Companies win when their managers make a clear and meaningful distinction between top and bottom-performing businesses and people, when they cultivate the strong and cull the weak. Companies suffer when every business and person is treated equally and bets are sprinkled all around like rain on the ocean.
It’s a process that requires managers to assess their employees and separate them into three categories in terms of performance: top 20 percent, middle 70, and bottom 10. Then—and this is key—it requires managers to act on that distinction.
Some people feel that differentiation is "cruel and unfair" and they are right if its not done properly. Poor business allow differentiation to be corrupted by company policies and is just another way to separate the people who "Kiss the boss's rear" from those who dont.
It is true, without question, that at some companies, differentiation is corrupted by cronyism and favoritism. The top 20 percent are the boss’s head-nodders and buddies, and the bottom 10 percent are the outspoken types who ask difficult questions and challenge the status quo. The middle 70 are just ducking and getting by. That happens and it stinks, and it is a function of a leadership team lacking in brains or integrity or both.
The only good thing I can say about a merit-free system like this is that eventually it destroys itself. It collapses from its own weight or has to change. The results just won’t be good enough to sustain the enterprise.
Differentiation abuse can generally be prevented by a candid, clear-cut performance system, with defined expectations and goals and timelines, and a program of consistent appraisals.
You cant just impose differentiation overnight, this needs to take effect over time and a full understanding of it structure needs to be implemented. Managers who "abuse" the system need to be removed and made a example off.
Leadership quote number 4 from my Book Key Leadership "Stop putting personal preferences ahead of organizational effectiveness."
Look at the 4E' and P for understanding where your team's site in the 20-70-10.
The First E. Energy. The ability to Go Go Go. Do people look at this person and say "how do they have the time to do that stuff"?
The second E. Energize. The ability to get other people revved up. Can they energize a group, a project, a team, a region?
The third E. Edge. Look, the world is filled with gray. Anyone can look at an issue from every different angle. Some smart people can—and will—analyze those angles indefinitely. But effective people know when to stop assessing and make a tough call, even without total information.
Some of the smartest people I know have a real difficulty with edge. In every situation, they always saw too many options, which inhibited them from taking action. That indecisiveness kept their organizations in limbo.
The Forth E. Execute. The ability to get the job done.
And lastly P. Passion. Do they show passion.
Do you people pass the Acid test? Integrity, Intelligence, maturity.
Grade your people on the 4E's & P. ask yourself, "do they pass the Acid test?" If the answer is no, they belong in the bottom 10 and should be managed accordingly.
I'll say it again as this is the most important thing in Differentiation. Integrity. DO NOT let your personal opinions enter into the evaluations. You have a responsibility to the organization, the people within the organization, their families, the share holders and yourself to have the best people in the roles that can enhance the organizations effectiveness.
That's your job as a leader.
Evaluate yourself on the 4E's & P. Do you pass the Acid test??
It’s a process that requires managers to assess their employees and separate them into three categories in terms of performance: top 20 percent, middle 70, and bottom 10. Then—and this is key—it requires managers to act on that distinction.
Some people feel that differentiation is "cruel and unfair" and they are right if its not done properly. Poor business allow differentiation to be corrupted by company policies and is just another way to separate the people who "Kiss the boss's rear" from those who dont.
It is true, without question, that at some companies, differentiation is corrupted by cronyism and favoritism. The top 20 percent are the boss’s head-nodders and buddies, and the bottom 10 percent are the outspoken types who ask difficult questions and challenge the status quo. The middle 70 are just ducking and getting by. That happens and it stinks, and it is a function of a leadership team lacking in brains or integrity or both.
The only good thing I can say about a merit-free system like this is that eventually it destroys itself. It collapses from its own weight or has to change. The results just won’t be good enough to sustain the enterprise.
Differentiation abuse can generally be prevented by a candid, clear-cut performance system, with defined expectations and goals and timelines, and a program of consistent appraisals.
You cant just impose differentiation overnight, this needs to take effect over time and a full understanding of it structure needs to be implemented. Managers who "abuse" the system need to be removed and made a example off.
Leadership quote number 4 from my Book Key Leadership "Stop putting personal preferences ahead of organizational effectiveness."
Look at the 4E' and P for understanding where your team's site in the 20-70-10.
The First E. Energy. The ability to Go Go Go. Do people look at this person and say "how do they have the time to do that stuff"?
The second E. Energize. The ability to get other people revved up. Can they energize a group, a project, a team, a region?
The third E. Edge. Look, the world is filled with gray. Anyone can look at an issue from every different angle. Some smart people can—and will—analyze those angles indefinitely. But effective people know when to stop assessing and make a tough call, even without total information.
Some of the smartest people I know have a real difficulty with edge. In every situation, they always saw too many options, which inhibited them from taking action. That indecisiveness kept their organizations in limbo.
The Forth E. Execute. The ability to get the job done.
And lastly P. Passion. Do they show passion.
Do you people pass the Acid test? Integrity, Intelligence, maturity.
Grade your people on the 4E's & P. ask yourself, "do they pass the Acid test?" If the answer is no, they belong in the bottom 10 and should be managed accordingly.
I'll say it again as this is the most important thing in Differentiation. Integrity. DO NOT let your personal opinions enter into the evaluations. You have a responsibility to the organization, the people within the organization, their families, the share holders and yourself to have the best people in the roles that can enhance the organizations effectiveness.
That's your job as a leader.
Evaluate yourself on the 4E's & P. Do you pass the Acid test??
RSS Feed
