There have been literally thousands of questions. But most of them come down to this: What does it take to win? And that is what this book is about – winning.
Jack Welch, Winning
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I think that if we ask only one question: “how can my company win?” – then we are too myopic, too selfish.
I think we need a generation of business leaders who can start asking “how can my company flourish – but still help our overall society flourish?”
Companies know this. That is why they have “charitable giving” initiatives, and why they “give back to the community.”
But, maybe, some of their very policies end up squeezing the very life out of the community they claim to care about and seek to serve.
And, in the process, they can end up crushing the spirit of their very own people.
This is a blog post that may have no solution. But, I think it touches on a problem or two that we need to pay some seroius attention to.
It was prompted by this article from Slate.com about Microsoft: The Poisonous Employee-Ranking System That Helps Explain Microsoft’s Decline by Will Oremus. Mr. Oremus quotes from a Vanity Fair article by Kurt Eichenwald. Here’s the key excerpt:
At the center of the cultural problems was a management system called “stack ranking.” Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. The system—also referred to as “the performance model,” “the bell curve,” or just “the employee review”—has, with certain variations over the years, worked like this: every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor. …
For that reason, executives said, a lot of Microsoft superstars did everything they could to avoid working alongside other top-notch developers, out of fear that they would be hurt in the rankings. And the reviews had real-world consequences: those at the top received bonuses and promotions; those at the bottom usually received no cash or were shown the door. …
“The behavior this engenders, people do everything they can to stay out of the bottom bucket,” one Microsoft engineer said. “People responsible for features will openly sabotage other people’s efforts. One of the most valuable things I learned was to give the appearance of being courteous while withholding just enough information from colleagues to ensure they didn’t get ahead of me on the rankings.” Worse, because the reviews came every six months, employees and their supervisors—who were also ranked—focused on their short-term performance, rather than on longer efforts to innovate. …
The “father “ of this approach is probably Jack Welch, who called this “stack ranking” approach “differentiation.” Here’s what Mr. Welch wrote in his book Winning:
Differentiation is about managers looking at the middle 70, identifying people with potential to move up, and cultivating them. Differentiation favors people who are energetic and extroverted and undervalues people who are shy and introverted, even if they are talented… The world generally favors people who are energetic and extroverted. In business, energetic and extroverted people generally do better, but results speak for themselves, loud and clear.
And here is one more key excerpt from Mr. Oremus:
Microsoft wasn’t the first company to adopt this sort of ranking system. It was actually popularized by Jack Welch at GE, where it was known as “rank and yank.” Welch defended the practice to the Wall Street Journal in a January 2012 article, saying, “This is not some mean system—this is the kindest form of management. [Low performers] are given a chance to improve, and if they don’t in a year or so, you move them out. “
As the Journal and others have noted, what seemed to work for Welch—for a time, anyway—has produced some ugly results elsewhere. Even GE phased the system out following Welch’s departure.
Let me reflect a little. It seems that there are a lot of ideas, through the years, that look like they are good for companies and organizations, and good for society overall. But, over time, we see the consequences of decisions made, and it is not always all that wonderful. You know… “unintended consequences.”
Here’s one problem I have with “differentiation,” or, “stack ranking.” I teach Speech at the Community College level (as as adjunct professor), and yes, it is easy to see that there are some folks with “better talent” than others. And, it is a temptation to put my energies into those students. They give better speeches after all. But I am expected to teach all of my students. Every-one-of-them!
Though I disagree with parts of the policy approach, I have always liked the phrase: “No child left behind.” The idea is that every human being has worth, every human being has dignity, and every human being has something to contribute to our community and society.
If we are always asking “how can we cut” the “bad folks,” then we don’t think often enough about “how can we lift the ‘bad folks’ out of the ‘bad’ level?” And a society that is increasingly surrounded by those who have been cast aside — yet again — is a society that in the big picture is headed downhill.
Maybe the unintended consequences of “differentiation” and “stack ranking” is the growing sense that there are “better” people and “far-less-than” people. I mean, what does a person say when he/she goes home after being cut in the latest “differentiation, did-not-make-the-stack-cut” round at work? Such a person feels, and says in a number of ways, “I am worthless.” And maybe our companies and organizations need to understand that if they are in the business of “you are worthless” differentiation, it will have ripple effects that hurt all of society.
Now, I know… companies exist to make a profit, and keeping too much lesser talent on the payroll can be really harmful to the pursuit of profit.
But… if all companies adopt this stack and differentiate approach, before you know it, you have a class of “discarded” people who are pretty troubled.
Maybe we need a new initiative – no employee left behind.
Just some thoughts…
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