What if you had to fire 1 in 10 people every year?

I have waste in my life.

I have a lot of things I could throw away.

Old toys, broken computers, screens with cracks, lawnmowers that don’t work, Lego with bits missing, cables that I cannot remember what they’re for … the list goes on.

This is my debt. My debt of waste. A house full of things that need to be thrown out, but I feel embarrassed to give it to the bin-men as there is sooooo much. Sooooo much waste.

So, the waste sits in the garage. It’s my house debt.

I wonder about waste in companies.

I know there’s a lot, but do companies ever do a spring-clean? Do they ever clear their waste? Are they embarrassed about the bin-men? If not, they should be.

It’s what we call debt. Process debt. Technical debt. Corporate debt. And more.

As you see organisations grow, you see the fat grow too. They become burdened with overheads that are not necessary. They create workflows that don’t flow. They add technology that cements those flows in place. And then they add people and structure that ensures the flows cannot change … unless there is revolution.

That’s where the innovators arrive.

The innovators are hired to target the corporate waste; to do the spring-clean; to get rid of overheads; to create something new.

That’s where the clash begins. The clash between keeping the waste versus re-writing history.

I guess that’s true in corporations as much as my house. I know there are things that need to be thrown out and repaired, but can I be bothered? It’s a pain. It’s the same in a company. Every company knows that there are departments, lines of business, products, services that don’t work as they should. But can they apply the pressures to get them right?

It’s a tough ask. By way of example, look at the people who work with you. Are they all needed? Is there someone who does not perform? Is there someone whose role is not really required? Is there a waster?

There’s always a waster.

It is why Jack Welch, the late Chairman and CEO of General Electric* – and generally viewed as a great business leader – fired 10% of the workforce every year.

One of Welch’s most famous leadership dictums was the active removal of the bottom ten per cent (“the C players”) of each business unit’s employees each year. According to Welch a company will broadly have 20% A players, 70% B players and 10% C players.

Your company tasked you to fire 1 in 10 of your work colleagues every year to ensure the company stayed agile and focused. It's a tough ask. Imagine you are in a team of 10 people, and one has to go. They're a friend, a colleague, someone you've seen every day. And you have to fire them. It's hard but that dictum was aimed to ensure that people are worried every year, and work harder.

You may or may not like this concept, but I can see the logic. Create focus and fear; get people working harder and eradicate waste; cut the fat of the company and ensure it is lean and agile.

The thing is that, like my house, the longer you live in it, the more waste it has. When I first moved in, everything was neat and tidy. We unpacked the boxes and got rid of all the waste. At the start, there was no waste. Now, years later, the house is full of stuff. We need to either move or bring in someone who can spot the waste. No wonder we use consultants to point out the obvious.

Bottom-line: get rid of the fat, the waste, the overhead, the people who don’t produce and the lines of business that we don’t need. Get rid of the products that don’t work and the services that aren’t needed. Look for these excesses all the time. Don’t ignore them.

 

*Postnote:

The late Jack Welch CEO of General Electric from 1981 to 2001, probably isn’t the ideal model for 21st-century executives. However, three aspects of his leadership remain relevant today. First, get people decisions right. Welch was passionate about putting the right people in the right roles. Second, speak with candor. He always asked probing questions and delivered frank feedback. Third, be insatiably curious. Welch always had a hunger to learn. These are principles that can work for today’s managers as well as they did for him.

Source: Harvard Business Review