Tag Archives: medicroty

What Hath Jack Welch Wrought? Maybe Differentiation Is Not All That Good After All – (Should there never be any jobs for the “mediocre?” – Then what?)

“Ah, but we can’t,” goes the prayer. “We can’t because we have responsibility, a responsibility to our employees, to our community. What will happen to them?” I got two words for that: Who cares?
{The fictional Lawrence Garfield (Larry the Liquidator), Other People’s Money – see the clip here}

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A few nights ago, I was talking to the chief information/technology officer for a major company, with locations all over the country (and beyond).  He told me that his job was this:  to reduce the workforce.  His goal is to cut every 100 workers down to 20.  With technological strategies and innovation, he can do that – he is doing that.  So, I asked him, but what about the 80 that are let go.  He said, “I don’t care.  That’s not my worry.  My job is to get the workforce down.”

I said, “You should care.  Because, ultimately, if every company does what you do, then your customer base will decrease – there will be no one to purchase your products.”  Though he seemed to get that in some macro sense (barely), his focus is clear.  He is doing what he was hired to do, overall economy be damned.

This problem is real, and big.  I fully understand the concept that we have to make every worker as productive as possible, and every company needs to maximize profits in every way.

Except…  the overall economy may have been healthier when companies “overpaid” for workers, letting “mediocre workers’ have a place to work, producing more income in the overall economy.  A worker who is not as productive as others still is a customer in the rest of the economy.  And if every company gets rid of those “bottom 10%,” then soon it becomes the “bottom 20%,” and the “bottom 30%,” and before you know it, your overall customer base for a functioning, growing economy shrivels up down to dangerous levels.

Welcome to 2011!

I don’t know who invented this “shrink the workforce” approach.  But Jack Welch is known for the way he championed “differentiation.”  It is an absolutely rational, good, smart approach.  Get rid of the bottom 10%, as you build the skill levels and capabilities of the rest of your folks.  Yes, get rid of the dead weight.  Get more work out of fewer workers; workers are so expensive, after all.  Your company will be better for it, your workers more productive.

This is from Winning by Welch:

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.
Differentiation – Cruel and Darwinian? Try fair and effective.

And this is from a column by Jack Welch (read the column here):

Bottom 10%
As for the bottom 10 percent in differentiation, there is no sugar coating this—they have to go. That’s more easily said than done; It’s awful to fire people—I even hate that word. But if you have a candid organization with clear performance expectations and a performance evaluation process—a big if, obviously, but that should be everyone’s goal—then people in the bottom 10 percent generally know who they are. When you tell them, they usually leave before you ask them to.
No one wants to be in an organization where they aren’t wanted. One of the best things about differentiation is that people in the bottom 10 percent of organizations very often go on to successful careers at companies and in pursuits where they truly belong and where they can excel.

I learned it on the playground
That’s how differentiation works in a nutshell. People sometimes ask where I came up with the idea. My answer is, I didn’t invent differentiation! I learned it on the playground when I was a kid.
When we were making a baseball team, the best players always got picked first, the fair players were put in the easy positions, usually second base or right field, and the least athletic ones had to watch from the sidelines. Everyone knew where he stood.

There may be times when I want Jack Welch to run my company.  But I’m not sure a world full of Jack Welches would be good for our economy.

Think back – over your whole life, you have had waiters/waitresses who were less than stellar, retail clerks who were a far cry from the best, and companies had so many workers who were not quite pulling their weight.  They were… mediocre.  And, yes, it drives me crazy when I receive “customer service” from a mediocre worker.  I have thought, “I would fire that person.”  But, what if all of those mediocre workers had nowhere to work?

Not every one was an “A” student (should we kick the “C” students, the bottom 10%, out of school?); not everyone was the starter on the football team; not everyone was the stand-out.

I think we ought to help everyone get “better” at their job.  But I think that an economy that only has jobs for the best has a shrinking pool of workers, and then, a shrinking pool of customers.  And then, you’ve got real trouble in river city.

If our economy does not give everyone a place to make some money, even those doing a less than stellar job, then we are destined to spiral down.  This may be the hidden price-tag of the search for excellence.

Maybe it’s time to, if not reward, at least make a place for, mediocrity.