Psychopaths and Leadership

With the recent rape allegations around Dominique Strauss-Kahn, the former head of the International Monetary Fund. Jon Ronson’s book on psychopath’s is interesting, he finds that psychopaths are 4x more likely to be at the top of organizations than at the bottom. It’s interesting that some of the traits that can make you certifiably insane as described in Robert Hare’s psychopath test, can also help you rise to the top of organizations, such as a grandiose view of self worth or superficial charm.

You can take the psychopath test here (note – not entirely sure why the test is on a dating site, but it works) and Jon Ronson’s recent book on the topic is here.

Winning The Lottery And Speed Skating – Outcomes vs. Process

It’s important, but hard, to separate good process from good outcomes. Often it’s assumed that any good outcome, must reflect a good process and vice versa. But in risky situations this approach could lead you to make major mistakes. Assume you win the lottery. Now, you now have a very large amount of money, but that does not change the fact that lotteries are, as Adam Smith said, “a tax on idiots” and the expected return on any lottery ticket is negative – there are much better ways to spend your money. So just because people win the lottery each week does not mean playing lottery is a good idea (unless you like losing money). So playing the lottery is a bad process, but there’s a chance you hit a good outcome. In fact, it happens every week.

I’m just using the lottery as an example to show that in many cases closer to home, we might be making the same mistake. For example, your project finished ahead of schedule, but how much of that is due to good process that can be repeated? And how much is due to luck? The answer comes down to how good your process is.

Of course, there’s a more positive side to this too, just because you didn’t get the outcome you wanted didn’t mean the process was bad. Speed skating at the Winter Olympics is a good example of this, it takes many years of dedicated training to enter the Olympics, but in a speed skating race you can easily get pushed over by a competitor, and it might be totally out of your control. It doesn’t mean you shouldn’t have won gold, but it means you didn’t win goal. Good process, bad outcome.

So what to do in situations where risk means that outcome and process aren’t totally tied together?

Two things can help:

• Repetition – over time processes and outcomes will converge where risk is present. You might get lucky on one project, but across ten it’s far less likely. Look for multiple instances of a situation before forming a judgment.
• Analysis – good process can be supported by analysis. If something went wrong or poorly look at why it happened. Luck can often be identified with logical analysis – a good process should make sense and be robust.

	Bad Outcome	Good Outcome
Good Process	Changes could make things worse	Ideal situation
Bad Process	Process improvement needed	Unsustainable luck

The Best Or The Cheapest

Michael Porter describes strategies that successful businesses should pursue. Cost leadership is one example – being the cheapest. Differentiation is another -building something that is sufficiently different, and hard to copy, that people will pay for more it.

Like most solid reasoning, Porter’s approach sounds fairly obvious – implementation is the challenge. With that in mind two recent posts in HBR and TechCrunch highlight what these approaches look like.

Differentiation

• 1111 Lincoln Road – is a parking garage with such striking architecture that people want to get married there.
• The Henry Ford Hospital – is a hospital so well laid out that it feels like a hotel.

Cost Leadership

• The Raspberry Pi Initiative – is a plan to build a PC for $25

Will your next project driving to one of these outcomes? It’s easy to end up with average cost and limited differentiation, it’s much harder to be extreme on one or the other, but extremities are where the real value lies.

1111 Lincoln Road Parking Garage, Joe Vare via Flickr

Henry Ford Hospital via Flickr

The Raspberry Pi, A $25 PC

Goalkeepers and Decision Making

During penalty kicks, goalkeepers have a choice to make. Frequently this is put in terms of whether they should dive to the left or the right. However, there is another option – stay in the center.  It turns out that staying put is a good option according to academic research. 28.7% of the time, kicks come to the middle area of the goal and these kicks are much easier to save. However, doing nothing is hard. As a result goalkeepers only stand in the center during  6% of penalty kicks.

It is a goalkeeper’s job to save goals. Yet, they behave in a way that makes them less effective. The reason being that it’s incredibly hard to simply do nothing, especially if something bad happens as a result.

The next time there’s a problem, and you feel the urge to “do something”, consider if it’s really necessary, or just something that will make you feel better.