THE ENTERPRISE
There are so many things to cover, I just chose a variety this week.
FORCED RANKING AND DIFFERENTIATION
First, let's touch briefly on whether it is a good, or bad, idea to use some kind of forced ranking in evaluation of people's performance in their jobs? Jack and Susie Welch weighed in on this topic in their column in the Oct. 2 issue of Business Week. I heard a lot of Jack's voice in this column, and mostly I agree with him. There are always weaker performers in any organization, although the reasons vary widely, and the individuals may or may not be to blame.
Bottom line, the value of forced rankings--as long as the percentages are not rigid, is that it rewards the strongest performers substantially more than the "average." There is way to much aversion to giving criticism during performance reviews, therefore everyone becomes a "good person." That cultivates a cutlure of amiable mediocrity which may win popularity contests but will not win in a brutally competitive global business world.
Weaker performers know it--at some level--and they deserve to be told honestly, and given an chance to opt out or be placed out. If there is a better place for them in another organization, that is a better solution for both their former and new employers. This isn't harsh or unfair, it's actually humane and fair treatment.
A TALE OF TWO FACTORIES (BW 9/18/2006)
If you don't read Business Week, you need to find the story from the Sept. 18 issue about the difference between two Tenneco factories, both making auto exhaust systems. One is near Shanghai, China, then other in a small town in Michigan. As you might suspect, these plants are very different. The surprising/not surprising facts are that the one is the US is both more profitable, and more nervous about its future. It is a well written contrast between two different ways of competing, coexisting in the same company, close to the markets each serves. (Exhaust systems are way too bulky to ship across the ocean economically...for now anyway.) There are lessons to learn here.
CAN DELL ESCAPE FROM THE "PENALTY BOX?"
I think Michael Dell is a sharp guy. He and his company forgot the most important lesson I wrote about in my book The Shape Shifters (Wiley, 1997). The customers define value in their minds and the "shape of value" is always shiftings--so you'd better shift with it. Dell didn't. Can it now? Too soon to tell. I think "probably" is a good answer, but once you fall behind the shifts, catching up is hell. I'd place my bet that Dell does catch up, but it will have some scars on its legendary reputation when it does.
ARE WE IN FOR A RECESSION IN 2007?
Probably not, but so many things could change that. If housing's decline is a correction (flushing speculators out of the market) and not an outright collapse, that would help a lot. If oil pricing stays "moderate", which it could (because it too has flushed a lot of speculators out of the market pricing). If the Fed stays calm and doesn't raise interest rates, that will help. The Fed could actually lower rates, but the better bet is that it sits and watches until early 2007.
IS THE PROBLEM BUSH OR THE WHOLE GOP?
Yes, I'm afraid both. The Wall Street Journal, a paper that usually slants to the right (Republican) recently recapped the GOP record (Oct. 2, 2006 Review and Outlook). It was ugly. Ignoring the biggest issue, the war on terror and the Iraq situation, I counted 6 flops and 1 success in the past 2 years. The flops are pretty well known: 1) Failure to make tax cuts permanent; 2) No immigration reform progress; 3) No real health care system progress; 4) No Social Security reforms; 5) Hurricane Katrina mismanagement; 6) Over-spending and earmarking to retain power, 7) No line item veto for the President.
What was the success? We put 2 good Justices on the Supreme Court. The rest is an embarrassment, not counting Bush's mishandling and his administrations hubris.
SO SHOULD YOU VOTE DEMOCRATIC BECAUSE OF THIS? HELL NO!
The only things worse than voting back most of those screw-up Repulbicans into the Senate and House would be to put the Democrats in there. As much as I am under-whelmed by Dennis Hastert, the prospect of Nancy Pelosi in that spot is downright gut wrenchingly scary. Face it. Both parties are screwed up. Neither has been exhibiting the kind of leadership we need in Washington--and neither has the President.
THINGS DO HAVE TO CHANGE--BUT HOW?
Is it time for things to change? Yes, but how to bring about that change is a much dicier issue. IF you can find a moderate Democrat running against a clearly incompetent Republican, OK...vote for the Democrat. But remember, it's always easy for the person who is not holding the office to say how much better they'd do. It's not nearly so easy to deliver on those promises. If ever there was a time to really study the positions, the qualifications and the merits of the candidates (instead of voting that party line), this is the year.
When all the dust settles, Bush will still be the President. The only question is how lame of a lame duck he will be. It matters because it hugely affects the US influence in foreign affairs. We are already damaged badly in that area. The best medicine would be a really close call in the fall elections. Maybe those incumbents would pay attention then (but I'm not even sure of that--guess I am getting jaded). This is about as disappointed I have ever been with our national political system and the people we elected to serve.
I suspect many share both the frustration I feel and the concern about our future direction. If any of you reading this have a hot-line into our elected officials in Washington, please let me know so we can all use it to tell them how we feel. That's better than just throwing them out. Even Jack Welch would probably agree with that.
Best, John
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