How Everyone Can Be Best…NOT

August 17, 2007  

Today I received a research study on business trends. Trend #2 was “Innovation.” They said…

“Only 50 percent of the executives surveyed believe their organizations are ‘top in class’ in innovation. This number shows that there is room for organizations to grow in their approach and position on innovation.”

Huh?

That’s like saying, “Because only 50 percent of drivers are better than average, there is room for improvement.”

Of course there isn’t. You can only have 50 percent of the people being better than average. That’s what the definition of average is!

Hard to believe there can be more than 50 percent who are “top in class.” Must be one heck of a class.

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3 Responses to “How Everyone Can Be Best…NOT”

  1. Anne Okkels on August 18th, 2007 8:56 am

    Quite a fan of your blog, I completely follow your argument. It’s impossible for everyone to be top-of-class and if every executive believed his firm was top of class that would just go to prove that he did not have an accurate sense of the firms position.

    Apart from that – if all firms focus too much on innovation, they might end up throwing out the baby with the bathwater.

    Concerning the definition of “average”, however, you’re a bit off the mark: 50% on either side, that’s the definition of the median, not of the average. So actually, there would be room for improvement, provided that the rest of the firms were so incredibly non-innovative, that they lowered the average level sufficiently.

  2. Stephen Shapiro on August 18th, 2007 9:29 am

    Thanks for your comment. Great point about average being “mean,” not “median.” You are so correct.

    When talking about best in class, people are typically referring to a form of “median.” That is, when someone is in the top half, they are better than the median, not better than average.

    Regardless, my point about best in class companies is still accurate. Assuming best in class means (at least) in the top half, no matter how much companies improve, we can still only have half of the companies in the top half.

    But you are correct. Being better than the “average driver” does not necessarily mean you are in the “top half of all drivers.”

    Thanks for pointing out my faux pas!

  3. Roland Turner on August 22nd, 2007 9:22 am

    It all rather depends what “class” means. Most executives would likely interpret this as “market”, in which case 50% (allowing for delusions of grandeur) is not a bad guess.

    Granted, not everyone has Welch’s courage (exit all businesses in which we’re not #1 or #2).