Winning - Jack Welch [17]
Then an amazing thing happened. Very many cultural issues didn’t confront us. Once we made the case for differentiation and we linked it to a candid performance appraisal system, it worked as well in Japan as it did in Ohio. In fact, people who at first thought it could never work in their country came to support it strongly for its honesty, fairness, and clarity.
As I mentioned, very often when I get the comment “We can’t have differentiation in my country,” it comes from managers who admit they themselves support the approach. Their resistance grows out of the assumption that their people will object based on cultural values. My advice to them is to move slowly but go for it anyway. They will be surprised that they are not alone because differentiation, once in practice for a while, makes its own case in any language.
Differentiation is fine for the top 20 percent and the bottom 10 because they know where they are going. But it is enormously demotivating to the middle 70 percent, who end up living in an awful kind of limbo.
Again, an element of truth in this complaint. The middle 70 percent is the hardest category to manage in differentiation. The biggest problem comes with the individuals in the top tier of the 70 percent because they know they are not a whole lot different from the top-20 performers, and often a whole lot better than the bottom tier of their own “guard.” And yes, that can be enervating, and sometimes talented middle-70 people leave because of it.
The silver lining to this difficult situation is that the existence of a middle 70 forces companies to manage themselves better. It forces leaders to scrutinize people more closely than they would ordinarily and to provide more consistent, candid feedback. It pushes companies to build training centers that really make a difference. For instance, before differentiation, our Crotonville, New York, training center was often used in the 1970s as a warehouse where businesses could afford to send their underperformers. It was like a way station on the road to early retirement.*
The rigor of 20-70-10 helped us change that. We turned Crotonville into a place where the top 20 and the best of the middle 70 talked about ideas, debated our approach to business, and got to know and understand one another a lot better. And since senior management spent several hours with each class, it also gave us a rough idea as to just how rigorously differentiation was being practiced in the field.
Another piece of silver lining is that while being in the middle 70 percent can be demotivating to some people, it actually revs the engines of many others. For the people in the top 20, for instance, the very existence of a middle 70 gives them yet another reason to pull out all the stops every day. They have to keep getting better to keep their high standing—what a rush that can be! After all, most people want to improve and grow every day.
For a lot of people in the middle 70, getting better is energizing too. Getting into the top 20 gives them a tangible goal, and having that goal makes them work harder, think more creatively, share more ideas, and, overall, fight the good fight every day. It makes work more of a challenge and a lot more fun.
Differentiation favors people who are energetic and extroverted and undervalues people who are shy and introverted, even if they are talented.
I don’t know if it’s good or bad, but the world generally favors people who are energetic and extroverted. That’s also something you learn young, and it’s reinforced in school, at church, at camp, in clubs, and usually at home too. By the time you get to work, if you are still