As this November, we're celebrating the fifth anniversary of my "Ergodicity" book, I decided to organize a workshop on the topic.

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Managerial Transitions

I was recently asked what the key skill is for a manager transitioning from one role to another.

I answered with a thought experiment. Imagine a successful volleyball coach moving to basketball coaching. Some skills, such as locker room management, are probably highly transferable. Others are less so, and some must be learned from scratch. But the most important skill the former volleyball coach must acquire, which he cannot delegate to any assistant, is the ability to correctly evaluate the performance of basketball players.

If a manager cannot correctly assess individual performance, praise those who do well, and reprimand those who do not, things will break down quickly. Good performers will feel frustrated that their efforts apparently do not matter, at least not to their coach, and will wonder why they should bother. Poor performers will notice that they can get away with subpar work, and will act accordingly.

In this sports scenario, players still have incentives to perform well in the eyes of the media to land sponsorships and in the eyes of opposing coaches to attract better contracts. However, in a company, these incentives are much weaker, especially if we consider companies whose hires are not extremely ambitious. What dominates is the incentive to perform well in the eyes of one's boss, the person with the most direct control over their bonuses and promotions.

This is why one of the most important skills for any manager or supervisor is the ability to evaluate the performance of their subordinates. This is especially relevant for roles whose performance cannot be assessed quantitatively and must be judged qualitatively. If the manager cannot spot quality, their team will not produce it.

Moreover, this skill must apply not only to evaluating overall performance, but also to assessing performance in each separate task. A manager who can only judge the overall performance will struggle to stimulate improvements in individual skills. One needs to be able to say, "Your overall performance is good, but you can do better at X and Y." And add, "Your good overall performance is no excuse for not improving at X and Y, because they are necessary to reach the next stage."

This is why one of the key areas I work on with my clients is the following question:

Are you, and are the managers in your organization, able to assess how managers manage people, not only by looking at bottom-line metrics, but also by examining what they actually do?

Otherwise, you will end up like a basketball coach who only praises or reprimands his team based on the final score. It seems logical, but it does nothing to improve skills. It separates the link between input and output, and leads to worse performance in the future.

(share as a blog post)

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Poverty and Prosperity

A few days ago, I just published my latest book!

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Tweets & Quotes