Jack Welch, the former CEO of GE, may have been nicknamed “Neutron Jack” for his reputation of restructuring companies and firing people at warp speed. However, he was also brilliant at building teams. He didn’t fire indiscriminately, and to those he kept on board, he was fiercely loyal. In many ways he was fantastic at getting the right people on and off his bus. He’d even remove superstar performers who were not aligned with the culture or values of the company.
This is a simple matrix he used to help him decide who to keep or get rid of.
High values + High performance = Handcuff Them
High values + Low performance = Train Them (But before you do, make sure they’re in the right seats).
Low values + High performance = Fire Them
Low Values + Low performance = Fire Them
Welch would fire employees who were low in results and low in values. Pretty simple approach, and no one seems to disagree with those decisions in any company.
Employees who were low in results, yet high in values, he’d train. He’d ensure they had a 90 day performance/professional development plan and he’d try to help them make progress in their role. If they did, they’d get another 90 day plan with goals to meet. If, however, after one to two quarters they didn’t make progress, they had to be let go. He recognized that at some point low performance meant dismissal.
Employees who had high results and high values would be handcuffed to the company. Welch found ways to ensure they never left the company. He found out what motivated and satisfied these people and ensured they stayed inside the GE family. He’d even buy a company to let a person serve as CEO of a company if that’s the only way he could keep a senior person waiting for his job to open up.
Welch was truly brilliant in confronting the brutal facts. If an employee had high results but low values he’d fire them. That’s right. He’d fire the superstar performers who just didn’t fit in or whose egos had become bloated. He realized that their misfit culturally was doing more harm than good. It’s really hard to let go of these superstar performers but if all your employees are complaining about them, your customers likely are, too.
