If You Needed Another Reason Not to Learn From the 76ers

So here’s a conundrum that a Peter Drucker enthusiast might face. You have a mid-sized company of mediocre—or seemingly mediocre—performers. Are you better off slowly improving the performance of the people you have, or do you just try to get rid of most of them and look for fresh talent?

For those running NBA basketball teams, seeking salvation in fresh talent seems to be the preferred approach.

But, as Derek Thompson explains in The Atlantic, one of the leading ways to secure this fresh talent is to notch a terrible record, piling up far more losses than wins. This helps to ensure a higher draft pick among those entering the league.

“This strategy is called tanking, and its logic—to the extent that there is any—comes from the mysterious allure of the NBA draft,” notes Thompson. “When the ripening crop of amateurs looks especially tantalizing (this year’s is projected to be historically good), multiple teams will suddenly compete to be so uncompetitive that, through sheer awfulness, they will be blessed to inherit the top pick.”

There’s just one catch: “Nearly 30 years of data tell a crystal-clear story: A truly awful team has never once metamorphosed into a championship squad through the draft,” Thompson writes. “The truth is boring and simple. In the short term, average teams are more likely to become good, because they’re already closer to being good.”

Drucker would have certainly appreciated Thompson’s analysis. For starters, it wouldn’t have surprised him that so many teams that land top draft picks wind up selecting players whose NBA careers turn out to—well, stink.

“There is no such thing as an infallible judge of people, at least not on this side of the Pearly Gates,” Drucker wrote.

Beyond that, Drucker believed that if an individual is truly incompetent, then it’s a waste of time to strive for mediocrity. But a mediocre team is more likely to have decent players who aren’t being used properly.

That’s why Drucker liked to cite the example of orchestras, many of which make real leaps forward by having the right music directors. “A great orchestra is not composed of great instrumentalists but of adequate ones who produce at their peak,” he wrote in Managing in the Next Society. “When a new conductor is hired to turn around an orchestra that has suffered years of drifting and neglect, he cannot, as a rule, fire any but a few of the sloppiest of most superannuated players. He also cannot as a rule hire many new orchestra members. He has to make productive what he has inherited.”

What do you think is the best personnel strategy for turning around a mediocre organization?