Tag Archives: excellence

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}


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.

The Experts Can’t Figure It Out – Now What Do We Do? (We Still Don’t Know What Caused the Financial Crisis of 2008)

What do we do when the experts simply can’t figure it out?

Here’s a simple question:  are there failing companies?  Yes.  Are there less-than-excellent organizations?  Yes.  Do you do everything you could do, should do, as well as you possibly could – as well as it needs to be done?  The answer, I’m pretty sure, is no.

So, “less-than-excellent” is all around us.  As we reflect on failures and deficiencies, we ask the next question:  why are we not better?  Why are our companies, our organizations, our own lives, not better?

Atul Gawande hinted at it when he wrote:

We have just two reasons that we may fail. 
The first is ignorance – we may err because science has given us only a partial understanding of the world and how it works.  There are skyscrapers we do not yet know how to build, snowstorms we cannot predict, heart attacks we still haven’t learned how to stop. The second type of failure the philosophers call ineptitude – because in these instances the knowledge exists, yet we fail to apply it correctly. 
(Atul Gawande, The Checklist Manifesto:  How to Get Things Right).

Or, to put it in simple terms:  we don’t know; or, when/if we do know, we don’t do.  Back, yet again, to the “knowing-doing gap.”

Now, on the “we don’t know” part of this equation….  Sometimes, we have not yet learned.  On the news last night, there was a report on an amazing breakthrough drug for lung cancer.  It looks like it might actually work, and they profiled a woman (with two young children still at home) who was on her death bed, and she is practically back from the dead.  We now know something we did not know, and she is alive, maybe for quite a while longer.  Wonderful.

And there are, we suspect, so many more such wonderful discoveries around the corner.

But, as much as we have come to rely on the breakthrough discoveries and insights of “experts” – they simply don’t yet know everything.

Which brings me to the paragraph of the day.  This came in on my AtlanticWire Five Best Columns e-mail this morning.  The article referenced is:  What Caused the Financial Crisis? Don’t Ask An Economist.  I end this post with the paragraph summary of the article from the AtlanticWire.  And I remind you that there are some questions for which we simply do not know the answers — yet.  And the more complex the question, the bigger the problem this presents.  It really is quite a paragraph on lack of consensus, the limits of experts and their expertise, and a little on the drawbacks of this contentious age we live in.

Here’s the paragraph (AtlanticWire here; the article linked to from the FiscalTimes here):

Mark Thoma on the disabling divide in macroeconomics  “What caused the financial crisis that is still reverberating through the global economy?” asks Mark Thoma in The Fiscal Times. “Last week’s 4th Nobel Laureate Meeting in Lindau, Germany–a meeting that brings Nobel laureates in economics together with several hundred young economists from all over the world–illustrates how little agreement there is on the answer to this important question.” Economists offered all sorts of conflicting answers like “the banks, the Fed, too much regulation, too little regulation, Fannie and Freddie, moral hazard from too-big-to-fail banks, bad and intentionally misleading accounting, irrational exuberance, faulty models, and the ratings agencies.” This lack of consensus among the world’s most renowned economists is troubling, Thoma writes, because we cannot find a solution to a problem we do not agree on. Perhaps we could try to fix all the potential problems cited. “But that unnecessarily constrains a whole range of activities in the hope that we limit the particular behaviors at the root of the crisis. That’s an inefficient way to fix the problem. And in any case, how do you proceed when some of the causes cited by economists are at odds with each other?” The truth is, macroeconomists have not yet agreed on a single model for the economy. Because economic theories are applied to historical, not experimental, data, economists can come up with multiple theories that explain the past equally well. “This problem is not just of concern to macroeconomists; it has contributed to the dysfunction we are seeing in Washington as well. When Republicans need to find support for policies such as deregulation, they can enlist prominent economists–Nobel laureates perhaps–to back them up. Similarly, when Democrats need support for proposals to increase regulation, they can also count noted economists in their camp.” Thoma says he hoped that a cycle-interrupting cataclysm like the 2008 crisis would provide enough new macroeconomic data to support one theory over another–he thinks it supports demand side over supply side. In fact, economists have just used it to back up their previously held positions and “dig in their heels,” making our debates “larger and more contentious than ever.”

The Story of the Little Black Dress – Customer Service Par Excellence

I don’t remember which book I read this in.  It was quite a few years ago.  And, I suspect that I have a detail or two off, or missing.  But I know I’ve got the overall story right.  Here it is.

A woman called her regular salesperson (her personal shopper) at a Nordstrom location in Southern California.  She said that she needed the little black dress that was in the corner window inside the mall (she described it in detail), and she needed it for a party by the next day.  And she did not have time to come get it.  Could the salesperson overnight it to her?

The next day, she received the dress, the very one she had had described.  Inside the box was a note from the salesperson that went something like this:

“Here is your dress.  I knew exactly which dress it was from your description.  It was actually in the Saks window.  So, I went to buy it on my break.  I paid for it with my own credit card, so if you don’t mind, could you please send me a personal check directly?  I hope you have fun at your party.”

Needless to say, this cemented this person’s loyalty to that personal shopper, and it added to the legend of Nordstrom’s customer service reputation.

Here are the customer service lessons:

1) Know your customers. Do whatever it takes to please your customer.  The extra effort builds your relationships, your reputation, your future.

2) Know your competitors. This salesperson knew not only the offerings from her own store, but she also knew what her competitors had to offer.  That knowledge sent her to the right store to purchase this particular dress for her customer.

3) Be willing to think outside of the norm. This salesperson was willing to obtain the dress from a competitor to keep her customer happy.

4) Do exactly what is best for the customer – don’t try to do what is better for you. In this case, many salespeople would have said, “you’re thinking of a dress from another store – but we have a dress that is similar, that I think you would like just as much.”  No, the customer had her mind made up – she just did not remember which window she saw the dress in.  And this salesperson set out to please the customer, not please herself.

All jobs demand some combination of sales and customer service.  This story reminds us what excellence looks like.