CEO Lessons Learned 1 – Differentiation

In our client work we often get a chance to discuss with CEO’s matters that evolve into significant lessons learned for our clients and ourselves.

 The Dilemma of Differentiation

The most recent edition of the Harvard Business Review focused on Talent Management highlighting a Center for Creative Leadership study on High Potentials.  The findings highlighted the need to reconcile the fact that High Performers are not always High Potentials. 

 The article also indicated a need to insure that assessment protocols or “rack and stacks” are based upon enterprise reality vs. a rigid application.

 The following was derived from a recent client experience.

 “A global Financial Services company over the years had introduced the Differentiation espoused by GE whereby each year the “bottom 10%” were invited to leave the company.  The selection of 10% was somewhat arbitrary as those in GE would be the first to acknowledge.

 As we entered the recession many companies used many formulas to restructure.  Those whom are being brutally honest indicate that the recession allowed them to pare down the ranks “starting with those who should not be here”.  

 So the hypothetical question we posed to our client “why are you continuing to arbitrarily take out 10% of your now significantly reduced workforce?”

 The recession has increased enterprise productivity because of the significantly reduced workforces.  In this client’s instance they acknowledged that among the 10% who would be leaving in fact had some terrific performers in the population. 

 Eating chocolate to excess will make one heavy….as will dismissing good performers to adhere to an arbitrary percentage set when times were different, will reduce the enterprise IQ.


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