Imagine you’re on a highway with two lanes in each direction. Two cars are traveling side-by-side at exactly the speed limit. No one can pass, and so the cars immediately behind the lead pair go a little slower than the speed limit in order to maintain a safe distance. This process cascades until traffic slows down to a crawl miles behind the pair of cars responsible for the traffic jam.
Something similar can happen in organizations. Suppose the person at the top of a company is afraid to hire anyone smarter than himself. He wants to hire people who are talented, but not quite as talented as he is. If each of his subordinates follows his lead, the result can be a lack of talent at the bottom of the org chart.