Saturday, December 7, 2019

The 10k hr Rule - Another Perspective

College baseball: Jefferson CC gets going again with thin roster, plenty of  enthusiasm | College Sports | nny360.com

Why the Famous Finding May Not Mean What You Think

By now, everyone knows this one: On average performers must put in 10,000 hours of deliberate practice in order to attain expertise.

Not to split hairs, but, the average number is actually closer to 11,000.  But, that's less critical.  The 10k-hours-or-10-year-rule sounds catchier anyway.  What's more critical, and more striking--yet hardly, if ever, mentioned--is the range of hours.  

In one study of chess experts, one player reached master level in 3,000 hours while another took 23,000 hours.  The true working range for attaining mastery in many domains may be even wider, perhaps 5,000 to 45,000 hours. Who knows.  Sure, the average may settle on a nice quotable number --10 years or 10,000 hours-- but that doesn't tell us much.  It certainly doesn't buttress the rabidly pro-nurture conclusion that typically accompanies the 10k hour discussion.  

When we read about the 10k-hour rule, we eagerly latch onto two comforting takeaways: 
  1. "Anyone, even I, can attain world-class skills;" and 
  2. "Given the findings, I now know what's needed to do so: commit to a uniform practice regiment of about 10k hours!" 
Unfortunately, that's not quite true. The sheer range behind that average effectively undercuts both of those takeaways.

Look at it this way.  If a thousand hours works out to be about a year of practice, the range discussed above represents a difference of several decades!  Hardly a uniform practice regiment. And here's another way to look at it: Some people need to practice 8-9 times as much as others to reach the very same level of proficiency.  (Talk about injustice!) 

Why would this be? What explains that vast difference in training requirements?  Most likely it's what experts call The Matthew Effect: People innately more gifted in a given dimension respond better to training.*  As David Epstein points out in his book, The Sports Gene , the participants initial traits and  conditions matter-
"If one person learns each chunk in nine seconds and the other person eleven seconds, those small differences are going to be amplified.  [sic] It's a sort of butterfly effect of expertise.  If two practitioners start with slightly different initial conditions [...] it can lead to dramatically different outcomes, or at least to drastically different amounts of practice that will be required for similar outcomes." 
And people always have different initial conditions.  Always.  So, to say that environmental factors fully explain expertise is misleading. If we mean that given enough time engaged in the right or "deliberate" practice, most people can attain a given threshold of performance…ok, maybe. But, in most worthwhile pursuits, it's not the absolute performance level that matters--it's the relative performance that matters.  It's not enough to practice a bunch and get good at, say, hitting a baseball. You have to hit better than the other guys (many other guys).  

Certainly in any field where people compete for a finite number of slots--say professional athletics or medical surgery-- those who start out with an innate advantage will dominate those slots. If you're just a little faster or a little smarter, you'll respond better to training.  Perhaps just a tad better; but as Epstein points out those small difference amplify over time. In other words, innate factors make all the difference. While time in the practice arena will determine our fate, it's often our genes that serve as the ticket to the practice arena.
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*Or to paraphrase Matthew in the New Testament, “The rich get richer…”  



Friday, August 9, 2019

Seeking Attractive Industries


When you check the research, the greatest determination of an organization's success is the industry in which it operates.  Profitable markets spawn profitable businesses.  

Several studies come at this conclusion, from different directions. Perhaps most notably, McKinsey has published some great analysis of what they call the "industry effect," showing the economic profits along power curves for different types of firms.  That industry drives performance is no doubt true: the data is clear and it’s compelling.  


Chart: McKinsey & Company, "The industry effect"  Extracted from web-site article on Insights.  
Source reference Strategy Beyond the Hockey Stick, book written by Chris Bradley, Martin Hirt, Sven Smit

But, the data can also be deceiving.  Because when we read things like this we’re typically looking for advice, to see how how the info applies to our own situations. “What does this mean to me?” we want to know.   In this case, McKinsey's finding probably doesn't mean too much.  Not only is the “industry effect" apt to be mostly irrelevant, it can also be dangerously misleading. 

Such research answers the question “What’s most closely correlated with success?” or even “What explains success?”  It does not answer the question “What business should I as an individual pursue or what business should we as a company diversify into?”  

It’d be a big mistake to conclude from McKinsey’s research that the firm should pursue opportunities based primarily—or even mostly—on the attractiveness of the target industry.  Obviously, we can’t ignore the entire issue of internal compatibility.  As the consultants will tell you, market analysis is easy, change management is hard.  In fact, when you balance the basic considerations of strategic expansion— internal compatibility and external opportunity—internal compatibility factors invariably weigh heavier.  

Why?  Because we’re never starting from ground zero. Businesses have dedicated assets in place, strengths and weaknesses, and experience with key industries or operating agendas.  For a given entity in any given game, we’re building on existing experience.  In reality, the question is not what best explains success in the abstract or for companies in general.  The question is “Along which path are we able to out-execute our competitors?”  (Note this doesn’t mean we have to execute particularly well. It only means we have to be able to out-perform the average competitor.)     

A way to see the glaring fallacy is to consider how this would hold for individual career decisions.  Career data would certainly show that, say, surgeons and investment bankers command higher than average compensation.  But, of course, we couldn’t conclude from this data that if you personally wanted to make more money you should pursue a job as a neurosurgeon.  On average, surgeons and bankers may make more, but, you’re not concerned with the average person, you’re concerned with you.  Specifically, you’re concerned with the expected value—the payoff—you would get in a career shift.  And odds are that for a given person the expected compensation impact of a switch to neurosurgery would be negative.  Why?  Again, we’re not starting at ground zero.  As individuals we’ve studied topics, developed strengths and interests, and we’ve accumulated experience and contacts in specific industries and functions.  If you’ve taught middle school for 25 years, your expected earnings for staying in education will undoubtedly exceed that of a switch to med-school—even if the data shows that doctors earn more than teachers.  In short, in contemplating career moves, you’ll weigh internal factors much more heavily than you will external factors.  

Thus, we arrive at a paradox: while the external market is the most important explanation (post-facto) of economic profitability, it’s probably the least important factor in the strategy decision.  Put another way, such results are remarkable at the macrolevel—for the theorist —and irrelevant at the microlevel—for the practitioner.