Betting on talent: A dead Scottish philosopher’s problem
He nervously looked past the gate, took one small step…and crashed.
It was my 5 year old son’s first hockey session with the Timbits program. The kids all had white stickers on each side of their helmet, marking them with a unique number for “the scouts.” An evaluation already? My son has as much experience skating as I have composing Italian operas. But some of these kids are good. Were they power skating during the summer? A nearby parent shouts something encouraging down to the ice, “Con Fuoco!” – that must be my imagination.
I soon learn that the 6 year olds are out there too. What a difference a year of experience makes. But will it matter longer term? Placing a bet that the 6 year olds have a better shot of making the NHL than the 5 year olds would be preposterous. Eventually, the difference in experience balances out and there are other factors more important in determining success.
But this is the trap decision makers fall into, whether building talent in a company or selecting CEOs for their investment portfolio. Most of our knowledge used to make decisions is obtained from induction, or by experience. We put weight on the experience of people. The insight of David Hume (our dead Scottish philosopher) is that induction does not necessarily prove anything. The track record of an individual may be a string of good luck. Or perhaps another person will simply do a much better job given time in the role.
How much experience did the CEO of Constellation Software, Mark Leonard, have in running a public company before it IPO’d? The scouts may have missed this one if they focused too much on inductive reasoning. The stock is up 10 fold since. The lesson? A balance is necessary between inductive and deductive reasoning. The scouts must also draw upon logical conclusions from key long term factors, factors like work ethic, tenacity, core purpose and motivation.
Week two at the hockey rink…fewer crashes – we’ve learned to glide! Skating backwards will require some work though…