Saturday, October 31, 2009

the best celebrate when the bar is raised

It makes sense doesn't it?

Back at NYU Stern, we used to have something called the Stern curve.
It meant that a set proportion of people got A's, A-'s, B's and so on, no matter what the actual test scores were.

The argument as to whether this is the best system for an educational environment is for another post, but one thing is certainly true - a lot of the world operates like this. It's rarely about the actual ability of your product or service, and more often about how what you bring to the table compares to what everyone ELSE brings.

If you're the best we can get, then we've got to have you!

Now, in the Stern world, an interesting mindset evolved in the students who felt themselves to be among the best. They actually WANTED the class to be has hard as it possibly could. This was for two reasons:

1. They knew that they didn't have to get 95% of the questions right to get an A because the curve dictated that if they did the best, they were guaranteed an A.

2. If the class was easy, then it would be easier for ALL THE OTHER kids to do just as well. If the whole class gets between a 90 and 100, then the kids getting 90's end up with B-'s at best. Harder classes created more room to differentiate yourself and prove that you really DID know it better than everyone else.

Applying these rules to the business world, we find that the best companies love it when the bar is raised, because they know that being judged against harsher standards will not only make it clear that their product is superior, but will also inherently make their product better (because they want to STAY superior). Naturally, demanding groups of consumers benefit - not only can they tell which products are truly the best, but they succeed in forcing companies to listen to them!