Performances in sport suggest that humans get better over time. The improvements occur at a pace that is far faster than genetic adaptation. Additionally, the improvements aren’t evenly spread throughout the population. They are disproportionately displayed by those that have committed to the challenges of training for specific events. Take the Superbowl of Olympic track and field events, the 100 meters sprint. This is one of the marquis events of the Olympics and the headliner of most pure track and field events. Over the last hundred years, performance times have dropped considerably. In the 1920s, winners in men’s events were able to run 100 metres in about 10.6 seconds. One hundred years later, the times of victors have been reduced over 10% to sub 9.60 seconds. We’re largely the same creatures today from a human genome point of view as we were then. Those athletes that were winning in the 1920s through to the 1960s would barely remain competitive with US High School kids today.
In another example, Trevor Bauer, Major League Baseball pitcher and recent Cy Young award winner has led MLB in a new approach. Bauer suggests on The North Star podcast that the best pitchers of even twenty years ago would barely make major league rosters today. The best in that time would offer fastballs at 94 or 95 MPH. They would typically have one other decent pitch in their toolkit. Perhaps, a slider or a curve ball. Against what the number one starters are delivering today, these abilities are substantially less. Today’s starters are consistently hurling fastballs that are well above 95 MPH, pushing 100 MPH. They also would have at least two other lights out pitches that make them difficult to attack by opposing batters.
Sprinting and baseball are just two of many possible examples where the stars of yesterday would barely be noticeable or competitive in their activity’s current context. If our internal composition hasn’t changed, what explains the sustained gains? Sports are an arena where improvements are sought constantly as an inherent part of competition. The rules of games are the same for all participants. This restricts the opportunities for change across a clear number of variables. Moreover, competitors participate in the open. Even much of their training is impossible to hide. As Sam Walker observes in The Captain Class, “Unlike the business world, where innovative new products and technologies can be developed in secret, sport does not allow teams to hide their techniques. They can hone them in practice, but they must display them during matches in full view of their opponents, who can keep rewinding the tape until they find vulnerabilities.” That is, changes that work well for an individual or team are easily noticed by competitors. These changes are then adopted and the value of the difference is now absorbed by the competitive field raising the bar. The evolution of excellence is constantly ground out as a result of being able to watch what others are doing. A rising tide lifts all boats, but reduces or eliminates the head start of the leader. Additionally, the outcome of sport is clear and known. Everyone that plays the game is trying to achieve the same thing. This clarity of purpose deeply defines the limited number of areas to study. Focus on the vital few factors is forced by the shared objective of the game. Finally, at the professional levels, the incentives for getting things right and leading or winning a game are enormous. These factors produce a sets of highly motivated groups aspiring to get better.
Sport shows us, over and over, that performance improves as a result of the Evolution of Excellence cycle. Everything we can imagine is being watched and measured. Motivated individuals are looking around at other competitors and studying every aspect of performance they can. Once in a while a new technology arises which allows one more facet of a game or athlete’s performance to be monitored. These changes fuel new understanding. Individuals and organizations learn from what’s being looked at. From the learning, training programs and game strategies are adjusted. Capitalist economies are driven by the same competitive principles that propagate sport. Economic forces follow the Evolution of Excellence. Warren Buffett has suggested there are “three I’s in every economic cycle, the innovator, the imitator, and the idiot.” A cycle starts with an innovation, a new layer of evolution is kicked off. Then, others look and learn and copy to catch up. However, if we stay the course, by the time the laggards jump on, others have moved on innovating in a new direction while the late comes are left as losers or in Buffett’s framework, idiots. In either case, those that lag are left in the dust.
Business, like sport, is a competitive arena. Those in the game recognize that the point is to parse performance. On the quest to become the best, there can be no rest. Competitors internalize the mindset of continuous and never-ending improvement (CANI). Differentiating becomes the point. You can’t be a clone that stands alone. Sport captures this idea adopting phrases like the devil is in the details, hundies matter, aggregate marginal gains, 1% every day, and small wins. Most of the drive for improvement flows from seeing what makes others go. It’s driven by external comparisons. From looking and learning, new edges to explore are uncovered and leaps made. This type of improvement is modest but meaningful. It’s about squeezing another drop of performance out of a current practice.
Peter Thiel wrote about the importance of innovation in his book Zero to One. Thiel suggests there are two types of growth: horizontal and vertical. Horizontal growth is traditional and slower. It is linear and incremental. On a macro scale, globalization represents an example of horizontal growth. Horizontal growth results from participants playing the same game doing similar things. Growth, here, occurs from an iota of efficiency being found here and squeezing out an ounce of additional productivity there. Horizontal growth is about taking one and making it 1.01. It’s maximizing marginal gains. It’s about exploiting as much as we can from an existing system. Horizontal growth is steady and largely reliable. If horizontal growth is graphed where the x line represents time and the y axis represents growth, then its line would trend much closer to the x axis, hence the name horizontal growth. Horizontal growth is the world of the status quo and reflects what we know. This is the fruit that is earned from a focus on looking and learning from others in your own industry and backyard.
Thiel contrasts this type of growth with what he calls vertical growth. Vertical growth is dramatic, sharp, and steep. It is the result of technology. It’s the creation of something entirely new. In Thiel’s world, vertical growth is moving from zero to one. An entirely new world results. The printing press, automobiles, Cell phones, the internet, social media, and bitcoin are all examples where we moved from zero to one. An entirely new way of doing things was developed which led to a mushrooming of opportunities as a result. The arena of innovation results in growth that quickly spikes. Vertical growth can’t easily be predicted, nor can its impact. Where vertical growth is graphed where the x line represents time and the y axis represents growth, then its line would trend up alongside the y axis, hence the name vertical growth. It’s reflected in the steep, almost vertical, or hockey stick looking line. Vertical growth rises from nothing to something substantial in short order. Vertical growth is the world of the new and the domain of the few.
Regular readers will note close parallels between horizontal growth and exploit as well as vertical growth and explore which we outlined in a past article. A similar distinction is made with respect to progress in science. Existing schools of thought are considered paradigms and progress that occurs to move the needle marginally forward in an arena is considered incremental. This is contrasted with progress that is transformative where the old model is blown up and a new one created. Some of these scientific breakthroughs that were transformative were even considered as coming from a spiritual source. The logic of looking and learning at what is can be helpful, but limiting. It allows us to squeeze out and exploit knowledge from existing circumstances. However, true game-changing transformative progress transcends facts and emerges from almost a mystical place.
Whether in science, business, or sport, the strategies and tactics to pursue these two types of growth differ. The Evolution of Excellence applies to both types of growth. Those playing in either game seek to look and learn. Where and who they are looking and learning from may differ. Those seeking horizontal growth are looking and learning from peers. They aren’t seeking breakthroughs. They are seeking minor, modest modifications to be tried. When they find something they aren’t yet doing being done by others, they seek to implement the small improvement. This is the leap of those pursuing horizontal growth. They are trying to jump forward without leaving the ground. Horizontal growth that seeks to exploit is about accretive improvements. Should they be successful in moving forward with the implementation of their leap, their lead becomes very slight and won’t last for long. It’s the world of low risk, low reward.
Horizontal growth, or exploiters, are seeking incremental growth. This is where those in sport and established industries, like insurance, are mostly playing. Whereas, those playing the game of vertical growth may have no peers from which to look and learn. They are looking across industries and knowledge domains. They are seeking entirely new ways of doing things. They are exploring arenas where there are no competitors. The field is small or doesn’t yet exist. It’s the world of research and tinkerers. It’s the world of experiments. It’s boom or bust. It’s a giant leap towards a new world. They are betting it all on one thing. Their approach may result in something new that becomes marketable or it may nudge them solidly into oblivion. It’s high risk, high reward. Vertical growth following from exploring is about disruptive innovation.
Sport shows that the best in any game today will be common or average within the game in twenty years. This isn’t because the same players deteriorate with age, but that each game is in a relentless race to capture improvements. Competition challenges participants to get better faster. Survival in a competitive arena demands that a continuous search for positive change occurs. Peter Bregman in his book, 18: Minutes, notes that “In any highly competitive field—and these days every field is highly competitive—being different is the only way to win. Nobody wants to sell a commodity, and nobody wants to be a commodity. Yet even though we all know that, most of us spend a tremendous amount of effort trying not to be different. We model ourselves and our businesses after other successful people and businesses, spending considerable money and energy discovering and replicating best practices, looking for that one recipe for success. Here’s the thing: If you look like other people, and if your business looks like other businesses, then all you’ve done is increase your pool of competition.” As well intended as our efforts to look and learn may be, it may be what is keeping us, at best, in the middle of the pack. As John Strelecky writes in The Big Five for Life, “Most of the time people just do what they’ve seen everyone else do. They lead like every one else, they run their companies like everyone else, and they put their bathroom signs in the same spot as everyone else. Not because it’s the most effective way to do things, not because it’s the most profitable way to do things, but because it’s easier to follow everyone else than to think about why they’re doing what they’re doing. And it’s definitely easier to do that than to change.” Copying and conforming is comfortable. It feels good to fit in. However, you’ll never be able to get ahead of someone when you’re stuck in their shadow or walking in their footsteps. To get ahead you must dare to be different. The first step is to come to terms with the type of growth towards which you’re seeking to go. Are you trying to explore or exploit? Once we know this, we can then develop a strategy for the desired direction. In a future article, we’ll offer some suggestions for how to adopt an attitude of constant adaptation and a search for improvement into your organization.
