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The Cult of Mediocrity


The Cult of Mediocrity

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george sibbald
george sibbald
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Its interesting this editorial was first written in 2007, pre the credit crunch.

I wonder if the promotion of risk would be so enthusiastic now we know just how much risk banks were taking.

People have confused risk taking with gambling in recent years.

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Duncan Pryde
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Taking a risk for a big payoff is one thing, but many people (without any other kind of safety net - e.g. a wealthy family) will not want to experience the flip side of risk i.e. failure, given that it could entail losing their job or livelihood. Keeping what you have, which is tangible, is worth more than some intangible reward that may or may not come your way.

I'm all for taking a risk, providing I don't have to suffer too much if it all goes wrong!
TravisDBA
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Often the difference between a successful person and a failure is not that one has better abilities or ideas over the other, but the courage that one has to bet on one's ideas, to take a calculated risk and to act. Taking a risk is a gamble. Always has been. :-D

"Technology is a weird thing. It brings you great gifts with one hand, and it stabs you in the back with the other. ...:-D"
archie flockhart
archie flockhart
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The worship of 'risk-takers' seems to me to be based, at least in large part, on "survival bias": pointing at a few lucky people whose risks paid off.

There were far more 'risk takers' who tried to build flying machines and never got off the ground ( or worse, plunged to a messy end on the rocks below ); and thousands of people who set up computer companies that went broke, taking their founders' and investors' money with them.

The guy in this Dilbert cartoon is every bit as much a 'risk taker' as, say, Bil Gates.

[url=http://dilbert.com/strips/comic/1991-03-25/][/url]

As for "Joe"'s company in the article: encouraging risk and encouraging excellence are two different things.
TravisDBA
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archie flockhart (6/19/2012)
The worship of 'risk-takers' seems to me to be based, at least in large part, on "survival bias": pointing at a few lucky people whose risks paid off.

There were far more 'risk takers' who tried to build flying machines and never got off the ground ( or worse, plunged to a messy end on the rocks below ); and thousands of people who set up computer companies that went broke, taking their founders' and investors' money with them.

The guy in this Dilbert cartoon is every bit as much a 'risk taker' as, say, Bil Gates.

[url=http://dilbert.com/strips/comic/1991-03-25/][/url]

As for "Joe"'s company in the article: encouraging risk and encouraging excellence are two different things.




But that's life. Progress always involves risk; you can't steal second base and keep your foot on first. :-D

"Technology is a weird thing. It brings you great gifts with one hand, and it stabs you in the back with the other. ...:-D"
Mike C
Mike C
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Duncan P (6/19/2012)
Taking a risk for a big payoff is one thing, but many people (without any other kind of safety net - e.g. a wealthy family) will not want to experience the flip side of risk i.e. failure, given that it could entail losing their job or livelihood. Keeping what you have, which is tangible, is worth more than some intangible reward that may or may not come your way.

I'm all for taking a risk, providing I don't have to suffer too much if it all goes wrong!


That's risk mitigation, an integral part of any risk analysis. Minimizing your losses in the event of failure is extremely important.
j_e_o
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The bottom line is that if a company does not take sufficient risk to maintain or increase their market share then ultimately they will spiral down into oblivion and be forced to put up the "Going out of business" sign. Therefore, to avoid insolvency, companies must ask their employees to identify strategies, that involve risk, to improve or maintain the bottom line.

Lehman Brothers is a great example of companies that "gambled" rather than take calculated risks. What they did was criminally irresponsible and, quite frankly, stupid. Their methodology was comparable to any pyramid scheme: the "value" of the mortgage backed securities could only be sustained if the properties that backed them "never" depreciated. That expectation was patently ridiculous over time but it sure looked good in the short term.
Mike C
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TravisDBA (6/19/2012)
Often the difference between a successful person and a failure is not that one has better abilities or ideas over the other, but the courage that one has to bet on one's ideas, to take a calculated risk and to act. Taking a risk is a gamble. Always has been. :-D


Agreed. No one makes movies about the ancient Roman middle managers who lived a safe, comfortable life filing documents. The people who are remembered are the ones who do great things. It's rare to find people who accidentally stumble into greatness without taking risks.
TravisDBA
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j_e_o (6/19/2012)
The bottom line is that if a company does not take sufficient risk to maintain or increase their market share then ultimately they will spiral down into oblivion and be forced to put up the "Going out of business" sign. Therefore, to avoid insolvency, companies must ask their employees to identify strategies, that involve risk, to improve or maintain the bottom line.

Lehman Brothers is a great example of companies that "gambled" rather than take calculated risks. What they did was criminally irresponsible and, quite frankly, stupid. Their methodology was comparable to any pyramid scheme: the "value" of the mortgage backed securities could only be sustained if the properties that backed them "never" depreciated. That expectation was patently ridiculous over time but it sure looked good in the short term.


As Forrest Gump used to say, "Stupid is as stupid does". That is very different from calculated risk taking and or taking a calculated gamble. For example, if someone decided to rob a bank, or burglarize someone's house, or pull a Bernie Madoff or Scott Rothstein, well thats' just stupid decison making. Nothing more. :-D

"Technology is a weird thing. It brings you great gifts with one hand, and it stabs you in the back with the other. ...:-D"
archie flockhart
archie flockhart
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That is very different from calculated risk taking and or taking a calculated gamble.


But if you asked anyone at Lehmann at the time they would have told you that they were doing"calculated risk taking". You can't easily tell the reckless gambling from the supposedly calculated risk taking, except with hindsight. And probably not even then: some reckless gambles do come off, and the people who made them are then treated as sages and gurus, rather than just having been especially lucky.
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