Friday, January 9, 2009

Leadership and the Herd Mentality

In any large population, the distribution of the people in the population will be represented by a Bell Curve. That means that ninety-five percent of the population will fall within two standard deviations of the median. By definition, two and one half percent of the population will be at the upper end, outside the two standard deviations, and two and one half percent will similarly be located at the bottom.

I am not particularly concerned over the dregs of the group because they will almost never be successful or provide any meaningful contribution. The upper two and one half percent will almost inevitably be leaders. The rest of the group will tend to follow a herd mentality. You see examples of this everywhere. In the entertainment industry, any time that a new popular show is developed, multiple clones always appear shortly thereafter. Every time a new band creates a buzz, other record labels will come up with similar acts in short order. Production of new fashion lines, toys, consumer products, computer innovations, etc. all follow the same pattern. The innovators and producers of new and imaginative products will be followed by the knock offs and the similar, if not quite as good, products. In some cases, when a product has been rushed to market, the newer product may be an improvement. The use of the herd mentality is an advantage in some circumstances. On Wall Street, the few truly inventive and innovative investors can use the fact that the herd will follow to their advantage when buying and selling stocks and commodities.

In any large organization, an analogous population distribution will exist. One of the difficulties in leadership is to recognize who the upper group is among the herd. To do so requires patience and foresight. An intrinsic quality of innovators is that they are not afraid to try new ways to do things and take risks. The taking of risks means that inevitably some attempts at improvement will be unsuccessful. To punish people for taking risks which do not work is to discourage anyone from trying to improve any process. It breeds an environment of safety in which no one does anything new in fear of making a mistake. The military is becoming such an organization. One adverse fitness report can stop your career as an officer. There are a couple of reasons for that. First, unless you are a mass murderer, no one gets a bad fitness report. Unless a weakness is so obvious so as not to be ignored, it is glossed over and a bland positive report is generated. Second, since no one gets a bad fitness report, any minor weakness actually reported stands out as a major problem because no others exist in the majority of reports. This environment discourages honest reporting and creates a herd of vanilla, bland officers who do everything by committee to share responsibility and will not take risks. I have pointed out in the past a large number of successful military leaders (Grant, Patton, Sherman, etc.) who couldn’t even get promoted to positions of leadership today because of their political incorrectness. One of the differences in the American military in World War II was that the majority of the military members were not career oriented and just wanted to win the war and go home. Therefore, they weren’t worried primarily about their careers.

Senior leaders should have the best interest of the organization in mind and not their own personal job security. A good leader can always get another job. The good leader allows their people to innovate and take risks and realizes that mistakes will happen. The good leader recognizes the difference between mistakes due to incompetence and mistakes made in good faith while trying to improve processes and does not punish the latter. The true leader encourages innovation and risk taking. Only in this way, will an environment be created which will lead to improvement and new ideas and not to a stagnant and unchanging organization.

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