> But the ones being discussed in the article are the consistent ones.
I worked at GE when Jack Welch was there. First of all we never had a systematic firing of the bottom 10%. That is a myth. We ranked everyone each year and clearly identified the bottom 10% but they were not always fired. The manager did have to have a development plan for these individuals.
More importantly, GE did have consistent layoffs. I assert this was a good thing. I vividly remember asking an EVP at GE Capital when I first joined GE why we did this. It seemed inhumane. Wasn’t it better to try and fix the so-called ‘C’ players? His response fundamentally changed my view on hiring, leadership, and firing. He told me two things. 1) Hiring people is always a gamble. The best interview/onboarding processes will not produce 100% success. There will people that do not have the skills that are needed. There will also be people for whom GE is simply not a good cultural fit. 2) In good times, when a GE business unit is doing well, they always over hire. People working 50 hours a week want to work 40, process problems that have built up need to be addressed (similar to tech debt), etc. Over time this leads to bloat and inefficiency.
For these reasons, consistent layoffs make sense for the company. They also make sense for the employee. By not waiting for an economic downturn and then making dramatic cuts, the exiting employees would have an easier time finding the next job as odds are the economy would doing well. Particularly in the case where the person was not a good fit for the GE culture, they learned this and could find a better fitting role elsewhere. And GE was great on the resume back in those days (sadly not so today). If we waited for the downturn, then the exiting employees would be looking for a new job in a bad economy with everyone else who had just been laid off. Not a good situation.
Finally, an additional point I learned later by observing when and where we made headcount reductions. GE made many bets on new markets, new products, etc. We had to if we were to grow by 10% each year (GE Capital’s rigorous requirement for business and strategic plans). The successful GE leaders understood is was easier to grow revenue to achieve 10% net income growth than to cut expenses. Unfortunately, not all new business ventures worked out. In those cases, we had to make a decision to shut them down (all new ventures had off-ramps). As a result, some people were repurposed, but others had to be let go. I posit that is consistent with the tech approach of “fail early, fail often.” In industries with significant people required to try a new approach, the consequence of failing will be layoffs.
My recollection is a very high percentage. Not clear what the alternative is. No action plans to help people improve their performance? Action plans also helped people understand their situation and allowed them to find other jobs while they were still employed at GE. For clarity, I never developed an action plan for someone who was then surprised to receive it.
I worked at GE when Jack Welch was there. First of all we never had a systematic firing of the bottom 10%. That is a myth. We ranked everyone each year and clearly identified the bottom 10% but they were not always fired. The manager did have to have a development plan for these individuals.
More importantly, GE did have consistent layoffs. I assert this was a good thing. I vividly remember asking an EVP at GE Capital when I first joined GE why we did this. It seemed inhumane. Wasn’t it better to try and fix the so-called ‘C’ players? His response fundamentally changed my view on hiring, leadership, and firing. He told me two things. 1) Hiring people is always a gamble. The best interview/onboarding processes will not produce 100% success. There will people that do not have the skills that are needed. There will also be people for whom GE is simply not a good cultural fit. 2) In good times, when a GE business unit is doing well, they always over hire. People working 50 hours a week want to work 40, process problems that have built up need to be addressed (similar to tech debt), etc. Over time this leads to bloat and inefficiency.
For these reasons, consistent layoffs make sense for the company. They also make sense for the employee. By not waiting for an economic downturn and then making dramatic cuts, the exiting employees would have an easier time finding the next job as odds are the economy would doing well. Particularly in the case where the person was not a good fit for the GE culture, they learned this and could find a better fitting role elsewhere. And GE was great on the resume back in those days (sadly not so today). If we waited for the downturn, then the exiting employees would be looking for a new job in a bad economy with everyone else who had just been laid off. Not a good situation.
Finally, an additional point I learned later by observing when and where we made headcount reductions. GE made many bets on new markets, new products, etc. We had to if we were to grow by 10% each year (GE Capital’s rigorous requirement for business and strategic plans). The successful GE leaders understood is was easier to grow revenue to achieve 10% net income growth than to cut expenses. Unfortunately, not all new business ventures worked out. In those cases, we had to make a decision to shut them down (all new ventures had off-ramps). As a result, some people were repurposed, but others had to be let go. I posit that is consistent with the tech approach of “fail early, fail often.” In industries with significant people required to try a new approach, the consequence of failing will be layoffs.