Winning - Jack Welch [15]
The only good thing I can say about a merit-free system like this is that eventually it destroys itself. It collapses from its own weight or has to change. The results just won’t be good enough to sustain the enterprise.
Luckily, cases of “differentiation abuse” can generally be prevented by a candid, clear-cut performance system, with defined expectations and goals and timelines, and a program of consistent appraisals. In fact, differentiation can be implemented only after such a system is in place, a process that we will discuss more specifically in the chapter on people management.
Differentiation is mean and bullying. It’s like the playground in the worst possible way—weak kids are made into fools, outcasts, and objects of ridicule.
I’ve heard this one a hundred times, and it really drives me crazy because one of the major advantages of differentiation is that it is good and fair—to everyone!
When differentiation is working, people know where they stand. You know if you have a strong shot at a big promotion or if you need to be looking for other opportunities, inside or outside the company. Maybe some information is hard to swallow at first, and yes, “bad” news often hurts, but soon enough, like all knowledge, it’s power—in fact, it’s liberating. When you know where you stand, you can control your own destiny, and what is more fair than that?
Interestingly, when people raise this criticism with me at speaking engagements, I often ask them a question back. I ask if they ever received grades in school. Naturally, everyone says yes. I then ask, “Did you think getting grades was mean?”
“Well, no,” they usually say. Sometimes grades sting, but kids somehow always live through it. And grades have a way of making everything pretty clear. Some people graduate and go on to be astronauts or research scientists or college professors, others become marketing managers or advertising executives, and still others become nurses, chefs, or even professional surfers. Grades, in fact, guide us, telling us something about ourselves that we need to know.
So why should we stop getting grades at age twenty-one? To prevent meanness? Please!*
Corollary: I’m just too nice to implement 20-70-10.
Usually, people with this complaint about differentiation assert that differentiation, as a managerial system, does not value people who add intangible things to a business, like a “feeling of family” or “humanity” or “a sense of history.” And we all know of organizations that continue to employ underperformers for a long time mainly because they are really nice individuals.
I fully understand not wanting to manage out somebody nice.
But the fact is protecting underperformers always backfires. First of all, by not carrying their weight, they make the pie smaller for everyone. That can cause resentment. It’s also not what you could call fair, and an unfair culture never helps a company win; it undermines trust and candor too much.
The worst thing, though, is how protecting people who don’t perform hurts the people themselves. For years, they are carried along with everyone looking the other way. At appraisals, they are vaguely told they are “great” or “doing just fine.” They are thanked for their contributions.
Then a downturn occurs, and layoffs are necessary. The “nice” underperformers are almost always the first to go, and always the most surprised, because no one has ever told them the truth about their results, or lack thereof. The awful thing is that this often happens when the underperformers are in their late forties or fifties; they’ve been carried along for most of their careers. Then suddenly, at an age when starting over can be very tough, they are out of a job with no preparation or planning and a kick in the stomach they may never get over. They feel betrayed, and they should.
As harsh as it may seem at first, differentiation prevents