Posts Tagged ‘Jack Welch’

Jack Welch on Leadership Communication and Performance

Thursday, December 5th, 2013

Reacting to the recent announcement that Microsoft would stop force-ranking employees, a practice often referred to as “rank and yank,” former GE CEO Jack Welch delivered a strong case for another approach. Calling the “rank and yank” approach to performance evaluations”a media-invented, politicized, sledgehammer of a pejorative,” he said that it “perpetuates a myth about a powerfully effective real practice called (more appropriately) differentiation.”

Much has been written about “rank and yank” approach used by companies in recent years. It can, and often does, result in the firing of excellent employees who happen to be on an exceptionally high-performing team. Under the system, the bottom-ranked employees have to go, even those who are strong contributors. If it seems self-defeating, that’s because it is!

Writing in The Wall Street Journal, Welch states a strong case for differentiation, which, he says, is “about building great teams and great companies through consistency, transparency and candor. It’s about aligning performance with the organization’s mission and values. It’s about making sure that all employees know where they stand. Differentiation is nuanced, humane, and occasionally complex, and it has been used successfully by companies for decades.”

Welch clearly articulates the need for leaders to clarify mission (where we’re going) and values (how we’re going to get there)–a goal achieved through storytelling, as emphasized in my Corporate Storytelling® workshops. Aligning performance with mission and values is crucial. To achieve that goal, Welch advocates for honest, supportive performance evaluations that let employees know where they stand, where they excel, and where they need to improve.

With this approach, everybody wins! And everybody wins when someone is let go. That’s because only those who aren’t performing well enough are let go–after they’re given help in identifying where their strengths would be a better fit and supporting their efforts to find another job.

Leadership communications based on consistency, transparency and candor are the keys to building and retaining high-performance teams and building strong, enduring companies. The most powerful tool for clear communication is storytelling.