Jack Welch: 'Rank-and-Yank'? That's Not How It's Done

Every now and again—like just this week, for instance, with the announcement that Microsoft will be changing its performance-appraisal system—some news event unleashes a fresh round of debate about the management practice dubbed "rank-and-yank." That's the term used to describe how companies supposedly identify their worst performers once a year and then, boom, fire them.

It makes me want to scream. And I know I'm not alone.

Because most experienced businesspeople know that "rank-and-yank" is a media-invented, politicized, sledgehammer of a pejorative that perpetuates a myth about a powerfully effective real practice called (more appropriately) differentiation.

Unlike "rank-and-yank"—I hate even using that term—differentiation isn't about corporate plots, secrecy or purges. It's 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. Maybe that's not as headline-worthy as you-know-what, but reality rarely is.

Speaking of reality, here's a quick description of how differentiation works, including a look at the most common criticisms of it.

Differentiation starts with communication—exhaustive communication—of a company's mission (where it's going) and its values (the behaviors that are going to get it there). I'm not talking about putting a plaque on the lobby wall with the usual generic gobbledygook. I'm talking about a company's leaders being so specific, granular, and vivid about mission and values that employees could recite them in their sleep.

Why? Because the "guts" of the differentiation management system are performance appraisals that candidly evaluate employees at least once (and preferably twice) a year on how their results are advancing the company's goals and how well they're demonstrating its values. Two points here:

First, candor is absolutely essential to make differentiation work. Second, differentiation's performance appraisals are not—I repeat, are not—just about "the numbers." Yes, the system does assess quantitative results—say, an employee's sales numbers or inventory turns. But it also looks just as carefully at behaviors, the qualitative factors. Does this person embrace the company value of sharing ideas? Does the employee relish building leaders? What about going the extra mile to delight customers?

Now, one of the most common criticisms of differentiation is that it destroys teamwork. Nonsense. If you want teamwork, you identify it as a value. Then you evaluate and reward people accordingly. You'll get teamwork, I guarantee it.

Another criticism of differentiation is that it requires managers to let every employee know where he or she stands—how they're doing today, both quantitatively and qualitatively, and what their future with the company looks like. Are they a star in terms of both results and values (say, in the top 20% of the team), about average (say, about 70%), or not up to expectations (the bottom 10%)? Note: The 20-70-10 distribution is not set in stone. Some companies use A, B, and C grades, and there are other approaches as well.

Without a doubt, some companies use differentiation but leave this "grading" part out. Indeed, over the past 12 years, I've spoken to more than 500,000 people around the world and I always ask audiences, "How many of you know where you stand in your organization?" Typically, no more than 10% raise their hands. That's criminal! As a manager, you owe candor to your people. They must not be guessing about what the organization thinks of them. My experience is that most employees appreciate this reality check, and today's "Millennials" practically demand it.

Yes, I realize that some believe the bell-curve aspect of differentiation is "cruel." That always strikes me as odd. We grade children in school, often as young as 9 or 10, and no one calls that cruel. But somehow adults can't take it? Explain that one to me.

The final component that makes differentiation work so effectively is feedback and coaching. Your stars know they are loved and rarely leave. Those in the middle 70% know that they are appreciated, and they receive clear guidance about how to improve their performance. And the bottom 10% is never surprised when the conversation sometimes turns, after a year of candid appraisals, to moving on. No, they are not summarily shown the door. When differentiation is done right, their manager helps them find their next job with compassion and respect.

Differentiation is not something to be feared, dumbed down or politicized, but instead needs to be understood and implemented. Cruel? No way. Harsh? Just the opposite. With its candor and transparency, differentiation provides dignity, develops future leaders, and creates winning companies.

Mr. Welch was the CEO of General Electric for 21 years and is the founder of the Jack Welch Management Institute at Strayer University.

Welcome to Ted Cruz’s Thunderdome

A PLACE ONCE CALLED WASHINGTON

AN ape sits where Abe sat.

The year is 2084, in the capital of the land formerly called North America.

The peeling columns of the Lincoln Memorial, and Abe’s majestic head, elegant hands and big feet are partially submerged in sludge. Animals that escaped from the National Zoo after zookeepers were furloughed seven decades ago migrated to the memorials, hunting for food left by tourists.

The white marble monuments are now covered in ash, Greek tragedy ruins overrun with weeds. Tea Party zombies, thrilled with the dark destruction they have wreaked on the planet, continue to maraud around the Hill, eager to chomp on humanity some more.

Dead cherry blossom trees litter the bleak landscape. Trash blows through L’Enfant’s once beautiful boulevards, now strewn with the detritus of democracy, scraps of the original Constitution, corroded White House ID cards, stacks of worthless bills tumbling out of the Treasury Department.

The BlackBerrys that were pried from the hands of White House employees in 2013 are now piled up on the Potomac as a flood barrier against the ever-rising tide from melting ice caps. Their owners, unable to check their messages, went insane long ago.

Because there was no endgame, the capital’s hunger games ended in a gray void. Because there was no clean bill, now there is only a filthy stench. Because there was no wisdom, now there is only rot. The instigators, it turned out, didn’t even know what they were arguing for. Macho thrusts and feints, competing to win while the country lost.

Thomas Jefferson’s utopia devolved into Ted Cruz’s dystopia.

Law and order broke down as police, who were not getting paid, eventually decided to stay home. The fanatics barricaded in the Capitol dug in, determined to tear down what their idols, the founding fathers, had built. Darkness soon devoured the rest of the country.

Unlike Suzanne Collins’s “The Hunger Games,” where the capital thrived as the nation withered, here, the capital withered first, as the federal city shriveled without federal funds. But, in other ways, it mirrors the fantasy dystopias depicted by Hollywood and Cormac McCarthy in his novel “The Road,” “bloodcults” consuming one another in “an ashen scabland,” a “cold illucid world.”

In 2084, there’s little sign of life in the godless and barren lost world. The insurance exchanges are open and the kinks are almost ironed out. But there is no one to sign up. Koch brother drones patrol the skies. A Mad Max motorcycle gang wielding hacksaws roars through the C.I.A., now a field of dead cornstalks, and the fetid hole that was once Michelle Obama’s organic vegetable garden. Will Smith and Brad Pitt are here, hunting aliens and monsters.

The Navy-Air Force game goes on, somehow, and there are annual CrossFit games on the Mall, led by flesh-eating Dark Seeker Paul Ryan, now 114 years old. CrossFit is still fighting the Department of Agriculture’s food pyramid, even though there’s no Department of Agriculture and no food.

A gaunt man and sickly boy, wrapped in blue tarps, trudge toward the blighted spot that was once the World War II monument, scene of the first shutdown skirmishes. They know they may not survive the winter.

“How did this happen, Papa?” the boy asks.

“Americans had been filled with existential dread since the 9/11 attacks, but they didn’t realize the real danger was coming from inside the government,” the man says. “It started very small with a petty fight over a six-week spending bill but quickly mushroomed out of control.”

“Whose fault was it, Papa?” the boy presses.

The man tries to explain: “The Grand Old Party, the proud haven of patriots who believed in a strong national security and fiscal responsibility, was infected with a mutant form of ideology. It was named the Sarahcuda Strain after the earliest carrier. Remember when you saw that old science fiction movie, ‘I Am Legend’? A scientist described the virus that burned through civilization as being like ‘a very fast car driven by a very bad man.’ That’s what happened: In the infected Tea Party politicians, brain function decreased and social de-evolution occurred. They began ignoring their basic survival instincts.

“It’s hard to believe now, but they were fixated on stopping an effort to get health care to those who couldn’t afford it. It eventually led them to destroy all the things they said they held most dear.”

The boy is confused. “They killed America because they didn’t care about keeping Americans alive?” he asks.

The man sits down. His voice grows faint. “Well, they didn’t seem to understand themselves or what they were doing,” he continues. “In the face of overwhelming evidence to the contrary, many of the feverish pols believed they were waging the right and moral fight even as G.O.P. party elders like Jeb Bush, John McCain, Karl Rove and James Baker warned them that they were dragging the country toward catastrophe. The Tea Party leaders liked to refer to themselves as the Children of Reagan. But as Baker told Peggy Noonan, Reagan always said, ‘I’d rather get 80 percent of what I want than go over the cliff with my flag flying.’ ”

The boy frowns. “But Papa, didn’t the healthy Republicans realize the infected ones had lower brain functions?”

“Well, son, they knew there was something creepy about the ringleader, Ted Cruz,” the man replies. “His face looked pinched, like a puzzle that had not been put together quite right. He was always launching into orations with a weird cadence and self-consciously throwing folksy phrases into his speeches, like ‘Let me tell ya,’ to make himself seem Texan, when he was really a Canadian.”

The boy looks alarmed. “A Canadian destroyed the world, Papa?”

“Once the government shut down, a plague came, because they had closed the Center for Disease Control,” the man says. “Storms, floods and wildfires raged after FEMA was closed down and the National Guard got decimated.

“Once we went into default, the globe got sucked into the economic vortex. With a lot of the Defense Department, F.B.I., and intelligence community on forced leave, the country became vulnerable to terrorist attacks. Without the C.I.A. to train the moderate Syrian rebels, Syria fell to Al Qaeda.

“After the final American president, Barack Obama, canceled his trip to Asia, that part of the world decided we were weak. China moved quickly to fill the vacuum. Obama grew so disgusted, he spent his final years in office isolated in the White House residence. When he stopped returning the calls of Hassan Rouhani and Bibi Netanyahu, it was only a matter of time before the Middle East went up in flames.

“What is left of the world is being run by Julian Assange from what is left of the Ecuadorean Embassy in London and by some right-wing nut in a cabin in Idaho.”

The boy begins to cry. “Papa, stop. You’re making me sad. Are all the good guys gone?”

Looking through the gray skies toward the ashen Lincoln Memorial, where an ape sits in Abe’s chair, the man replies sadly, “Yes, son.”

John McCain: He Beat Us in War but Never in Battle

I met Gen. Vo Nguyen Giap—who died on Friday—twice. The first time was in the Vietnamese military hospital where I was taken shortly after my capture in 1967. My father commanded all U.S. forces in the Pacific, which made me an object of curiosity in some quarters of the North Vietnamese government.

I remember several high-ranking visitors in addition to the guards and interrogators I saw daily. Giap, North Vietnam's minister of defense, was the only one I recognized. He stayed only a few moments, staring at me, then left without saying a word.

Our second meeting was in the early 1990s, during one of many trips I made to Hanoi to discuss the POW/MIA issue and the normalization of relations between our countries. I had asked then-Foreign Minister Nguyen Co Thach and his deputy, Le Mai, to arrange a brief interview with the legendary commander of the People's Army of North Vietnam.

The next day I was ushered into the grand reception room of the Beaux-Arts presidential palace the French had built for their colonial governors, where the general was waiting. Smiling, diminutive, aged but spry, and dressed in a gray suit and tie, he hardly looked like his wartime reputation as a ruthless fighter with a fierce temper.

Giap greeted me warmly beneath an enormous bust of Ho Chi Minh, who had led Vietnam in the wars against the French and the United States. Both of us clasped each other's shoulders as if we were reunited comrades rather than former enemies.

I had hoped our discussion would concentrate on his historical role. After I came home from Vietnam in 1973, I read everything I could get my hands on about both the French and American wars there, starting with Bernard Fall's "Hell in a Very Small Place," his classic study of the 1954 siege of Dien Bien Phu, where French colonial rule effectively ended and Giap's genius first became apparent to an astonished world.

I wanted to hear Giap describe that nearly two-month long battle, to explain how his forces had shocked the French by managing the impossible feat of bringing artillery across mountains and through the densest jungles. I wanted to talk to him about that other marvel of logistics, the Ho Chi Minh Trail.

I knew he was proud of his reputation as the "Red Napoleon," and I presumed he would welcome an opportunity to indulge my curiosity about his triumphs. I wanted us to behave as two retired military officers and former enemies recounting the historical events in which he had played a critical part and I a small one. But he answered most of my questions briefly, adding little to what I already knew, and then waved his hand to indicate disinterest.

That is all in the past now, he said. You and I should discuss a future where our countries are not enemies but friends. And so we did, two politicians discussing the business between our countries that had brought me to Vietnam.

Giap was a master of logistics, but his reputation rests on more than that. His victories were achieved by a patient strategy that he and Ho Chi Minh were convinced would succeed—an unwavering resolve to suffer immense casualties and the near total destruction of their country to defeat any adversary, no matter how powerful. "You will kill 10 of us, we will kill one of you," he said, "but in the end, you will tire of it first."

Giap executed that strategy with an unbending will. The French repulsed wave after wave of frontal attacks at Dien Bien Phu. The 1968 Tet offensive against the U.S. was a military disaster that effectively destroyed the Viet Cong. But Giap persisted and prevailed.

The U.S. never lost a battle against North Vietnam, but it lost the war. Countries, not just their armies, win wars. Giap understood that. We didn't. Americans tired of the dying and the killing before the Vietnamese did. It's hard to defend the morality of the strategy. But you can't deny its success.

Near the end of our meeting, I made another attempt to test Giap's candor. I asked him if it were true that he had opposed Vietnam's invasion of Cambodia. He dismissed that too, with something like, "the party's decisions are always correct."

With that, our meeting came to an end. We stood up, shook hands, and as I turned to leave, he grasped my arm, and said softly, "you were an honorable enemy."

I don't know if he meant that as a comparison to Vietnam's other adversaries, the Chinese, the Japanese or the French, who had killed his wife, or if it was an implicit recognition we had fought for ideals rather than empire and that our humanity had played a part in our defeat. Maybe he just meant to flatter me. Whatever his meaning, I appreciated the sentiment.

Mr. McCain is a Republican senator from Arizona.

I work for Uncle Sam, and I’m proud of it

The author is a career Foreign Service Officer who has served in Tel Aviv, Baghdad and Washington. The views expressed here are his own and not necessarily those of the State Department or the U.S. government.

I am a federal bureaucrat. A professional government employee. And guess what? I’m damn proud of it.

It seems that all I hear these days are the once and future leaders of our country tripping over themselves to denigrate the work we do. I’m tired of it, and I’m fed up. I don’t claim to represent anyone other than myself, but I would bet that a fair number of federal employees feel as I do. We are lawyers, doctors, PhD students, economists, writers, electricians, construction workers, security officers and technology specialists. We are not a drain on the national economy; rather, we are a primary reason why the United States remains as great as it is.

Like many federal workers, I have sacrificed: a high-paying job in the private sector; a year of my life (and the first six months of my daughter’s life) spent in Iraq; long hours; high stress; pay freezes. I’m not complaining; in fact, I quite enjoy my career and my life in the Foreign Service. Yet when I hear our politicians talking about “fixing” Washington, I often wonder to myself: whom would they like to “fix?” Is it the guy I see on the Metro every day, heading to work at the Food and Drug Administration to ensure that our food is safe? Is it the woman going into Commerce Department headquarters to support U.S. companies abroad? Or do they mean the thousands of people who support our troops overseas? How about my fellow Foreign Service officers, who put themselves in harm’s way in Baghdad, Kabul, Damascus and hundreds of other places around the world?

GALLERY

Toles Cartoons for February: From budget fights in Washington to protests in the Middle East.

I have no doubt that some within the federal bureaucracy simply show up each day to collect a paycheck. I also have no doubt that this happens within any number of multinational corporations, small businesses and law firms. But I know for a fact that most of us do this job not because we want to make a lot of money but because, simply put, we want to serve our country.

There was a time, not long ago, when government service was seen as a higher calling. That’s the reason I decided to join the State Department in 2005 — not because I wanted job security or good health benefits, but because I wanted to devote my life to making this country stronger, to making the world a better, safer place and to have a career I was proud of. Seven years later, I still get excited to come to work every morning. I still get a thrill when I enter the State Department and see the flags of every nation with which we have diplomatic relations. And I certainly get chills each and every time I see the U.S. flag on one of our embassies. I’m fairly sure I am not the only federal employee who feels this way.

So to all our politicians, I implore you: Stop using the government workforce as a political football. Just stop. It demeans you, it demoralizes us, and it is counterproductive to drive away the best and brightest from working for the betterment of this country.

We don’t do our jobs for glory, or money or power. We do them — and do them well — because we take pride in our work and pride in representing the United States of America.

Read more about federal workers:

Ed O’Keefe: The Federal Eye | How can federal workers change Capitol Hill’s perception of them?

Tom Fox: The Federal Coach

Al Kamen: In the Loop

Noonan: Why America Is Saying 'No'

September 7, 2013 12:11 AM

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