Before we begin...
We are adding a full-fledged program in Marketing & Growth to serve marketing professionals at Stoa!
Tonight, at 8 pm, Manoj Kambadur, Raj Kunkolienkar, Sharmad Kuvelkar, and I plan to talk about what our philosophy and program offering are going to be. We will also share some lessons we learnt over the last 3 years.
Now, let's move on to today's essay.
The other day I came across a paper on why mediocrity is so prevalent. Its ideas struck a chord with me because every day, I notice all of us engage in such behaviour in some area of our lives.
Some of us buy low-quality products that break down soon after purchase. Most of us read only headlines and summaries of news articles and freely opine using that resource. All of us trade off health in exchange for junk food.
Professionally, we get complacent in our daily jobs because of the comfort and familiarity they provide.
Perhaps I am being foolish by citing some of these examples because we are all aware when we cut corners in the hope that it doesn’t get caught. Or maybe I am just sick of all the ChatGPT-generated emails I receive lately.
But let’s unpack why some of it happens using the case discussed in the paper.
In the paper, two academics discuss that Italy is notorious for people promising to exchange high-quality goods and services (H), but then something goes wrong, and the quality delivered is lower than promised (L).
It is safe to say that such behaviour isn’t typical of Italy. We see examples of this constantly in our daily lives. Work deadlines discount the quality of output in a team; teamwork, at times, jeopardises the quality of output because of internal misalignment; initial excitement for a project is replaced by repeated tasks, which makes people lose interest in doing it as well as they did. The reasons are countless.
Sadly, all of them boil down to preferences where we allow for the “anything goes” mindset to take over. Different groups mutually agree to receive low quality provided that they too can, in exchange, deliver low quality without embarrassment. The paper sarcastically highlights —
“We argue that cooperation is not always for the better: high quality collective outcomes are not only endangered by self-interested individual defectors, but by ‘cartels’ of mutually satisfied mediocrities.”
So, how do such exchanges transpire where mediocrity is usual?
Let’s say two people agree to trade some units of good x for some units of good y. Assume for simplicity that goods can be produced at two levels of quality, High (H) and Low (L).
- H is both more rewarding to receive and more costly to produce than L;
- H takes more time, effort, skills and organization. This excludes goods that have only one level of quality — if one pays to have someone murdered, one will regard a non-lethal wounding as a failure to deliver.
- There might be domains in which H-ness is undefined, such as art and fashion, in which the lack of objective criteria of quality makes H complex. We will limit ourselves to considering cases in which the criteria to establish H-ness are not controversial.
Our two persons can agree to trade at HH or at LL. For instance, they can both agree to be punctual so that neither will waste any time or to allow some flexibility in which either may waste some time waiting. Or one can agree to present a new presentation in a board room and be paid or recycle some old work which isn’t as helpful.
If both deliver what they promise and agree on, even if the exchange is LL, all ends well.
Problems arise if the two individuals agree on H, but one of them delivers an L.
In lots of deals, there's a risk: people who are clever but not very fair like to give you low-quality stuff (L) instead of high-quality stuff (H). Surprisingly, even though they want high quality for themselves, they're okay giving you the lower quality. This happens quite often in a market with information asymmetries, i.e., a market for lemons.
In this bargain, the person or group of people who end up being the sucker deliver an H but get an L — eventually becoming cynical and slipping into dishing out Ls occasionally.
Now, here's what's more interesting. The plot twists when two parties agree on H but deliver an L, and yet:
- Nobody seems to complain. (!)
- And when one complains if they get an L in spite of delivering an H, the L-party seems more annoyed than apologetic. They seem to treat this as excessive fussiness. (!)
- H-doers do not seem to receive much admiration; on the contrary, they elicit suspicion.
Have you noticed this around you?
While the superior quality of work does get you far ahead from a personal standpoint and is its own reward, constantly producing it invites suspicion. It is almost as if you are expected to slip up eventually and settle into that state.
In fact, the paper goes on to highlight how Italians typically behave when they encounter H outcomes.
- ‘Italians’ end up in LL even if they are playing a repeated game and plan to trade with each other in the future. In other words, they are not deterred from dealing with each other again and do not expect the other party to be deterred by getting L.
- They do not abandon the H-rhetoric and, more or less explicitly, keep promising high standards.
- A feeling of familiarity develops among L-doers: L-prone people recognize other L-prone people as familiar, as ‘friends’.
Here's an anecdote from a freelancer I was conversing with. Her story exemplifies many traits associated with L-worlds, —
“As a freelance graphic designer based in Mumbai, I often find myself in a familiar predicament. Clients offer me lucrative projects, promising substantial payments upon completion. The catch? The payments are routinely delayed, and the agreed-upon amounts mysteriously shrink due to unexpected deductions.
Picture this: I received a project with an initial agreement of 50,000 rupees for designing a company's branding materials. Eager to take on the work and in need of income, I accept the offer. However, my past experiences have taught me to anticipate payment delays of several months. When the payment finally arrives, it's often significantly less than the agreed-upon amount, as undisclosed taxes and miscellaneous fees eat into my earnings.
To make matters more complex, I've noticed a pattern. While the client initially insists on high-quality work, they rarely hold up their end of the deal regarding timely payments. This leaves me in a difficult position, torn between producing exceptional work and the financial strain of the delayed and reduced payments.
It's not uncommon for me to occasionally deliver work that falls short of my usual standards. The constant financial pressure and delayed payments lead to compromises in quality and timely project deliveries. It's a delicate balancing act between maintaining my professional integrity and meeting my immediate financial needs.
Interestingly, this issue isn't unique to my experiences alone; many freelancers in India face similar challenges. The preference for delayed payments and the acceptance of subpar work has become an unfortunate norm in the freelance industry. Both freelancers and clients seem to engage in this unspoken agreement where quality and timelines are frequently sacrificed for financial convenience.
It's a complex dynamic where freelancers like myself are navigating between the desire to deliver exceptional work and the necessity of securing timely payments.”
The mutual comfort of delayed payments and slightly compromised work quality has become an intrinsic part of the freelancing landscape in India.
In addition to freelancing, you will also hear the classic “This is how things work here” once you’re sufficiently settled into a new job or during a corporate stint, and typically in government offices.
So, why is this behaviour so commonplace?
Why do we slip into the L-world, where mediocrity is the preferred baseline? There are a few reasons:
A paucity of time and effort
Producing or acquiring high-quality items often requires more time, effort, and skill. People may choose low-quality options because they are more convenient and less demanding. This trade-off between quality and convenience leads them to prefer low-quality goods or services.
Norms and Expectations
In some social contexts, people may be more accepting of lower quality, and there may be less pressure to uphold high standards.
For instance, when I used to volunteer during college festivals, there would invariably be a group of people who would be at the festival for fun and to make friends, urging the rest of us not to do too much work.
Their behaviour was congruent to the lackadaisical culture that the festival had allowed to fester. The leadership knew that by the time the festival commenced, the volunteers would put in the work and get things working. The festival was also a temporary feature, which made the work incidental instead of intentional.
Likewise, in workplaces, culture plays a vital role in team efficiency because it sets expectations on the quality of work expected and the allowances made to arrive at the expected standard.
It is not uncommon to hear from people working on social media schedules that constantly producing work eventually leads to a race to the bottom with regard to what makes the cut.
Mutual satisfaction with mediocrity
You might think that the people who prefer low quality (L-doers) are similar to those in schools or factories who team up against those who work better and harder.
Essentially, they are against people who set high standards because it makes others look bad or forces them to work harder. This might be especially true when everyone gets the same reward, like a fixed monthly salary. In such cases, there may be no motivation to produce high-quality work.
In both cases, there's implicit consent and license to produce low-quality work, and anyone who tries to produce high-quality work is seen as breaking the agreement. Within the L-cartel, doing low-quality work is essentially the same as doing high-quality work.
So then, how do we operate differently in the face of such mediocrity?
One big factor that leads to this behaviour is misplaced incentives.
Misplaced incentives often encourage people to produce low-quality work because these incentives prioritize quantity or short-term gains over quality and long-term excellence. When individuals are rewarded solely based on output quantity or speed, they have little motivation to invest the extra time, effort, or attention needed to deliver high-quality results.
In such situations, the focus shifts from producing the best possible work to meeting the immediate incentive criteria, which can lead to shortcuts, reduced effort, and, ultimately, lower quality outcomes.
Everyone enters in a race to the bottom. Collectively, the cooperation is to preserve low work quality, and the individual that defects from the group by producing a higher quality of work is seen as a misfit.
Only a realignment of incentives can move the default quality of work upwards.
In an early-stage startup, you would perish if it operates at an L-world default. But as the scale of an organization grows, some prevalence of an L-world would be inevitable and perhaps useful because the likelihood of a large team collectively producing high-quality work might not always play out.
As teams grow, the high-quality work is limited to the executives simply because of the resources an executive has access to, time on their hands, and incentives for further promotion. At the lower rungs of the hierarchy, L-worlds are more commonplace.
An L-world is a collectivist mediocracy.
It has its own set of social norms, albeit unusual ones. From a game theory perspective, one is focused on cooperation and the norms that encourage it, viewing those who don't cooperate as individualistic troublemakers. These norms are seen as a way to counteract our natural tendencies to act selfishly.
In L-worlds, the same cooperation exists but to the detriment of a common good. Players are stuck in a sub-optimal Nash equilibrium. This is an idea the paper highlights as —
“Those whom we think of as free-riders too operate within a normative structure – a special “cement of society” that glues L-doers together.”
What quality of work do you optimize for? And what are the implicit cultural incentives that lead you to optimize for this quality?
Link to the research paper: