I’ve been reading Jack Welch’s Winning.
Though Jack Welch is one mean and selfish man, Winning is a challenging and rewarding testament to Neutron Jack’s way of doing business. Welch’s philosophy of promoting the top 20% and firing the bottom 10% in a large company is unbelievably Darwinian, even cruel. Welch even runs his personal life the same way – at sixty years of age he writes about co-author and third Suzy "having taught me the meaning of love". Frankly, Welch has grown up children – it’s a bit late to be discovering love. Rediscovering would have been far more tactful.
But let’s leave the man behind and return to Welch’s Spartan philosophy of leaving the crippled employees on the mountaintop to perish in the night.
Jack Welch implementing his Spartan strategies for
HR management and work-life balance
When you read his book, however, you can see how this would work in a company which hires just extremely competitive types. Such people enjoy seeing others thrown down the well. It’s a bit of the mob waiting for the witch to be drowned. Welch is appealing to primal nature here, the law of the jungle. The hunter who cannot run fast enough is culled from the tribe and the tribe is stronger as the weakest members can neither survive nor reproduce.
Who sets the standard for elimination? In this case, Jack Welch. Where does one stop though? Perhaps the bottom 75% should be culled. And indeed so it happens in major law firms in Canada. Of the articling students only a small percentage – the most brilliant and particularly those willing to work sixteen hour days at full speed – are retained and made partners. The rest must vanish into government legal jobs or small private practice.
Welch argues that his particular standards are extremely indulgent, even merciful.
Sometimes grades sting, but kids somehow always live through it. And grades have a away 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 otherse 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!
His arguments in favour are quite persuasive. Welch’s position is if people are in the bottom ten percent, they are in the wrong job. There must be somewhere better on this earth for them to work and fulfill themselves. The underlying argument is that if they are innatel low performance there is no place for them in one of Welch’s companies. On that I have to agree with them. Even a single underperformer can take a whole company way down.
This year at Foliovision we let go of one chronic underperformer and the whole company’s performance leaped across the board. Just the presence of someone not fully engaged in his or her work is a huge distraction in a tightknit company.
Modern society has places for the take it easy, have another spliff crowd. Places at the post office are mostly filled right now, but there is still retail and front line security guard work. Unsurprisingly women do not line up to date or marry these men, thereby pushing the reproductive selection process to ambition and intellect. Or in the case of basketball players, drive and physical gifts.
If very attractive, the women have better reproductive chances but even then any successful man will get tired of their empty chatter and their absence of ambitions by the second week. There’s nothing wrong with a temporary stay in retail. Many people who move to the big city from a smaller town need this stint to get used to acclimatize themselves to the different atmosphere. It is only when chronic that it becomes an issue. Hard working artists who do a day job to pay for their materials and rent are also excluded.
So far, so good. The elite performers are pushed and rewarded, and everyone takes vacations according to their merits and all is well with the world.
What is very frightening and horribly true about what Welch writes is that we are not in competition with ourselves. We are not even in competition with the well-organized Japanese and their Taguchi methods of gradual improvement. We are in competition with sweatshops in China and or intellectual warehouses in India. People there are not concerned with work-life balance issues.
Work-life balance concerns are actually a luxury – "enjoyed" largely by people who are able to trade time for money, and vice versa. You can bet your bottom dollar that the Korean grocer who just opened his shop in New York doesn’t worry about whether he has time to get to the gym, just as you can be absolutely certain that 99 percent of the entrepreneurs in China’s huge emerging competitive workforce don’t wring their hands about working late every night.
So in Welch’s world, there is no other route to success than twelve to sixteen hour days six days a week. Anything else will just not be enough.
The sad part is that Welch is probably right and we will have to drive ourselves even harder in Foliovision if we are to achieve our objectives for ourselves and our clients.
If you would like to be happy, read fewer business books. On the other hand for healthy, wealthy and wise, Winning should be on your reading list.
Alec has been helping businesses succeed online since 2000. Alec is an SEM expert with a background in advertising, as a former Head of Television for Grey Moscow and Senior Television Producer for Bates, Saatchi and Saatchi Russia.
If I remember correctly, he does also help the people he ‘let’s go’ to find a new job? Haven’t read this book but remember a review of his previous book – Jack: Straight from the gut.
Yes, if he likes them enough he helps them sometimes.
I still think there is something wrong with presuming that 10% of your workforce is deficient. It’s the ultimate mean-spirited musical chairs.
I suppose with a company as big as GE you do treat it as a numbers game. But what might be true in one department (20% crappy workers) might not be true in another (98% stellar performers).
My feeling is that you have missed the point Welch was trying to get across.
GE happens to be very competitive and so the 20-70-10 regime fits that culture. What Welch drives again and again in both of his books is the importance of differentiation.
It’s recognizing two things in an organization: not everyone is equally effective and people want different rewards for their work.
Also, differentiation forces management to have a system of evaluating employees that is fair. From my many years in various organizations I have seen clearly that there is a wide divide between what management believes employee satisfaction to be and what employee say to each other when management isn’t there. The last time I’ve researched it, nearly 80% of people are not happy with their current jobs.
The 20-70-10 is something specific to GE. From your post I get the feeling that you have a bias without trying to understand the idea.
The major benefit of removing the bottom 10% is that it forces managers to defend their appraisals. Most companies out there have some form of appraisal, but probably 80% of them just put them in a drawer while the real decisions regarding advancement and salary are more impacted by who is friends with which manager.
I’ve had to fire people that were a poor fit, not because they were a chronic under-performer, but because it was obvious they weren’t happy. I took the time to help them get a new job and they have become top performers in their new roles.
As any skilled manager knows getting the right person in the right role is not easy, but is critical to success. 20-70-10 isn’t perfect, but has seemed to work exceptionally well for GE. It’s hard to generalize about a company that has a few hundred thousand employees, but I think given the company’s track record, they certainly do some thing right.
Thanks for stopping by.
I’d agree with a lot of your post, but every GE product I ever bought was a dog. Thinking of the 90’s before I learned my lesson.
GE were also terrible with warranty support.
So given the company’s track record with me, I’d have to say that 20-70-10 is a horrible way to run a business.
That said, we have a strict not-a-fit, goodbye policy at Foliovision now. I’d hate to put numbers on it, but there’s no way a small company should be keeping people around who don’t advance the cause in terms of spirit. Just turning up to work and doing your job is not nearly enough.
The key to Welch and GE is the highly competitive nature. These are the ones who want to win. He never says what he wants to win. Just to win. His goal was not to make the world safe for democracy or save the environment or improve job satisfaction for employees. They may not be evil but there is also nothing expressly humanitarian about their aims. Make money and lots of it. GE is not company aimed at changing society but at making their investors and partners rich.
For some people getting the job getting hired is as far as it goes. And in time they will need to go. If you are unhappy and are unable to help the company make money then they need to find you a way out even if you do not have the stones to find an exit yourself.
One anecdote he shares is about the stewardess called him mister and the guy next to him doctor. He said he liked the sound of doctor better and so continued in school earning a doctoral degree. Before he became a researcher or whatever He also blew the roof off of a building in his early years.
We call these outsized personalities supremely confident and self assured but they are desperately chasing what? A win? What makes it so important for them to win? And when they win it’s what’s next? They are rogue or lone rangers but only in a win at all costs way. They are on some level desperate for the approval from “winning.” Ambition without reason is pretty empty. At first it’s about those above you recognizing you deserve to be invited up the ladder. In time it becomes your turn to invite others to join the mucky mucks at the club.
Not everyone deserves a ribbon for their efforts like athletes at the Special Olympics. Jack talks about telling people the truth. Besides most of them already know they are falling behind. As uncomfortable for management and painful for employee they deserve to be told the truth. Hopefully they will find their niche where they can contribute and be rewarded for accomplishment. It’s no fun to crush someone’s dream unless you are just cruel bastard. But that’s why they get the big bucks.
Someone who does nothing shall not be allowed to eat. If anyone is doing at most of her/his effort, he/she should be allowed to eat the amount he/she contributes. Therefore, let us not fire underperformers; rather we must let them have the extent of their contribution.Or else,we lose our purpose for wich we survive. We are morally obliged to do a work that feed the underperformers and help them to be strong.We are strong not because of our effort but beause of our source for which no one is blamed or appreciated. According Jack,the world gets its present shape by high performers who represent 20 percent of the workforces. Nevertheless it is nature that present shape of the business world is shaped not only by the opinion of Jack but also the opinion of others-let us make other strong by working not only for ourselves but also for under performers. In this way we can shape the business world for better future.
Jack must have been very happy to see GE doing so terrible in markets, Not much of electric Left in GE. Got kicked out of Dow Jones, he must have died a terrible death, It is the result of cries of those 100s of thousands of families he ruined.