Your company is a maximization machine—it wants to make the best use of its finite resources—so it is greatly interested in identifying precisely who to invest in, and how.

The problem with this stems from the way your company executes on these good intentions. Why, for example, does it assume that it will net a good return only from certain people? Surely, the cliché that “Our people are our greatest asset” applies to all of the people in the company. As we’ve seen, every human brain retains its ability to learn and grow throughout adulthood. For sure, each brain grows at a different speed and in a different way, but this implies only that each person learns differently, not that—categorically—some people do and some don’t. Therefore, the best course of action for any maximization machine worth its salt would be to figure out where and how each brain can grow the most, rather than zeroing in on only a select few brains and casting aside the others.

If you build an organization made up of high performers, you can eliminate most controls. The denser the talent, the greater the freedom you can offer.

We decided that rather than putting more rules and procedures in place, we would continue to do two other things:

1. We would find new ways to increase talent density. In order to attract and retain the best people, we would have to make sure that we offered the most attractive methods of compensation.

1. We would find new ways to increase candor. If we were going to remove controls, we would need to make sure that our employees had all the information they needed to make good decisions without management oversight. This would require increasing organizational transparency and eliminating company secrets. If we wanted employees to make good decisions for themselves, they would have to understand as much about what was going on in the business as those at the top.

But people are less creative when they don’t know whether or not they’ll get paid extra. Big salaries, not merit bonuses, are good for innovation.

Another factor at work here, though, is the status quo bias, a powerful and widespread psychological force in business. The concept was introduced by researchers William Samuelson and Richard Zeckhauser, who showed in studies with many kinds of decision-makers, including managers, that “when making an important choice, people are more likely to pick the option that maintains things as they are currently.” When you’re enjoying success, your status quo bias is reinforced, which might be just fine. But given that after five, six, or seven years, market conditions will surely have evolved, it usually won't be fine to stick with the status quo later. When responding to those changes would involve making a substantial alteration to or even reversal of a winning strategy or to operational engineering you have orchestrated, the status quo bias makes recognizing the need for change and making the case for it to your team and board a good deal more challenging.