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.(http://newsinfo.iu.edu/news/page/normal/21237.html). 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.

Alienation, Anger and Virtual Gangs

Another shooting rampage occurs and we search for answers. It makes sense to talk about better gun controls. And, we should be talking about security on school campuses, workplaces, shopping centers, theaters, churches and just about any place where large numbers of people gather and become easy targets. And we should be talking about violence in the media and violent video games. And, of course, we should be talking about mental health.

We can point the finger at guns and say that’s the reason the United States has more of these mass killings. But the fact is that we’ve been a “gun culture” for over 200 years. Why are there more of these events today than there were 20 or 30 years ago? What has changed? A lot. For generations families, churches and schools were responsible for teaching kids “how to behave”. Were there failures? Of course. The record is there. Mass murderers, serial killers and monsters of all kinds have been around forever. But, on balance, when families, churches and schools were doing their job; there were not quite so many alienated and angry young people walking around.

Most of these alienated and angry people end up with others who are alienated and angry. These groups have different names, but “gang” seems most appropriate. Whether the focal point is a neighborhood, a race, a lifestyle or a religion; there are plenty of gangs out there for the alienated and the angry. And we now have the “virtual gang” where the alienated and the angry can join and participate anonymously. These virtual gangs are the breeding ground for “lone wolf” killers. Here their complaints are heard, their anger fueled and their acts of vengeance encouraged. A “real gang” tends to direct its member to attack strategic targets and even their random targets tend to have a strategic purpose. The “virtual gang” that meets in a chat room has no strategy. It’s all raw emotion and fantasy. And for most of the members, that’s enough. Virtual venting, emotional masturbation if you will, is gratifying enough.

But increasingly, there are those who feel compelled to act. And in a culture where guns are the most accessible weapons of choice, mass shootings are the result. Gun ownership is not going away in this country. Regulations may become more restrictive and enforced more stringently, but guns are here to stay in America. And sometimes the wrong people are going to get their hands on guns. Just like “the wrong people” sometimes get behind the wheel of a car, practice medicine, get elected or have babies. Those institutions that were traditionally responsible for teaching us “how to behave” are broken. We now feed our kids self-esteem pablum and anti-anxiety medications. The cracks are getting bigger and more of our children are falling through. Some of them end up with guns. We may eventually find ways to keep them away from guns. And, in doing so, perhaps save some lives. But we are not addressing the real problems and ultimately those who are the most alienated and angry will find ways to strike back. There is probably already a “discussion thread” going on about it out there in some chat room.

It Ain't Over 'Til It's Over

As one gets older, one notices it when people die. One occasionally goes online to scan the obituaries in the old hometown newspaper. At first, it’s mostly older people whose names you recognize. An old teacher or coach. The grandparent or parent of someone with whom you grew up. The neighbor down the street. And then people closer to your age start popping up and it reminds you that time marches on and death awaits us all.

When famous people die it’s news. Mostly I don’t pay much attention and it sort of puts me off when some of these “famous” people get so much attention for doing so little. The passing of athletes, actors or musicians usually garner more headlines than those of educators, scientists, business leaders, great writers, theologians and, yes even politicians whose contributions may be so much greater.

So when an old baseball player passes away, I may take note, but then move on. Usually. Not so much with the passing of Yogi Berra. He was more than just a great baseball player and a successful baseball manager. He was more than just a bunch of great quotes that will continue to live on in our culture. To me he represented the baseball world I grew up in. He was toward the end of his career when I really started following the game. He was the same age as my father. Like my father, he was a WWII combat veteran. But unlike my father, he had found his passion and was good at what he did. Growing up in the Depression and going off to war did not break Yogi as it had others, including my father.

While as kids we may have dreamed of being the next Mickey Mantle, as adults we came to respect guys like Yogi Berra. Guys who stayed with the game and respected the game. The steady guys who were dependable. The guys who could mix humor and humility in a way that players and fans could appreciate. Not heroic figures with leading man good looks. Just average Joe’s who showed up every day and did their job. His kind will not soon pass this way again.

Why Do Companies Hire the Wrong People?

As we celebrate the Labor Day holiday it only seems fitting that we talk about a work-related topic: “Why Do Companies Hire the Wrong People?”. At some point in your career you will ask this question. Either you will have hired the wrong person, or you will be working for the wrong person or YOU ARE the wrong person. As a headhunter, I live smack-dab in the middle of the hiring process on a daily basis. I see best practices, worst practices and everything in between. Before becoming a headhunter, I worked in the transportation industry for many years. And, I must raise my hand and confess that I have hired the wrong person, worked for the wrong person and been the wrong person.

A good portion of my work involves helping people recover from bad hiring decisions, both companies and candidates. I also spend a good deal of time trying to keep companies and candidates from making bad hiring decisions. Bad hires are bad for my business. And even if I am not the one who makes the decision to hire someone and I’m not the someone who makes the decision to accept the offer; everyone still likes to blame the headhunter when it turns out badly.

So I have thought long and hard about this “hiring the wrong people” question. And I have come up with a simple answer: Companies hire the wrong people because they don’t know how to hire the right people. Sometimes they get lucky and hire the right person by accident. And depending on their process, they may make more good hires than bad hires. And sometimes, even when you hire the “right person” it doesn’t work out. But that’s another conversation. This one is about HIRING THE RIGHT PERSON as often as possible.

Back in May of 2014 I wrote a couple of blogs about hiring and pointed out that there were five primary factors to consider: 1)Talent, 2)Skill, 3)Work Ethic, 4) Attitude and 5) Experience. In those articles, I noted the difference between talent and skill. I also made a point about the value of “relevant and meaningful” experience. I also stated that testing and assessments, if done correctly, are very worthwhile. But if done incorrectly, they unnecessarily shrink the pool of qualified and capable candidates.

So back to the question, Why Do Companies Hire the Wrong People? It’s simple: They do not thoroughly evaluate and verify the five primary factors which determine fit for the position. If any one of these is lacking, it will likely turn into a bad hire. Too many companies decide that a candidate is an “A player” because of their experience and their interview skills. If a candidate has a strong resume, some good references and interviews well , that’s good enough for some companies. It’s assumed that the candidate possesses the requisite talent, skills, work ethic and attitude to be successful or….well, they would not be successful. And clearly they have been successful, right?

You want to hire the right person for the job? Figure out the requirements in terms of talent, skill, work ethic, attitude and experience. Hire against those requirements, evaluate and verify as much as possible. And don’t get blinded by A+ experience and polished interview skills. Candidly, in most cases you’re better off with someone who is a “B” in all five categories than you are with a person who is an “A” in four and an “F” in one. If you can avoid hiring that person who is clearly lacking in one or more of these five critical areas, you most likely will not hire the wrong person.

Too many companies want to hire “the best” person. So when they find someone who is an exceptionally strong match on what they consider to be the most important requirements for the position, they are willing to overlook a gap or weakness in what they consider to be an issue of lesser importance. My question is always this: When it comes to Talent, Skill, Work Ethic, Attitude and Experience; which one of those are you willing to sacrifice? How good would the candidate have to be to make up for falling short in one of these five areas? In my opinion you’re better off with someone who is “good enough” in all five than you are with someone who is a superstar in four and seriously lacking in one. The exception to that would be “skill” in positions where you can train the person for skill. If I can get them up to speed on skills, then I’ll take the superstar every time. But the farther you move up into the organization, the more you need to be hiring people who “check off” all five boxes.

You want to avoid hiring the wrong people? Hire the right people.


"I used to think business was 50 percent having the right people. Now I think it's 80 percent."
-Kevin P. Ryan

Popcorn

"Of course life is bizarre, the more bizarre it gets, the more interesting it is. The only way to approach it is to make yourself some popcorn and enjoy the show.”- David Gerrold


I appreciate technological advancements, in theory. In practice, I am a skeptic. If I have something that works, I am not much inclined to reach out for something that claims to work better. I held on to my Blackberry until the bitter end. The combination of observing all of the things my wife could do with her Samsung smart phone and the sheer humiliation of having small children point and laugh when they saw me using the Blackberry, finally pushed me over the edge last year and I got a MotoX. It’s still not the fanciest device out there and it’s not cool. And I use it mostly for the same stuff for which I used the Blackberry. But, now I am only 5 years behind the techno-curve, not 15.

I jumped on the iPAD several years ago. I didn’t have anything else that could do what the iPAD could do, so I wanted one. It’s now an old, old iPAD and people keep telling me I should upgrade. This one does what I want done, I am happy. I will wear it out, then upgrade to something that has probably been around for at least two years.

I was early on the e-readers. Bought one of the first Kindles. Still using it. See no need to change. It does what I want done. Leave me alone. I still do not download music to my phone. I just don’t see a need for it. I have music on my computer and in my home. When I go on a long-walk or work-out, I don’t want the distraction. I don’t need music playing in the background. When I listen to music, I really listen to music.

My wife is more easily bored than I am and she’s not a big reader. So when we travel, she wants to watch TV shows and movies on her iPad. She has a Netflix account and goes on about all of their great programming. I don’t like watching shows on the iPad or even on my computer. And, I wasn’t sold on connecting streaming video to our big screen TV. But, my wife knows how to work me, so she starts sending me links to the various types of devices which are available to “easily and affordably” connect ones television to the internet.

I finally gave in and purchased a Roku 3 device. Little did my wife know that she would create a monster. I am now binge watching Orange Is The New Black and House of Cards. I’ve started a half dozen other series and will eventually binge on them once I get caught up on OITNB and HOC. And now that I can get You Tube on the big screen, I can watch my favorite scenes from my favorite movies. I mean who doesn’t like the “Ecstasy of Gold” scene from The Good, The Bad and The Ugly (other than my wife)?

I remember many years ago, my mother resisting the gift of a microwave oven. She had a perfectly good electric toaster oven for warming up leftovers and the microwave seemed dangerous and unnecessary. What finally won her over was microwave popcorn. She and her dog loved microwave popcorn. Once popcorn opened the door, she embraced her microwave and it became her go to appliance.

Those who develop technology and more importantly those who market it should take note. If you want to sell to the mainstream; find out what they like….then give it to them. Not bad advice, no matter what you’re selling.

The Game Is Changing….Demographics & Tipping Points

“The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.”
― Malcolm Gladwell, The Tipping Point: How Little Things Can Make a Big Difference


Technology tends to change the game over a relatively short period of time. We can measure the changes in months and years. Demographic changes tend to be measured in decades and generations. However, the IMPACT of changing Demographics tends to hit quickly and significantly once those changes reach a tipping point. My sense is that we have reached “tipping points” on multiple fronts and these “tipping points” will have radical impact on how we produce, distribute and consume goods and services in the future. Technology may indeed be the great “enabler” when it comes to many of these changes, but the motivation is very much human.

So what are some of these changes or tipping points that are impacting transportation and logistics? One that clearly jumps to mind is the shortage of truck drivers. This is the result of a long cycle of changing trends, demographics and regulations. There are literally dozens of reasons why we do not have enough truck drivers. Some are unique to trucking and some are larger issues which also explain why we don’t have enough skilled tradesmen (or tradeswomen for that matter). They include things like fewer kids growing up on farms and having early exposure to equipment and manual labor; or the push for all kids to go to college and the devaluation of “blue collar” careers; or the perception of trucks being bad for the environment; or just considering the pay as being too low for the required time and effort. Tighter regulations which the society has chosen to impose for safety reasons have an impact. Lower birth rates within the traditional truck driver demographic have an impact. The list could go on forever. Bottom-line, there have a been a multitude of fundamental changes which have resulted in a critical shortage of truck drivers.

Another example of a major tipping point is the growth in e-commerce retail. What Amazon is doing to retail is a game-changer for transportation and logistics service providers. Products are suddenly purchased and distributed much differently. If your business is built around DC to store delivery, and if the product can be effectively sold and delivered via e-commerce, your business is in trouble. On the other hand, if you are in the final mile B to C delivery space, opportunity abounds. But so does risk depending on how you’ve built your business.

Changing demographics tend to drive changes in politics which in turn create major changes for businesses. For transportation companies, a political environment that tends to be pro-union and anti-independent contractor is bad news. If we continue down this path through a couple of more election cycles, the transportation system as we know it will be completely changed. We could well end up paying more money for poorer service. There will be winners and losers and if you are not prepared to play the “new game” you will lose.

And whatever your business model, you will need some people involved. Which again brings us back to changing demographics. I’ve commented about this before in discussing Millennials in the workforce. You simply cannot manage people the way you did twenty years ago. It doesn’t mean that this New Generation Employee is bad. In many ways, they are better and given all of the other changes going on in the world, very likely to be more productive over the long run. But they are different. They think about work-life balance differently. They think about employee-company loyalty differently. They think about rewards differently. They think about communication and feedback differently.

The game has changed. Learn to play the new game or cash in your chips.

The Game Is Changing….Technology

Last week I wrote that we were entering a new and different world when it comes to doing business. There are fundamental changes occurring that are forcing transportation and logistics service providers to adapt or else. One of the most significant game changers is technology. For those of us old enough to remember what it was like doing business before computers and cell phones, today’s information and communication capabilities are truly amazing. I have been fortunate enough to sort of ride along on the wave of technological advancements and I cannot imagine doing business the way we used to.

Back in the mid-60’s, Gordon Moore, co-founder of Intel, wrote a paper stating that essentially computing power would double every 2 years. It became known as Moore’s Law and has turned out to be a fairly accurate prediction. Some even say that the “doubling cycle” is only 18 months. There are various opinions regarding how long this exponential explosion can go on. In theory, at some point, we reach diminishing returns. But certainly, in my adult lifetime, Moore’s Law seems to hold true. As a result, I think it’s fair to say that we humans are now trying to catch up to technology. What can be done with technology is way out there, just waiting for application and adaptation. If you can imagine it, it’s possible. In fact, it’s likely to become reality within your lifetime. At some point, the discussion turns to ethical considerations about the creation, development and maintenance of life forms. I’m not going there. Just read Mary Shelley’s Frankenstein.

Interestingly enough, the way technology is being used these days in managing the supply chain can be somewhat “Frankenstein-ish.” And when you hear the horror stories associated with “system conversions” or “new installs”, there is a tendency to step back and say maybe we’re trying to do too much with technology and let’s just get “back to the basics”. Sorry, you can’t go back. The basics are on the move and you better keep pace. As noted above, we humans are trying to catch up to technology. No question, sometimes application design is poor, training is lacking and implementation/execution fails. But it’s the human element that is failing here, not the technology.

I would say that most transportation and logistics companies would do well to stay close to the leading edge when it comes to technology. But, let other industries or companies with deep pockets do the pioneering. This is still a fragmented, low-margin business and the only thing worse than expensive new technology is expensive new technology that doesn’t deliver . The key is to constantly examine every function in your business and figure out how you can do it better. Don’t think technology first. Think process and improvement and how you can do it better. If it takes technology to get there, then determine if is it economically feasible and do you have the people who can and will use it? Technology is not the end all. But if you fail to take advantage of what’s out there, you will lose the game.