Daily LEADERSHIP Tip / Stack Ranking

Day 95

Dave Brewer of the AWESOME BC Networks recently said the money he spent on our services is the best investment he has made in two years

He also forwarded me an article on stack ranking:

Adobe's Stock up 68% Since it Dumped Stack Ranking, Will Microsoft's Follow?

I am very glad he sent it to me because you need to know two things:

1.  What is stack ranking?  Stack ranking is a version of Jack Welch's "vitality model" of growth for GE, when he ran the company.  It has been described as a "20-70-10" system. 

The "top 20" percent of the workforce is most productive, and 70% (the "vital 70") work adequately. The other 10% ("bottom 10") are non-producers and should be fired.

Welch has credited much of his strong performance as GE's CEO to his vitality model.  The company experienced a 28-fold increase in earnings (and a 5-fold increase in revenue) between 1981 and 2001.

2.  I have never recommended stack ranking.  Why?  The goal of our LEADERSHIP Essentials systems is to get everyone fully engaged, rather than create a cannibalistic company culture (i.e. Microsoft under Ballmer) with stack ranking.

Yes, we need to set clear, measurable goals and pursue them individually, and as a team.  But Welch's approach used more fear than encouragement, valued individualism over teamwork, and he forced the firing of 10% of employees every year just because they were ranked in the bottom 10%.

I believe statistics show that his approach at most companies leads to excessive politics, lack of teamwork, and manipulative company cultures.

Our approach is quite different.  Email me if you want to learn more.

And do not forget... IT IS FRIDAY!  A basic part of an Accountability Culture is following-up on your weekly 3 Strands to confirm you made progress on your most important 2013 goals this week.  How are you doing this week?

Do not forget to hold your people accountable too.

Let me know if you need help.

Be a Systematic Leader - because inconsistency hurts

Thank you.