but were still laughin'.
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Robert,
Sounds like you either have a great job (if you don't mind chugging along) or a bad one and need to look around. Management has a huge impact on things. Easy for them to make them worse, hard to make them better, especially if you don't have a good leader (sounds like you don't). Good luck there.
On Bill Gates, I'm not sure if he took a risk or not. That would be something he'd have to comment on. None of us can know if it was a risk to him. He came from a well-off family, but not sure if he had personal money. Bankruptcy when you're worth $2k isn't the same as $200k. Maybe it wasn't a risk. Maybe he's a high flier and didn't care if he lost it all? It's his view of risk.
20 years ago, if I'd gotten into a company with all of my $2k or $5k of savings, I'd have taken the bankruptcy risk. No spouse, no kids, strong and willing to work hard. I could have handled the total loss and picked myself up and moved on. 10 years later, I could have tolerated some risk, but with the lady that became my wife, we didn't want to go too far out on a limb. Now I'm conservative. Not too willing at all to take risks.
Risk is very subject to your frame of reference.
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Risk is very subject to your frame of reference.
I suppose it depends on whether you think of risk in terms of an all-or-none proposition ("it's a risk or it's not a risk") or not. In that scenario I guess you could round down low risk actions into the "no risk" end and eliminate the concept of degrees of risk in between ("very low risk", "low risk", "high risk", etc.)
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