If you asked the median economist for investment advice, they’ll likely tell you to buy an index fund. It performs well over time, across many market scenarios, and spreads out the risk.
If you asked me my philosophy for building teams,I would tell you to build teams that produce consistent measured progress rather than erratic performance swings or complete stagnation.
I think of work like an input/process/output (IPO) model. The team is the process. Inputs come in, the team processes those inputs, and the outputs are business progressing products. If you want your team to make better outputs, you need to carefully select for a few factors.
- Perspectives and approaches.
- Raising the team’s equilibrium of agreeableness by maximizing hiring undervalued people with extreme talent at the margins of human capital distribution for a given function.
- Optimize healthy creative abrasion.
Perspectives and Approaches
I don’t know that true uniformity exists in an absolute sense in nature. Variation is part of the game and part of what makes a healthy ecosystem.
For teams to make consistent progress amidst whiplash and erratic changes to the business, you must have variation in perspective and approach on the team. Like an index fund – a wise manager spreads out the risk by having a diverse stock of human capital on the team. Bet the market vs betting an equity.
Raising the Equilibrium of Agreeableness
In Gridlock, a paper by Scott Baker and Michael Gilbert, suggests that a designer of an institution (read: team builder) would get better outcomes by picking with polarized views and creating incentives and structures to find compromise. I’m oversimplifying the ideas.
Practically, the wise manager seeks to introduce new ideas and approaches to the team in order to for the competing views to compromise and create steady forward progress.
Additionally, the varied perspectives insure the manager and the firm against poor decision making processes.
Optimizing for Healthy Creative Abrasion
Multiple perspectives and styles are useful if a manager can foster a team spirit that celebrates healthy creative abrasion — the act of debating ideas and presenting competing alternatives for the purposes of finding the right answer.
Managers create an environment for this magic to emerge by keeping themselves open to new ideas. Asking team members to prove the manager wrong. Celebrate when individual contributors actively contribute to the work of others. I’ll write more on team dynamics in later posts.
Principle: Cover your weaknesses, build for steady progress, and spread your risk.
The timeliness wisdom to not have all your eggs in one basket, diversify your portfolio, invest in the market (as a whole), and to build a team of rivals is seen across subjects, cultures, and time.
Talent Revolution 