The risk of overlooking unconventional potential
Risk Principle(s): Talent & Innovation Risk; Misjudged Potential
Key Lessons: Initial awkwardness can hide future brilliance. Avoid dismissing people or ideas that don’t fit the norm – nurture diverse perspectives.
In the complex machinery of modern governance, the pressure to optimise often leads to a dangerous “blindness of conventionality.” We create rigid frameworks to identify talent and value, but in doing so, we risk building a “farmyard” that ostracises the very elements capable of transforming our future.
At Imergo, we believe that risk literacy isn’t just about spotting threats – it’s about recognising misunderstood potential. Hans Christian Andersen’s The Ugly Duckling serves as a poignant allegory for the high cost of narrow benchmarking and the risk of driving away your future “swans.”
The story of the bird ostracised for its awkward appearance is a universal lesson in misclassification. Because the cygnet didn’t conform to the immediate expectations of the ducks, it faced rejection and self-doubt. It wasn’t “broken”; it was simply in the wrong category. Its survival and eventual discovery of its true nature as a swan highlight a critical truth: Strategic value is often hidden behind initial awkwardness and non-conformity.
The Deep Dive: The psychology of the “barnyard”
Why do organisations – often filled with brilliant people – act like the dismissive ducks in the pond? The answer lies in two powerful cognitive traps:
- Confirmation bias: Leaders often look for “culture fit,” which is frequently a coded term for “people who think and act exactly like us.” This creates a feedback loop where only “duck-like” ideas are validated.
- The prototypicality risk: We judge potential based on a prototype of past success. If your previous successful CEO was a “duck,” your system will naturally filter for more ducks, effectively blindfolding the organisation to the “swan” who possesses the disruptive skills needed for a changing market.
The Risk Lesson: The blindness of conventionality
For organisations, the “farmyard” represents the systemic risk of overlooking hidden talent or nascent innovation due to superficial appearances or narrow definitions of value.
- The risk of undervalued talent (The “Pedigree” trap): Dismissing individuals who don’t fit a standard mould is a massive strategic failure. This often manifests as “pedigree bias” – valuing certain degrees or career paths over raw capability and adaptability. When we ignore those who lack “immediate polish,” we miss out on the resilience and divergent thinking required to navigate existential shifts.
- Missed innovation and the “Ugly” prototype: Many disruptive breakthroughs began as misunderstood or awkward concepts. In their early stages, transformative technologies – like the early internet or renewable energy – often underperform compared to established legacy systems. If an idea is rejected because it doesn’t conform to current “optimal” trends, the organisation risks path dependency – clinging to a sinking pond while the swans take flight elsewhere.
- The danger of narrow benchmarking: Defining “optimal performance” too rigidly based on existing models creates a systemic blind spot. Most KPIs are “duck metrics” – they measure efficiency in a known environment. They fail to measure transformational potential. Without the flexibility to nurture innate but unrefined skills, organisations stifle the very talent that could lead an industry pivot.
- The loss of diversity and cultural fragility: A culture that fails to appreciate differences risks driving away its most unique contributors. Much like the duckling being driven from the farmyard, your most innovative thinkers will leave if they are constantly “pecked at” for being different. This loss of diversity leaves the organisation fragile, populated only by those who share the same blind spots.
The boardroom perspective: Governance for swans
Risk oversight at the board level must evolve to address the risk of homogeneity. To ensure your organisation isn’t just a well-managed barnyard, boards should ask:
- “What are our ‘ugly duckling’ projects – the ones that don’t fit our current model but could define our future?”
- “Are our recruitment and promotion filters designed to find ‘fit’ (conformity) or ‘add’ (diversity of thought)?”
- “Do we have a ‘safe harbour’ for unconventional ideas that allows them to mature before they are judged by legacy KPIs?”
Strategic action: From barnyard to ecosystem
To mitigate the risk of conventionality, leaders must transition from a restrictive farmyard to a nurturing ecosystem:
- Implement “Blind” innovation reviews: Evaluate ideas based on their merit and systemic impact, stripped of the “polish” of the presenter.
- Invest in the “Ugly” stage: Acknowledge that the early stages of transformation are messy. View the nurturing of awkward, early-stage concepts as a strategic investment in future brilliance.
- Broaden the success portfolio: Create flexible performance models that value divergent thinking and “failed” experiments that provide high learning value.
- Protect the outliers: Explicitly task a leader or a “skunkworks” team with protecting and advocating for the non-conformists within the ranks.
By internalising the lessons of the Ugly Duckling, organisations can transform their culture. The true risk to your organisation isn’t the outlier or the “misfit” – it’s the narrow-mindedness that fails to see their potential. When you learn to look past the grey feathers of the present, you secure the magnificent flight of your future.