The Myth of the Bell Curve

According to Josh Bersin (Principal and Founder, Bersin by Deloitte), business has a lot to learn about understanding and evaluating human performance and achievement. Some of the standard tools that have been employed for decades cause managers to draw imprecise and unacceptable conclusions.

“There is a long standing belief in business that people performance follows the Bell Curve (also called the Normal Distribution). This belief has been embedded in many business practices: performance appraisals, compensation models, and even how we get graded in school. (Remember “grading by the curve?”)

“Research shows that this statistical model, while easy to understand, does not accurately reflect the way people perform. As a result, HR departments and business leaders inadvertently create agonizing problems with employee performance and happiness.”

Read Josh’s complete, and very interesting, comments here.

Open Travel and Industry Mythology

This analysis appeared August 12, 2013 in Cornerstone Information System’s “Insight & Opinion” section.

You may have heard of something called “open travel” or “open booking,” that is about to change corporate travel procurement. It says that travelers will book whatever they want as long as they don’t exceed budgets and fulfill other vague management requirements, such as paying with a corporate credit card.

Travel Management Companies will have to find new roles (no one is quite sure what those might be) and corporate travel managers will see their responsibilities changed, or substantially diminished.

Proponents of this new travel management strategy, which include some substantial travel buyers and data managers, assure us that travelers are buying where the want anyway, so clearly it’s best to make the best of the inevitable.

What’s interesting is that this isn’t new.

Prior to the mid 1980s, when consolidating travel procurement with a few designated travel management companies became popular, it was the default purchasing system–set your budget and let the rest take care of itself.

I’m confident that proponents of “open travel” believe that technology has advanced so much over the last 30 years that the essential management problems that resulted in consolidated travel management are no longer issues.

If we simply wait long enough, smart phones will solve everything–they’ll even change human nature.

Can Less Be More?

There are few analytical reports describing open travel’s effectiveness–those that do exist are contradictory and most are poorly executed(i). As a business strategy, open travel advances several logical fallacies that we should try to avoid:

Hasty Generalization

It doesn’t necessarily follow that because some, even most, travel management programs perform poorly and that they are at odds with new technology, that all such programs must do the same.

It also doesn’t follow that travelers in general will make informed and rational purchasing decisions absent a centrally managed travel program because some travelers appear to do so, for some of their trips, at least some of the time.

Open travel’s proponents need to conclusively demonstrate that the business rules they suggest the industry adopt are not based upon the behavior of a small sample operating under exceptional conditions.

Faulty Dilemma

Because there are clear shortcomings with travel management practice, we are not necessarily left with a “strength through weakness” strategy that allows travelers to book whatever they want as the alternative. There are other choices.

The Big Picture

Centralized travel management exists because it is effective. Vendors extend favorable pricing and other services to purchasers because they believe the benefits exceed the cost.

Part of what vendors presume is that travel managers will influence selection and behavior. Travel programs that consistently deliver such results are those that succeed.

Why would vendors offer similar benefits where buyers stop trying to do these things Control is an essential component of preferred pricing, and open travel is signal for higher prices, not lower.

The mythology of the travel industry asserts that technology allows individuals to find as good or better discounts in the marketplace as are available through managed travel programs.

Again, that’s nothing new, the assertion has been made for as long as there have been centralized travel programs. In practice there are always exceptional situations, but consistently poor discounts are signs of a poor travel programs, not testimonials for open travel.

Technology makes traveler shopping somewhat easier, but it doesn’t make informed buyers or change human behavior. Again with exceptions, travelers do not usually share the management goals of their companies–part of a travel manager’s role is to provide structure for those goals.

A traveler’s agenda is more personal and can always be validated by countless rationalizations and “this time is different” conclusions. There is no lack of creativity in this area.

To expect individual and company goals to align so as to correctly and consistently influence individual traveler behavior is to assume that people will stop behaving like people because they have better smart phone applications and are free to use them.

Open travel is less efficient than centralized travel management, not more. It assumes pricing practices that don’t today exist, people acting in ways they don’t normally do, and, even if these point are granted, that it is the best use of a traveler’s time to research prices and keep sufficiently informed so as to make good decisions.

It’s a theory that assumes much and delivers little.
(i) Unless a study describes a sound methodology, an adequate sample size, and the precise questions it tried to answer, which is almost never the case, it falls into this category. Please see my paper on this topic.

Managers and Leaders

In a 1961 address, President John F. Kennedy called for the United States to commit itself to “landing a man on the moon and returning him safely to the earth” before the 1960′s ended. This goal was advanced together with a number of other national goals the president put forth at that time.

The space program, undoubtedly among the most enlightened and visionary initiatives of the 20th century, brought about untold advances in all scientific fields.  Among its short-term goals was to show the superiority of U.S. science, engineering, management, and political leadership.

Kennedy speaks of the initiatives he has just announced and says that we choose to go to the moon in this decade and do the other things,

“Not because they are easy, but because they are hard.”

Few of us will be called upon to motivate an entire nation to action, but in the small ways we are asked to lead others, remember Kennedy’s words and also remember that doing hard things is not only possible, it creates often insurmountable obstacles to competitors and adversaries.

Managing for peak performance is one of the most difficult tasks you’ll ever attempt.  Whether your business is large or small, and whether you have major development projects in progress or simply want someone to handle training for three people, the formula for managing technology routinely eludes most people.

The first key to managing is recognition that management is the wrong word and the wrong premise.

I’ve always taken the somewhat extreme position that few things of real worth were ever built, assembled, found or perfected by managers.  True excellence in any field comes from differentiating between managers and leaders.

Once that step is made, it’s possible to do truly great things.  An army lead by managers is composed of conscripts and mercenaries because the people actually doing the work neither wholly believe in nor accept the cause for which they labor.

Likewise, projects or offices staffed by people who just put in their time as long as their paychecks keep coming are ultimately destined for mediocre results from partial commitments and average efforts.

Only when an army is truly led, and when the efforts of the participants are measured by the fact that they wish they could do more, do conscripts become patriots.

In a business sense, the ability to go beyond what everyone else is doing or to take a giant step is driven by personal commitments from exceptional people–the kind who will do anything for the right leader.

Leadership is so elusive that you almost never see it in business. No doubt you can think of many people who have been reasonably successful while managing.

But if you know of anyone who did something extraordinary in business–developed a radically new product, launched an enterprise with no capital and little experience, or did what others had tried to do and failed–chances are part of the reason is that this individual stopped managing and started leading

Given enough money, time and staff, you can complete a project and get workable results–results that also will be fairly common (uncreative), rigid and not years ahead of the competition, by managing people who simply put in time.

Most businesses find this formula too expensive and limiting to be useful.

Achieving the exceptional result–something very difficult to replicate and extremely valuable to your business–depends on attracting, motivating, leading and keeping the right people. Don’t blame the staff for the lesser result–the fault is usually at the top.

Ernie Pyle, the great World War II news correspondent, once wrote that the success of any enterprise is determined by the morale of the group. Morale, he said, depends on two factors: commitment to the team and complete confidence in its leaders.

  • A leader stands at the head of the group and asks the other members to follow as he addresses the tasks before them.  A manager asks the group members to work as hard as they can, but measures his own success by different standards.
  • A leader doesn’t ask anyone to do things he hasn’t or wouldn’t do it himself. A manager thinks most jobs are for underlings and that he has “special skills.”.
  • A leader shows the kind of genuine commitment to the project he expects everyone else to show; by implication, he wouldn’t be involved if he didn’t believe in the project. A manager just follows orders and puts in time.
  • A leader has the highest professional and personal standards. A manager will often tell others to do what it takes to get by.
  • A leader holds his position because he’s shown he has what it takes to get the job done.  A manager often occupies his position because he’s been there the longest, knows somebody or just happened to be appointed to the position.
  • A leader doesn’t necessarily know everything, but as long as he can apply the skills of other experts, the project can succeed.  A manager feels he might fail personally if someone else is shown to know something he perhaps should.
  • A leader puts the project first–if it fails he fails. A manager usually has somewhere else to affix blame.

The biggest problems to be faced in any type of project are almost always management, and not operations-based. To successfully overcome them, you don’t need smarter people: you need to become the type of person smarter people will follow.  You and I can both look at most organizations in our industry and see that they’re not performing at peak efficiency.

Morale, something most managers never seem to notice, is among the primary indicators.  Leadership doesn’t wholly take the place of money, or the right tools, or skilled professionals, but it does give these elements a chance to do something really useful.

You can produce real competitive advantages, but you’ll rarely ever succeed until leadership becomes first priority.