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Regardless of the root causes of people’s differences, the key insight to remember is that people really are different. What’s going on in your head isn’t the same as what’s going on in someone else’s head.
By contrast, larger organizations employ many specialists, who can usually get better outcomes than generalists because of their long-term specialist experience.
Often higher roles involve different skills, such as more people management and less individual contribution, which may cut against someone’s strengths or career goals. To counteract the Peter principle, organizations can develop multiple career tracks, such as a technical leadership track that doesn’t require people management.
The consequence-conviction matrix can help you free up your time as a leader, and also categorize situations into learning opportunities for your team members. You can even apply this matrix to family situations. For example, we try to have our kids attempt things that won’t cause much harm if they fail, such as buying something at a store themselves or making their own lunch.
If you set high expectations for your kids or colleagues, that alone will likely not be enough to propel them to reach their full potential. But setting low expectations or lacking expectations altogether will likely create a significant barrier for them and prevent them from reaching their full potential. Again, being explicit can help: if people understand what they are shooting for, they can rise to the occasion.
While the Dunning-Kruger effect explains what happens psychologically across the whole learning curve, it is often used to refer to just the first spike, i.e., the phenomenon where low-ability people think they are high-ability, unable to recognize their own skill level (or lack thereof) in a particular area. This is really the opposite of impostor syndrome: instead of thinking they are much worse than they are, they think they are much better than they are.
The questions to ask are how accurate your risk assessment was at the time, and whether it could have been any more accurate given the time and resources available. Answering these questions moves you away from black-and-white thinking (the event was totally predictable or not) and into more nuanced thinking (considering how predictable it really was).
Another way to counteract hindsight bias is to take notes as events occur in real time. That way you have a more objective record of what happened and are not relying solely on potentially compromised recollections.
For example, different families have different norms for resolving disputes: some talk openly about emotions, some hardly ever; some have heated discussions, some much less so. What is the norm in your family?
Similarly, two highly functioning organizations can have widely different norms and processes for information control (open versus need-to-know), communication delivery (spoken versus written), how new ideas get proposed (ad hoc versus formal), punctuality (always on time versus flexible), and many other dimensions.
While new hires can grow accustomed to a new culture, they may be resistant initially. So the more up-front you are about the culture of the organization, the better. In fact, being explicit about your cultural norms is one of the most high-leverage activities you can do as an organizational leader (see Chapter 3). It can help prospective team members figure out whether your organization is a good fit for them. Strengthening cultural norms also helps existing team members work together more efficiently.
But there’s another way of using time that’s common among people who make things, such as programmers and writers. They generally prefer to use time in units of half a day at least. You can’t write or program well in units of an hour. That’s barely enough time to get started.
Next, you must be wary of culture eroding as your organization grows. Consider Dunbar’s number—150—which is the maximum group size at which a stable, cohesive social group can be maintained. (It’s named after anthropologist Robin Dunbar.)
Two other well-known breakpoints are when the size of a small organization or team reaches about ten to fifteen people and when it further expands to between thirty and fifty.
The other extreme is perfect competition, markets where many competitors provide the exact same product, perfect substitutes (also known as commodities). A thirty-two-ounce bottle of isopropyl alcohol is thirty-two ounces of isopropyl alcohol no matter whom you buy it from. If a commodity supplier raises prices, you just buy from another supplier at the lower price. Consequently, these commodity providers have no market power.
A secret can also be how to turn someone else’s good idea into a great idea. Thomas Edison didn’t invent the lightbulb, but his concerted efforts made it long-lasting and commercially viable.
Politician Rahm Emanuel offers this perspective: “You never want to let a serious crisis go to waste. And what I mean by that [is] it’s an opportunity to do things you think you could not do before.”
For a first mover, the difference between success and failure hinges on whether they can also be first to achieve product/market fit. That’s when a product is a such a great fit for its market that customers are actively demanding more.
Pivoting is usually difficult because it cuts against organizational inertia, involves openly admitting failure, and requires finding a better direction, all at the same time. But it can also be necessary. Pivoting is appropriate when your current strategy is not going to bring you the results you are seeking.
When you truly understand what job people are really trying to get done by using your product, then you can focus your efforts on meeting that need. Asking customers what job they really want done can tell you the root of their problem and eliminate faulty assumptions on either side, ultimately resulting in a solution with a higher chance of success. In your analysis, you want to figure out what job your product is really currently doing and where it might be miscast, as in the milkshake example (see 5 Whys in Chapter 1 for a tactical technique).
