A Bell-Curve World

Welcome to Headhunter Secrets, where I’ll share perspectives about the search business. We hope you’ll use our services to execute searches. Nonetheless, I wanted to give you some insights I’ve gained from doing search work since I was 23 years old.

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A Bell-Curve World
It’s not just for school grades

Most everyone out there is familiar with the concept of the bell curve, a graph that shows most values clustering around the middle, with fewer and fewer values appearing as you move toward the extremes on either side. The classic bell curve, referred to as having a “normal distribution,” is perfectly symmetrical. It looks like a hill that has identical left and right downward slopes from the middle, which, in the normal distribution, is the mean, median, and mode. 

If you were ever “graded on the curve” in school, your teachers were using a bell curve system to adjust scores based on overall grade distribution as opposed to a fixed standard. The most common view was that 10% of students were really bright (the highest achievers), 10% of students were struggling (the poorest performers) and the other 80% of students fell in between. 

Many years ago, I used to say that we live in an “80-20” world, which is from an old sales profession saying: “Eighty percent of sales are generated by 20% of the salespeople, while 20% of sales are generated by 80% of the salespeople.” 

For many years, my thinking was that 80% of the value in life was created by 20% of the population, while 20% of the value in life was created by 80% of the population. I also applied this rule to companies and their employees: Twenty percent of the people in a company create 80% of the value, while 80% of the people in a company create 20% of the value.

But after many years of work experience, I decided that we don’t live in an 80-20 world. We live in a bell-curve world. I describe that world this way—

Ten percent of people wake up every morning, look at themselves in the mirror and think, “What value can I create today?” These people are constantly driven to create value. It is their nature to do so, always. 

Eighty percent of people wake up every morning, look at themselves in the mirror and think “What do I have to do today?” These people are mostly looking to contribute what’s expected of them. Their focus is more “go along to get along” so they can maintain their jobs/lifestyles. Many of these people do so because they are in the middle period of life, where children, mortgages and lifestyle distract them from work.

Then 10% of people wake up every morning, look at themselves in the mirror and think “What can I avoid doing today?” These are the obvious poor performers.  

In a relatively stable economic environment, most employees in a given company will distribute along a normal curve. But when something upsets the balance, the shape of the curve can change. Let’s look at investing as an example.

Although investment returns do not always fit neatly into a bell curve with a normal distribution, they often do during periods of relative market and economic calm. But when outside events show up, like an unexpected industry gold rush, a war or some major catastrophe, a normal curve will get skewed toward one direction or another and create what are called “fatter tails” either at the left end of the curve (more negative results) or right end of the curve (more positive results). 

When there are major disruptions in the economy, fatter tails will also appear in the work world. Some people in the middle of the bell curve won’t be able to handle the dramatic change, while others in the middle of the bell curve will find the motivation to step up and shine.

This concept of a bell curve may be something you ponder when hiring people. It may also be something you consider when evaluating your own efforts and setting goals.
How do we spot those top 10% performers? How do we become one of those 10% performers? Maybe re-read my previous essay, The Four I’s.

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Hope these insights are helpful. 

We at Leyendecker have been doing search work for 40 years. We’ve completed over 100 C-level searches, most for CFOs. Most have been PE portfolio companies, but we’ve also helped owner/managed and publicly-held companies. Our placements have helped their employers go through almost 50 successful liquidity events.  

Keep us in mind when you seek talent that will get you over the goal line! Hope you have a great year!

Doug