Jack Welch’s ABC’s. Love ‘Em or Leave Em? Tell us what you think?

A few years ago, my company adopted the philosophy espoused by Jack Welch that team members should be identified as “A, B, or C” players annually.  Although we never fully engaged that concept due to leadership changes, I would like to know whether you use this tool and what you believe has resulted from Mr. Welch’s approach.

The theory is that on any team approximately 20% of the workers are “A players.”  These are the superstars; the linchpins of the organization that others rely upon to carry the organization forward.  These team members should be actively re-recruited annually by leadership, because losing them would be a major setback.

The next group is the “B players.”  Welch says that this group comprises about 70% of any organization.  These team members do the majority of the work in a company.  They are competent and valuable.  They, too, need to be re-recruited, but some of these will not want to be “B players.”  Those B’s need to understand what they could do to become, or be seen as “A players.”

Obviously, that leaves the “C players.”  Welch says these are the 10% of the workforce that take up 70% of your time and energy.  They need to be managed up to competency, or managed out of the organization.  They may even be quite competent, but their attitude could be a poisonous cancer undermining, authority and morale.  The rest of the workforce is dying for leaders to deal with these players!

The main thing that has bothered me about this approach is the belief that the 20-70-10 always applies.  I am not willing to accept that no matter how good we get at hiring, training, and retaining, we cannot do better than 20% “A players,” and 10% “C players.”  Having said that, thinking back over my career, I cannot honestly argue with those percentages.  Nevertheless, can we insist each leader identify 10% of the workforce as C-players as Welch demanded?

Regardless of the numbers, I think the value of this approach is clear communication to team members about where they stand with their leader and with the organization.  There is value to that, no matter whether you are an “A”, “B”, or “C”.  It also forces meek managers to have those difficult conversations with C’s, and also B’s that think their A’s.  It lets the A’s, and also the B’s that have no A level aspirations, know the organization will fight for them because they are valued and appreciated.

So why not move forward with this concept?

When this approach is implemented, the culture can turn into a pressure cooker.  One can feel as though he is constantly under the gun, being judged and held accountable.  If not implemented consistently across the organization, it can come across as arbitrary and capricious.  It can even result in gamesmanship and political maneuvering to avoid being identified as a C.

If leadership does not commit to this in earnest, and follow through for a number of years, it can do more harm than good.  As a “flavor of the month” program, this can be the biggest disaster, because it calls people out of the shadows and puts them in the spotlight; warts and all.  If there is no follow through on what has been exposed, leadership will lose the confidence of the team.

So, to those of you have used this philosophy, what do you say?  Is it valuable?  Have the results been good or bad?  Has it been sustainable?  Would you do it all over again if you could turn back time?  Let us know.

13 thoughts on “Jack Welch’s ABC’s. Love ‘Em or Leave Em? Tell us what you think?

  1. A sure way to stupid-performance. In the world of Servant Leadership there is unlimited potential inside of everyone. Jack Welch’s “vitality curve” is a way to create cultures of “every man for himself” Where will that lead? In the words of the famous Antarctic explorer Ernest Shackleton, “Every man for himself is a recipe for disaster.”

  2. The idea of stack-ranking people on teams and tying either compensation, or bonuses, or even employment security to it is absolutely short-sighted and retarded. People on these teams getinincreasingly self-centered and less cooperative, even to the point of sabotaging the best works of others just to keep their jobs. People are human being and should be treated as such. Treating people like things ignores what this whole thing is all about. Rather than stack-rank people and make people live in fear, leaders would serve their own goals better by helping each team member get better at what’s needed. They should help them learn, grow, and develop other leaders.

  3. Jack Welch’s 20-70-10 leadership principle has some merit but as Tom Shulte points out, it is inhumane. Perhaps a soft approach to its application that involves a solid period of professional coaching offered to the 10% might awaken at least half of them. If the remaining 5% are not coachable then it may be time for them to go. I have heard of few companies that offer some form of “recovery” coaching to substandard employees since leaders don’t see the wisdom of the investment. We have the professional coaches and the tools but where is the will?

  4. It can be extremely valuable, but you are correct that it must be driven by the senior leadership and applied methodically and consistantly. I am certain and have observed that an organization can reduce the percentage of C players and increase the percentage of A players. Otherwise the exercise would have no goal. Great organizations have more As. They flourish and are attracted to environments with less Cs. Just imagine a world where everyone wants to do their very best, all the time!

  5. My understanding of Jack Welch’s approach is that you don’t sit there and tell someone, “you are a C team member!”. The idea is for managers to identify those who are highly productive and effective, require minimal supervision, and are critical to the success of a project and spend time “recruiting” them on a regular basis. Let them know their value and rewarding them appropriately. You identify the B group so as to help mentor and educate them to either become A’s or become as productive as they can as B’s. You identify the C’s so as determine how and whether they can become more productive and either train them or prune them. Let’s face it, some people will have the wrong attitude either towards work or other people and therefore, at least in the current scenario, will never become as productive as what you need and consume the majority of resources maintaining them where they are. Their attitude becomes a poison in the workplace and everyone’s productivity suffers as a result. They need to change or need to go.

    I don’t think Welch ever intended you to apply hard percentages to his formula. The basic gist is that you are spending likely 70 to 80 of your resources on roughly 10% of the workforce in most cases just won’t produce a return. Meanwhile, the productive ones get ignored. Overall, I think the process works; IF as was pointed our earlier, you don’t make it the flavor of the month and instead commit to the process.

  6. I think it was a way to justify the firing of 135,000 workers. It doesn’t take managerial genius to layoff people. The trick is to develop a hypothesis that people will buy into for his actions.

  7. I have been in an organization that practiced this for several years and I have adopted many of its principals ever since (10+ years). While using it at an organizational level, I’ve seen the good, great, bad, and true ugly ramifications of it used thoughtfully and poorly For the record, I’ve always been a servant leader before I even knew it had a name.

    If used with reason and purpose and treating each person with value, it can be used to help the top performers truly excel. It can also be used see the majority for the value they bring. The ‘rack and stack’ method has a lot of benefits as one tool to help people and teams excel in performance – if done with a base of treating everyone with value.

  8. Seems to me the idea misses the whole point. It’s not about percentages. This forced ranking drives politics, not performance. The A players soon become those who never did a day’s real work, but are consummate gamesmen.
    So, two real questions to improve your organization:
    1) who’s getting the work of the organization done (not who has the best PR) (A players are the people who can tell the difference!!!)
    2) who is toxic? No, it is NOT inhumane to escort toxic players to the door. I’d argue that what is inhumane is to continue to force the other 90+% of your organization to live with the stress and disruption from these bad actors (often misidentified as A players).

    Effective organizations are collaborative, which will never happen in a toxic atmosphere of forced rankings.

    • Thanks for sharing your view point, Barbara. As you probably noticed, you are in the current majority on the blog site commenters. I really appreciate the viewpoint that A players are the ones who can tell who is getting things done, versus positioning themselves. Very insightful!

  9. Interesting that those against this policy want to call it “inhuman”. Wrong.

    Truth is that high performers LIKE to have the clear expectations. Yes, expectations. That is how an organization helps workers the most, is to be clear about expectations. High performers appreciate their efforts being noticed and rewarded. Those who are not high performers do not, and scream that it is unfair. What is fair is that 100% of the employees can get a different job if they wish, Especially those that produce.

    All Jack and those who make things clear are doing is being honest, and setting the stage for an honest discussion. The internal competition will be there regardless. Yes it will. This way it is directed and above board. Does honesty hurt sometime? Of course. Any company that is overly worried about making sub-par employees feel better about their performance is going to lose its best. And it will also lose customers. Is anyone reading this really going to accept a sub-par product or service just because it might hurt their feelings? Ever notice how full the return lines are at stores?

    Setting expectations is fair, and good and to be encouraged.

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