“Geniuses are dangerous.”
— James March
How many organizations would deny that they want more creativity, more genius, and more divergent thinking among their constituents? The great genius leaders of the world are fawned over breathlessly and a great amount of lip service is given to innovation; given the choice between “mediocrity” and “innovation,” we all choose innovation hands-down.
So why do we act the opposite way?
Stanford's James March might have some insight. His book On Leadership (see our earlier notes here) is a collection of insights derived mostly from the study of great literature, from Don Quixote to Saint Joan to War & Peace. In March's estimation, we can learn more about human nature (of which leadership is merely a subset) from studying literature than we can from studying leadership literature.
March discusses the nature of divergent thinking and “genius” in a way that seems to reflect true reality. We don't seek to cultivate genius, especially in a mature organization, because we're more afraid of the risks than appreciative of the benefits. A classic case of loss aversion. Tolerating genius means tolerating a certain amount of disruption; the upside of genius sounds pretty good until we start understanding its dark side:
Most original ideas are bad ones. Those that are good, moreover, are only seen as such after a long learning period; they rarely are impressive when first tried out. As a result, an organization is likely to discourage both experimentation with deviant ideas and the people who come up with them, thereby depriving itself, in the name of efficient operation, of its main source of innovation.
Geniuses are dangerous. Othello's instinctive action makes him commit an appalling crime, the fine sentiments of Pierre Bezukhov bring little comfort to the Russian peasants, and Don Quixote treats innocent people badly over and over again. A genius combines the characteristics that produce resounding failures (stubbornness, lack of discipline, ignorance), a few ingredients of success (elements of intelligence, a capacity to put mistakes behind him or her, unquenchable motivation), and exceptional good luck. Genius therefore only appears as a sub-product of a great tolerance for heresy and apparent craziness, which is often the result of particular circumstances (over-abundant resources, managerial ideology, promotional systems) rather than deliberate intention. “Intelligent” organizations will therefore try to create an environment that allows genius to flourish by accepting the risks of inefficiency or crushing failures…within the limits of the risks that they can afford to take.
We've bolded an important component: Exceptional good luck. The kind of genius that rarely surfaces but we desperately pursue needs great luck to make an impact. Truthfully, genius is always recognized in hindsight, with the benefit of positive results in mind. We “cherrypick” the good results of divergent thinkers, but forget that we use the results to decide who's a genius and who isn't. Thus, tolerating divergent, genius-level thinking requires an ability to tolerate failure, loss, and change if it's to be applied prospectively.
Sounds easy enough, in theory. But as Daniel Kahneman and Charlie Munger have so brilliantly pointed out, we become very risk averse when we possess anything, including success; we feel loss more acutely than gain, and we seek to keep the status quo intact. (And it's probably good that we do, on average.)
Compounding the problem, when we do recognize and promote genius, some of our exalting is likely to be based on false confidence, almost by definition:
Individuals who are frequently promoted because they have been successful will have confidence in their own abilities to beat the odds. Since in a selective, and therefore increasingly homogenous, management group the differences in performance that are observed are likely to be more often due to chance events than to any particular individual capacity, the confidence is likely to be misplaced. Thus, the process of selecting on performance results in exaggerated self-confidence and exaggerated risk-taking.
Let's use a current example: Elon Musk. Elon is (justifiably) recognized as a modern genius, leaping tall buildings in a single bound. Yet as Ashlee Vance makes clear in his biography, Musk teetered on the brink several times. It's a near miracle that his businesses have survived (and thrived) to where they're at today. The press would read much differently if SpaceX or Tesla had gone under — he might be considered a brilliant but fatally flawed eccentric rather than a genius. Luck played a fair part in that outcome (which is not to take away from Musk's incredible work).
Getting back to organizations, the failure to appropriately tolerate genius is also a problem of homeostasis: The tendency of systems to “stay in place” and avoid disruption of strongly formed past habits. Would an Elon Musk be able to rise in a homeostatic organization? It generally does not happen.
James March has a solution, though, and it's one we've heard echoed by other thinkers like Nassim Taleb and seems to be used fairly well in some modern technology organizations. As with most organizational solutions, it requires realigning incentives, which is the job of a strong and selfless leader.
An analogy of the hare and the tortoise illustrates the solution:
Although one particular hare (who runs fast but sleeps too long) has every chance or being beaten by one particular tortoise, an army of hares in competition with an army of tortoises will almost certainly result in one of the hares crossing the finish line first. The choices of an organization therefore depend on the respective importance that it attaches to its mean performance (in which case it should recruit tortoises) and the achievement of a few dazzling successes (an army of hares, which is inefficient as a whole, but contains some outstanding individuals.)
In a simple model, a tortoise advances with a constant speed of 1 mile/hour while a hare runs at 5 miles/hour, but in each given 5-minute period a hare has a 90 percent chance of sleeping rather than running. A tortoise will cover the mile of the test in one hour exactly and a hare will have only about an 11 percent chance of arriving faster (the probability that he will be awake for at least three of the 5-minute periods.) If there is a race between the tortoise and one hare, the probability that the hare will win is only 0.11. However, if there are 100 tortoises and 100 hares in the race, the probability that at least one hare will arrive before any tortoise (and thus the race will be won by a hare) is 1– ((0.89)^100), or greater than 0.9999.
The analogy holds up well in the business world. Any one young, aggressive “hare” is unlikely to beat the lumbering “tortoise” that reigns king, but put 100 hares out against 100 tortoises and the result is much different.
This means that any organization must conduct itself in such a way that hares have a chance to succeed internally. It means becoming open to divergence and allowing erratic genius to rise, while keeping the costs of failure manageable. It means having the courage to create an “army of hares” inside of your own organization rather than letting tortoises have their way, as they will if given the opportunity.
For a small young organization, the cost of failure isn't all that high, comparatively speaking — you can't fall far off a pancake. So hares tend to get a lot more leash. But for a large organization, the cost of failure tends to increase to such a pain point that it stops becoming tolerated! At this point, real innovation ceases.
But, if we have the will and ability to create small teams and projects with “hare-like” qualities, in ways that allow the “talent + luck” equation to surface truly better and different work, necessarily tolerating (and encouraging) failure and disruption, then we might have a shot at overcoming homeostasis in the same way that a specific combination of engineering and fuel allow rockets to overcome the equally strong force of gravity.