Saturday, October 24, 2015

Performance, The Bell Curve and The Long Tail

I’ve always found it interesting that we tend to try and plot most everything on a Bell Curve. We talk about averages and standard deviations as though God ordained that all of creation must fit this pattern. We even try to simplify it further by forcing data points into quartiles. Or we talk about elevating the average. Lead, train and motivate those who are below average to average or better. And if you believe in “normal” distributions, there is a meaningful difference between those down in the 33rd percentile compared to those up in the 66th percentile.

But what if we’re not talking about the Bell curve. What if the outcomes do not fit neatly into a bell curve? What if force ranking people and performance into percentiles or quartiles doesn’t really make much sense. What if human performance isn’t distributed normally? Instead of looking like this:

What if it looked more like this:

What this says and what we tend to see in the real world, is not a Bell curve with significant deviation from the average, but a relatively flat line where there is not much separating all those people in “the middle”. In virtually any human performance related area of life, you will find a small number of exceptional individuals who are truly peak performers. Then it drops quickly and levels off until you reach the very end of the tail where the bad apples hang out. Within the top 20% there is a big difference. There is typically a larger performance gap between those in the top 5% and those in the top 15-20% than there is between that 15-20% group and those whom we would typically rate well-below average (whatever average means.)

In 2012 two college professors published the results of a study of over 600,000 individuals in different fields and concluded that, indeed there are a small number of high performers and a small number of low performers…the vast majority of people are in the middle and there isn’t much difference.( Dr. Herman Aguinis and Dr. Ernest O’Boyle’s paper was published in the Spring 2012 issue of Personnel Psychology. It’s worth reading and, in my opinion, squares with what we see in the real world. These comments from Dr. Aguinis are worth noting:

"All five of our studies suggest that organizational success depends on tending to the few who fall at the 'tails' of this distribution, rather than worrying too much about the productivity of the 'necessary many' in the middle."

The bottom line, according to Aguinis, is that everything about individual performance has to be re-evaluated so managers can identify and go after lead performers.

"These people will be desirable to outside firms, so success means thinking about excellence and improvement all the time, talking with top performers continuously to find out what they need to grow and advance," he said. "Rating them once a year, based on a bell curve, will send top performers -- and profits -- right out the door."

So what does this mean for those of you who are just trying to run a business that gets stuff from point A to point B? We’ll talk about that next time.

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