20-70-10 (not to be confused with 90-60-90)

There is such a consultant in America (formerly CEO of General Electric ) on management issues, his name is Jack Welch . And they invented, on the basis of many years of experience with many companies, a system of fundamental management principles . One of these principles is “differentiation” and I would like to talk about it here.

In short, the essence of differentiation is that all employees should be ranked in proportions of 20, 70 and 10%, declare and explain their status and after that:

• The best "twenty" in every way to encourage and promote, reward, support, advertise.
• The backbone of the "seventies" to develop, stimulate the carrots that they can join the twenty. They must be actively developed, taught, trained, but moderately encouraged and rewarded.
• From the "dozens of outsiders", it is necessary to get rid of.

')
Moreover, this process must be conducted constantly, thinning the ranks every year.

Jack argues that this approach is much more honest and fair (as much as personnel management can be “fair” or “fair”) with regard to “lagging behind” - at least it gives them a chance to find a job where they are really good, where they are can realize themselves. The alternative is to live to gray hair and in 50 years to be in the labor market, where your skills and knowledge are unnecessary for anyone.

Opinions regarding this principle, as one should expect, are very polar: this approach is more likely to either like it or not. It is difficult to be somewhere in the middle. Usually, the argument against building up all under the distribution of 20-70-10 is that after 2-3 years it does not lead to any significant semi-adolescent changes. Saying, you are cutting out the "seventies" deeper and deeper - after all, after a year or two, no one from the 10 percent ballast should be.

But this statement, obviously, comes from the fact that no new blood enters the organization. In particular, Oren Harari says :

... forcing you to go after the fifth year — or not, according to the research, certainly not after the tenth. It wouldn’t be necessary to track it. Your quest for top performance.

I fully agree with his remark about flexibility, but it seems to me that his argument was forged in the conditions of the impossibility of replacing the 10% that he dismissed, or who left themselves. I myself was in such a situation and I well understand his point of view. Very often, especially when a company is under very strong pressure from shareholders and analysts, losing those who are lagging behind is considered only as a way to reduce costs, and not as a way to increase productivity, team efficiency. And, of course, in such a situation, a forced ranking will lead to a decrease in morale, to the fact that the “foremost people” will leave.

That is why the “Welch Way” cannot be used in parts, only the whole one: Striving for victory , Clear idea of ​​goals and values , Honesty and openness , Differentiation , Publicity of communication .

What do you think?