U. WARWICK (UK) — We should resist the temptation to learn from and imitate the most successful people, a new study suggests.
Successful people don’t like to have their success explained by luck, while audiences, too, seem unwilling to acknowledge the role of luck in determining success. As a result, the stories of the most successful attract the most media attention. These outliers are perceived to be the most skillful, and so receive the highest rewards and get imitated.
However, the idea that exceptional performers are the most skilled is flawed, according to research published in the Proceedings of the National Academy of Sciences by Chengwei Liu, assistant professor of strategy and behavioral science at Warwick Business School and Jerker Denrell, a professor at Oxford Saïd Business School.
The reason is that exceptional performance often occurs in exceptional circumstances. Top performers are often the luckiest people, who have benefitted from rich-get-richer dynamics that boost their initial fortune.
Consider a college dropout who turns out to be the wealthiest person in the world. Yes, Bill Gates may be very talented, but his extreme success perhaps tells us more about how circumstances beyond his control created such an outlier.
Stated differently, what is more exceptional in this case may not be Gates’s talent, but the circumstances he happens to be in.
For example, Gates’s upper class background enabled him to gain extra programming experience when less than 0.01 percent of his generation then had access to computers; his mother’s social connection with IBM’s chairman enabled him to gain a contract from the then leading PC company, generating a lock-in effect that was crucial for establishing the software empire.
Of course, Gates’s talent and effort play important roles in the extreme success of Microsoft. But that’s not enough for creating such an outlier. Talent and effort are likely less important than the circumstances (e.g., network externalities generated by customers’ demand for software compatibility boosted Gates’s initial fortune enabled by his social background) in the sense that he could not have been so successful without the latter.
A rational learner should realize that it is more useful to draw lessons from the less exceptional performers, the second best, because their circumstances are likely to be less extreme, implying their performances are more informative and offer more evidence for skill.
“Humans, however, often rely on the heuristic of learning from the most successful. Our research found that even though observers were given clear feedback and incentives to be accurate in their judgment of performers, 58 percent of them still assumed the most successful were the most skilled when they are clearly not, mistaking luck for skill,” says Liu.
“This assumption is likely lead to disappointment—even if you can imitate everything Bill Gates did, you will not be able to replicate his initial fortune,” adds Liu. “This also implies that rewarding the highest performers can be detrimental or even dangerous because imitators are unlikely to achieve exceptional performance without luck unless they take excessive risk or cheat, which may partly explain the recurrent financial crises and scandals.”
The lucky few should understand and appreciate the role that luck played in their extreme success, and with that understanding comes an obligation to those that have not. The lucky few may be more skillful than others eventually, but the way they gain their superior skill can be due to strong rich-get-richer dynamics combined with the good fortune of being successful initially.
This can justify a higher tax rate for the richest when their extreme fortune is accumulated in the fortunate fashion defined in this research.
This research also has important implications for learning and goal setting for individuals, organizations and society. Media and popular business books often advise on how to learn from the most successful with a goal of moving from ‘good to great’.
This research suggests that following such advice is likely to lead to frustrations and wasted resource, as it requires luck rather than talent to be exceptional. Instead, learning from the second best and setting the goal of moving from “poor to good” may be more constructive not only for individual learners but also for business and society collectively.
Last but not least, rewarding the second best when it’s clear that extreme performance cannot be achieved without luck, excessive risk-taking, or cheating may be a solution to avoid recurrent crises and scandals. But since a non-linear relationship between performance and reward is counterintuitive and may be perceived as unfair, policy-makers need to design “nudges” to help people resist the temptation to reward or imitate the top performers.
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