Member-only story
This argument about to be laid out might confuse a couple of people semantically, so let me say this up front: obviously, credibility — and similar notions, such as your reputation — are tremendously important to capturing and retaining business. I would think we all know that. The argument here won’t be that credibility is a bad thing. No. Credibility is a good thing.
But the quest for credibility is another story.
Let’s start here
Interesting article from Northwestern on “when to pick the not-best candidate” for a job. Their reasoning mostly resides in this section:
In the model, a firm’s credibility — and thus its ability to motivate excellent performance — comes from rewarding past successes, regardless of whether a given employer or supplier is the best choice for new work moving forward.
“If I’m a worker and I know that Dan is not going to promote me even if I do a good job because of someone else who would be a better fit for that position, then I’m not going to do a good job,” says Powell.
This is about informal incentive structures, essentially. If someone keeps working hard and never gets promoted — or the company keeps hiring external candidates for roles the high-performer could do — then eventually the…
