Five years ago, Malcolm Gladwell wrote an article called "The Talent Myth" questioning the management zeitgeist that the NYC Department of Education has swallowed wholesale:
At the heart of the McKinsey vision is a process that the War for Talent advocates refer to as "differentiation and affirmation." Employers, they argue, need to sit down once or twice a year and hold a "candid, probing, no-holds-barred debate about each individual," sorting employees into A, B, and C groups. The A's must be challenged and disproportionately rewarded. The B's need to be encouraged and affirmed. The C's need to shape up or be shipped out. [One company] followed this advice almost to the letter, setting up internal Performance Review Committees. The members got together twice a year, and graded each person in their section on ten separate criteria, using a scale of one to five. The process was called "rank and yank." Those graded at the top of their unit received bonuses two-thirds higher than those in the next thirty per cent; those who ranked at the bottom received no bonuses and no extra stock options--and in some cases were pushed out.Gladwell writes at length about the management strategy of a dazzlingly successful company, which:
took more credit for success than was legitimate, that did not acknowledge responsibility for its failures, that shrewdly sold the rest of us on its genius, and that substituted self-nomination for disciplined management.How did this work out?
The broader failing of McKinsey and its acolytes...is their assumption that an organization's intelligence is simply a function of the intelligence of its employees. They believe in stars, because they don't believe in systems. In a way, that's understandable, because our lives are so obviously enriched by individual brilliance. Groups don't write great novels, and a committee didn't come up with the theory of relativity. But companies work by different rules. They don't just create; they execute and compete and coördinate the efforts of many different people, and the organizations that are most successful at that task are the ones where the system is the star.Gladwell concluded:
They were there looking for people who had the talent to think outside the box. It never occurred to them that, if everyone had to think outside the box, maybe it was the box that needed fixing.What company was Gladwell writing about? Enron.
I hesitate to invoke the comparison here, if only because Enron has become a cognitive shortcut term for too many things. Here's the parallel - Enron's organizational failure was not just the result of a handful of swindlers, i.e. Lay and Skilling. Enron created a organizational structure and incentive system that virtually ensured that gaming and malfeasance would occur.
As we wait for the grades, check out the entire Gladwell article.