Bill Taylor

William C. Taylor is cofounder of Fast Company magazine and author of Practically Radical: Not-So-Crazy Ways to Transform Your Company, Shake Up Your Industry, and Challenge Yourself, published January 4, 2011. Follow him at twitter.com/practicallyrad.

2:42 PM Monday June 20, 2011

Last month, in an article in the New York Times on the ever-escalating "war for talent" in Silicon Valley, Facebook CEO Mark Zuckerberg made a passing comment that has become the entrepreneurial equivalent of a verbal tick — something that's said all the time, almost without thinking.

"Someone who is exceptional in their role is not just a little better than someone who is pretty good," he argued when asked why he was willing to pay $47 million to acquire FriendFeed, a price that translated to about $4 million per employee. "They are 100 times better."

Zuckerberg's casual calculation reminded me of a conversation with Marc Andreessen, the legendary cofounder of Netscape, and now one of Silicon Valley's most high-profile venture capitalists. "The gap between what a highly productive person can do and what an average person can do is getting bigger and bigger," he told Polly LaBarre and me for our book,

Mavericks at Work. "Five great programmers can completely outperform 1,000 mediocre programmers."

Now, I admire what Mark Zuckerberg has built, and I consider Marc Andreessen without peer as an entrepreneur and a thinker, but do we take seriously what these two Silicon Valley giants claim about talent?

If you are building a company, would you prefer one standout person over one hundred pretty good people?

If you were launching a technology or developing a product, would you rather have five great engineers rather than 1,000 average engineers?

Have we become so culturally invested in the allure of the Free Agent, the lone wolf, the techno-rebel with a cause, that we are prepared to shower millions of dollars (maybe tens of millions) on a small number of superstars rather than a well-assembled team that may not dazzle with individual brilliance, but overwhelms with collective capability?

Isn't that what we see time and again with athletic competition, perhaps the closest thing we have these days to the frenzied competition in Silicon Valley? I spent Father's Day at Fenway Park, as the Red Sox hosted the Stanley Cup champion Boston Bruins to celebrate their victory. Nobody would suggest the Bruins had the best individual players in the NHL — throughout the year, the stars of the Vancouver Canucks shone much more brightly. But it was the Bruins' work as a team, a collective show of commitment and determination, that won the day. And what won on the ice won on the hardwood as well — LeBron James vs. the Dallas Mavericks, anyone?

Or think about the soccer pitch. Recently, The Economist published a brilliant little essay on the "management secrets" of FC Barcelona, universally considered the best soccer team in the world, perhaps of all time. "How has a club that is based in one of Europe's unemployment blackspots turned itself into the ruling power in the world's most popular sports?" the magazine asked. "An obvious answer is that Barca plays as a team in a sport that has far too many prima donnas...Barca has provided a distinctive solution to some of the most contentious problems in management theory. What is the right balance between stars and the rest of mankind?"

I'm with The Economist — and the Boston Bruins and the Dallas Mavericks. Yes, a big part of the transformation of business over the last 20 years has been a pendulum swing in the logic of success. The strong no longer take from the weak; the smart take from the strong. From an organizational and competitive standpoint, raw power, brand incumbency, and sheer size, have lost their luster as sources of success.

But it's possible for the pendulum to swing too far in the other direction. The latest trend in Silicon Valley, and the subject of the New York Times article in which Mark Zuckerberg explained his talent calculus, is called "acqhiring" — shelling out big bucks to acquire a company, not to buy a product or a piece of technology, but to hire a few (or even one) software programmer or engineer who will arrive at the acquiring company and make a huge impact. Facebook, according to the Times, is the pioneer of this new phenomenon, acquiring a slew of companies, killing their products, but keeping their developers.

Star-gazing entrepreneurs who are reluctant to look to sports for lessons in the limits of individual talent might instead look to Wall Street, and the research of Harvard Business School professor Boris Groysberg, captured in Chasing Stars.

Here's how Groysberg's publisher distills his insights: "After examining the careers of more than 1,000 star analysts at Wall Street investment banks, and conducting more than two hundred frank interviews, Groysberg comes to a striking conclusion: star analysts who change firms suffer an immediate and lasting decline in performance. Their earlier excellence appears to have depended heavily on their former firms' general and proprietary resources, organizational cultures, networks, and colleagues. There are a few exceptions, such as stars that move with their teams and stars that switch to better firms. Female stars also perform better after changing jobs than their male counterparts do. But most stars who switch firms turn out to be meteors, quickly losing luster in their new settings."

I'm certainly not suggesting that leaders who are growing companies or building teams should settle for mediocrity. But I am suggesting that there is more to long-term performance than the excellence of your individual players. Great teams, great companies, great organizations of all kinds are as much about character as credentials, about what makes people tick as much as what they know. Most of business life isn't really a choice between one great person and 100 pretty good people, but if that is the choice, I'm not sure I'd make the same choice as Mark Zuckerberg — especially if those 100 pretty good people work great as a team.

Part II

I'm pleased, although not surprised, by the incredible wave of reactions to and comments about my post, "Great People Are Overrated." (I'm also not surprised by the vitriol and personal nature of some of the barbs aimed at me. That seems to go with the territory whenever you question an article of faith among the web startup crowd.)

My guess is that the post touched a nerve because it touched on one of the great dividing lines in our business culture today. As members of an economy, a society, and a collection of companies, all of us are engaged in a conversation (sometimes explicit, mainly implicit) about what makes the world go 'round — individual brilliance or group genius, self-possessed superstars or well-rounded teams.

This is not a strictly either-or choice, of course. Even the best groups have stars, and not all stars find it hard to work well with others. But there remains the question of balance, priorities, even business mythology. If we're building a company, what sorts of people do we want to recruit? If we're paying our people, what sorts of contributions and behaviors do we wish to reward? If we're thinking about our country and society, what kind of outcomes are we comfortable with, in terms of wealth and income distribution? Ultimately, are we fielding a team, or assembling a collection of individuals?

As I said in my original post, the great sweep of business and innovation has increased the power of the individual and the small team over the lumbering herd. The "smart" do, in fact, take from the "strong." But like so much of what we do in America's startup culture, I worry that we are taking this basic insight to crazy excess, making the claim that one superstar engineer is literally more valuable more than one hundred good engineers (Facebook CEO Mark Zuckerberg) or worth more than 200 good engineers (Netscape cofounder Marc Andreessen). Or, as one of the commenters on my post suggested, one Shakespeare is worth more than 100 Bill Taylors.

On that last point I would certainly not disagree. But on the broader point, I think we're in for a major correction. It's worth noting that the debate over this post takes place during IBM's centennial celebration. Now, I'm excited by the rise of Facebook, the IPO of LinkedIn, and all the latest successes from the startup world. It's great stuff. But for IBM to celebrate its 100th anniversary as a company, to remain, despite wave after wave of disruptive technological change, as a world-shaping force for solving big problems and making a big difference — that's truly something to admire. I wonder where Groupon and LinkedIn will be a hundred years from now.

IBM has stayed in the game for a century because it understands that groups are as important as individuals, that character counts along with credentials. In Mavericks at Work, Polly LaBarre and I wrote about Extreme Blue, an IBM initiative to make the company more attractive to young hotshots that might otherwise gravitate to companies like Facebook and Google. But from the moment Extreme Bluers report for duty, they get immersed in a system that emphasizes group cohesion over me-first individual achievement.

IBM even produced a manual of sorts, called Staying Extreme, that describes the way talented young people do their best work. "To be clear," it warns, "when you leave Extreme Blue and join another group at IBM (or any other company for that matter), we will be watching. And if we find out that you are making the program look like we are producing a bunch of arrogant wannabes, we will forget we ever knew you. Be ambitious. Be a leader. But do not belittle others in pursuit of your ambition."

Several years ago, at the height of the last War for Talent, Malcolm Gladwell offered his version of this same corrective. In an essay called "The Talent Myth," the New Yorker writer looked at business's obsession with hiring the best and the brightest, and raised a bright red flag. The problem with this star-studded approach, he said, is the "assumption that an organization's intelligence is simply a function of the intelligence of its employees. [Some companies] believe in stars, because they don't believe in systems. In a way, that's understandable, because our lives are so obviously enriched by individual brilliance. Groups don't write great novels, and a committee didn't come up with the theory of relativity. But companies work by different rules. They don't just create; they execute and compete and coordinate the efforts of many different people, and the organizations that are most successful at that task are the ones where the system is the star."

The star of Gladwell's assault on the star system was Enron, a company that famously populated itself with the brightest lights of the most elite institutions, and then went down in flames. "The reasons for [Enron's] collapse are complex, needless to say," Gladwell concluded. "But what if Enron failed not in spite of its talent mind-set but because of it? What if smart people are overrated?"

It was the last question by Gladwell that inspired the title of my original post. The question he raised several years ago has come back with such a vengeance today. There is more to long-term performance than the excellence of your individual players. Great companies, great organizations of all kinds, are as much about character as credentials, about how everyone works together as well as how each person does his or her work. Winning teams are more than just a collection of talented individuals.

As I said in my original essay, this is not an argument for settling for mediocrity. But it is a plea for some sense of proportion. And in a world of endless booms and busts, bubbles and popped bubbles, Wars for Talent and extended periods of unemployment, proportion is not such a bad thing.

Oh, and to those of you (and there are many) who responded to my original post with such rancor and derision: if you conduct yourself at work the same way you conduct yourself in these online comments, you're kind of making my point. Maybe you should embrace a sense of proportion as well.