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Why GE had to kill its annual performance reviews after more than three decades

Dilbert's yearly performance review

Yearly performance reviews come in many shapes… they could probably all, with benefit, be replaced with a closer and better dialogue in the daily work life. The comic strip is from an article with the opposite opinion.

“…we think over many years it had become more a ritual than moving the company upwards and forwards”.

This is what happens to many ideologies in companies – either they are never believed and quickly dies out, or they are believed to a level where they have no foothold in reality – and, hence, are being maintained far beyond the point where it should have been clear that they do no good.

What is particularly interesting in many company change programs is that the companies often stay in them for decades. What really should have been a transition to another way of working, a development of the company, becomes an eternal hunt for the original ideal – ignoring all of the natural development of the company that happens in between. And therefore Six Sigma or the yearly performance measurement could not survive in GE in the long run.

Often it is said that any kind of improvement program will not work – it will be attempted, then left behind and a new one will be attempted. The main reason for this is that every improvement program should be specific for each company: you cannot copy others’ success, because the preconditions and the situation in general for your company will be different. And, as mentioned above, life goes on during and after the transition, which must be taken into account as well and included in the general management scheme. The transition itself really should go, quickly, from a special change project into becoming standard management practice in the company, which additionally should keep adding, removing and adjusting such practices, as life moved on.

The article below, written by Max Nisen and published on Quartz, is full of interesting thoughts!


The annual performance review has been a ubiquitous  and generally loathed fixture of the corporate world for decades. But haters can rejoice: It’s finally starting to topple. The best part? Even the company that popularized the toughest form of formal annual review is moving away from them.

For decades, General Electric practiced (and proselytized) a rigid system, championed by then-CEO Jack Welch, of ranking employees. Formally known as the “vitality curve” but frequently called “rank and yank,” the system hinged on the annual performance review, and boiled the employees’ performance down to a number on which they were judged and ranked against peers. A bottom percentage (10% in GE’s case) of underperformers were then fired.

The company got rid of formal, forced ranking around 10 years ago. But now, GE’s in the middle of a far bigger shift. It’s abandoning formal annual reviews and its legacy performance management system for its 300,000-strong workforce over the next couple of years, instead…

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How to say what really matters? By listening!

Common language is not about words

Apart from all the things we say in daily life – things without any real meaning but which serve a social purpose, such as please, thanks, you’re welcome – there are lots of more things to say if your team should be able to accomplish anything.

For that purpose many team building programs try to give the team members a common language – for instance in the shape of corporate values and their deduction, or a vocabulary from one or more project management methodologies. Even though such a common language at times has a real meaning it often becomes a short lived gig. After a while, it has been forgotten and you and your colleagues are back to where they where before, talking like you always did.

Why does this happen? Because of the lack of contents. You may say a handful of positive words every day for a few days and think of it as a great thing – but gradually you get tired of it. It becomes a reduced form of New-speak (from the novel “1984”), the language that could only express positive thoughts (so that people could not express any unhappiness with the current state, and hence, not start a revolution). Being restrained from expressing yourself in your own way makes your words less rich and therefore less valuable. You feel degraded.

Language without contents

The prevalent idea of positive thinking (and speaking) is in the same league: if you cannot tell about problems, you cannot tell what really matters. In the end the idea will kill itself, just like the corporate values and the methodology vocabulary, at least on an everyday basis. The positive speaking will be something to be used on special occasions where nothing important needs to be said, like at receptions and department meetings.

You can easily see what is wrong with it by watching this video. It does express a kind of world lingo and at first it is quite entertaining and makes people smile. But for how long? Maybe you would like to test yourself? For how long do you consider the positive and meaningless language of the video to be better than a discussion about some real world problems that need to be addressed?

Purpose of the language

When a dialogue friendly environment should be established, an environment that can support real progression and problem solving, support development and production, it is much better with a rather different approach: instead of talking in a positive “least common denominator” language, try talk as yourself and expect the same from people around you – and then start listening to what is really being said. Not the words being used or the topics being touched, but one level behind all that.

Try to understand what is the reason for what is being said. If someone said a taboo word – why did they do it? Maybe there really is a problem with the toilet? Or maybe nobody seemed to listen to them when they tried the positive babble and therefore they now tried something else?

If you start paying attention to the meanings expressed rather than the words used, and if people around you find that they can safely do the same – if you all stop focusing on individual words and look for meanings – then you have indeed established a common language that will prove useful for collaboration.

Start with listening! “You have only one mouth but two ears”, as successful telemarketing people quickly learn. So you should listen twice as much as you speak. And try to get the meaning rather than the words. Then it will work. It is that simple!


The comic strip was found at the Chiradox blog.

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Everybody will make their own path

The title is a cite taken from a comment to a post today at LinkedIn. The post was by one of my connections and was about various things he didn’t like too much about LinkedIn and which he suggested them to change.

Quite a lot of comments came in on that one – like so often on “meta”-topics: those topics witch are about how we live our lives rather than about the actual living of it. And one of the comments simply stated this, that you cannot dictate how people should use a social medium like LinkedIn. Maybe the post-writer would prefer it to be different, but others probably liked it this way – and “everybody will make their own path”. Whatever structure and whatever features are available will be used or not used by each individual according to their own decisions and probably also partly by coincidence. You cannot control it.

After taking a long walk, having a nice dinner (well, a TV-dinner, actually) and doing different things at home, I now must admit that this about individual paths made some understandings meet in my mind.

You cannot control change

The point is, that when doing process improvement activities in a company, you always expect people to change their behavior. If they will just make these small changes, then everything will get better. And you set up various formulas and theories and tools and documentation, so that everybody will know why they must change. And then they don’t!

It is so annoying to work with process improvement. We can, of course, jump from methodology X to theory Y and continue with ideology Z. And we can spend years and more years on it, and earn money on it, if all this attempted process improvement happens to be our job. Bu we cannot make people change. People will, of course, change, but they will do it along the path they set themselves. Then you can try to replace some of the people with others who are already moving along the path that you have set… think about it, your path. Not theirs!

What a lot of theorizing about change and improvement in companies tend to forget is that people are not bees, not ants, not any of such creatures who seem to function as one big organism. People are individuals, and all attempts to find a common social behavior will fail – or at least it will lead to approximations only.

You might be ably to coach each individual and by that guide their development. But it is very unlikely that you can guide them all into the same development, mainly because they have different starting points and all in all different lives, different interests in life, and different capabilities.

You should not try to control change

My suggestion is a different one than trying to control the change. I suggest that you instead make sure that you have people in place who do understand the reason why they are in the company.

I have always wondered who people  in larger companies can walk around doing only damage, like it so wonderfully is illustrated by the Dilbert strips. Why is it accepted that a middle manager is hiring 20 people, doing a lot of internal reorganization, closing down old activities, starting and closing down new activities, then firing the same or some other 20 people and all in all ending up with a ruin of a department? Without new products to sell, without the expertise that made the old setup valuable to the customers, and without the proud and happy staff that would be willing to walk through fire for the company.

If you want improvement, start with what you have and then add all the ingredients – of which the most important ones are trust, support, and an open mind – and then see what will happen, especially looking for what is good in what is happening. But get rid of those people who do not participate or who have an agenda, that has nothing to do with making the company work. Just make sure that you give time before concluding anything, as our perception of other people’s motives and thoughts tend to be wrong.

You should assist change

And most of all, accept that things will not go your way. You will be part of it all, but it will get its own life. If you are the manager, you can help solve specific problems and you can help get the resources and the recognition that makes the engine spin. That’s your job, nothing else.

Then people will make each their own path which, in a company populated with people who understand that they are, in fact, part of a company, will also be more or less a common path.

An example from nature

If you take a quick glance at the cover photo of this site, the one with the geese, you will see that this is exactly what is happening there. The geese are moving from the pond, hidden to the right, to the lake, hidden to the left. They always spend the days in the pond and the nights in the lake. The younger geese are not following a straight path, to say the least, but the older geese are guiding them a bit and patiently waiting for them to follow troop.

At the end of the day, literally, all geese will be in the lake – but how exactly they got there and at which point at the beach they entered it is left to each individual goose and coincidence to decide.

Those old geese are perfect leaders who do this organizational change twice a day during all summer. When winter arrives, they know that it is time to go south. And how they manage things down there, I suppose that some local observers will know better than I do.

This all looks very systemic, but think about what goes on in the mind of each of the younger geese – they no doubt feel that they themselves decide what to do and where to go. They take advice, they get inspired, they seek the goal that happens to be the same as the other geese’s goal, but they feel themselves that they are thinking, planning and acting as individuals. That they are making their own path.

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Trying hard to look like a success – about women’s rights, gold-trousers, and real values

It was a late evening, I was zapping around on the TV and found by accident a program about women’s equal rights (or the lack of them) in the USA.

Lack of social equality

It is, to me, quite ironical that the world’s self-proclaimed biggest democracy still, after having been ahead with so many other social developments, cannot find out how to give women equal rights. Along with tons of other social problems that mainly arise from the deeply rooted belief in survival of the strongest, or, in American language, the freedom to make your own happiness.

I am not against freedom or liberalism. It certainly is important also to me that it is possible for everybody to create something, rather than just being locked into the existing social and economical patterns. It just has to be possible for real, not as a fantasy. And it looks like if many women in the USA can only fantasize about creating something big, simply because they are locked up in such patterns that keep them from doing big things.

According to a woman speaking in the TV program, men are either making a career or are considered losers. There is no middle way. Men cannot have just the same job for a longer period, being happy about it – and they certainly cannot put the career on hold while going at home, taking care of the house and the children. But this is exactly what is expected from women. Hence, the lack of equality in society.

But a remarkable consequence has developed from this inequality: women dare to say to their boss that he can have it, now they are leaving and do not care about what that means for their future career options. And they do that, often, according to the TV program. They quit their job if it becomes too much of a burden, while men accept much more of what makes work life miserable. Because men must go through a career and be careful not to ruin any options, not to burn any bridges.

Being a success

We are not locked up in the same way in Denmark and Sweden, where I work and live. But as the USA has had (and still have) a huge influence on our way of living, we are to a high degree driven by the same values – money, things, promotions, pension savings, etc. for the men, less of it all for most women who then instead have a focus partly on home and a secured economy and status in life, partly on enjoying that life as much as possible – now! Children, if any, are being taken care of by the kindergarten.

But in both worlds, the USA and Denmark/Sweden, we all want a lot. And it requires at least some of us to be successful in an economical way. We need money. So we are selling a lot of life for the possibility to buy even more smart phones, TVs and other things. And we try really hard to look successful to others, because if we do not look that way, we aren’t! It is not common to try to look a bit deeper – when evaluating others, we simply look at the size of their car, their house, and their level of job. Then we know if they are successful.

Everything comes at a price

When I was a small child there was a children’s movie on TV, I think it was a Swedish one: The Boy with the Gold-Trousers. About a boy who discovered that he could just put his hand deep down in the pockets of his trousers, and there would be money. And he could do this again and again, until having filled his room with money. What he didn’t know at first, however, but which he did find out later, was that the money actually came from somewhere – the bank! So each time he pulled money out of his pocket, a corresponding amount vanished from the bank. And that, in the end, lead to a lot of trouble.

The morale of such a story is, of course, that wealth is not for free. That a high standard of living would need to be payed somehow, by some. That the hunt for gold-trousers and the wish to use them for more than the necessary leads to serious problems.

Which way does the inequality turn?

So maybe the apparently bad situation for women in the USA has brought something really good with it: the ability for at least half of the population to say no to the career race, to the abuse of the gold-trousers. The ability for women to say no and focus on real values, while men are still running around like headless chicken, unable to sit still long enough to feel and find out if it was true what the fantasy said to them, when they still believed in it: that money can buy happiness.

Instead the men in the USA – and we in Denmark/Sweden – must look like successes all the time, look like if we are without any trouble, without fear, without the need for a helping hand, and, as a consequence, without showing any understanding of the fact that others could face trouble, feel fear, and need a helping hand.

And in the mean time, women figured it all out and reached some values that are closer to their true wishes and needs, closer to the idea of actually getting something out of the economical success.

(And pardon for all the stereotyping).

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Welcome to the World Pendulum blog! | World Pendulum

May I introduce – a new blog!

Welcome to the World Pendulum blog! | World Pendulum.

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Seeing everything clearly from a moment of observation | The No Crisis Blog

Seeing everything clearly from a moment of observation | The No Crisis Blog.

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Respect the individual

Groups don't think - people do

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Seeing everything clearly from a moment of observation

Many years ago, a great book was written: “The Fifth Discipline”, by Peter Senge. I didn’t read it then – have read it only recently – but I understand how important this book and its thoughts have been for the development of a better understanding of certain things in companies.

Systems Thinking

“Certain things” is – as an afterthought – easily boiled down to the concept of systems thinking, which is an understanding that there is “more than meet the eyes” and that consequences can be found far away from the causes, in time and space. Actually, an assumed consequence might not be the consequence of anything in particular – but rather the effect of a system of objects and attributes that to a large degree is subject to “autopoiesis”; a self-maintainability, a solidity as a system, where even large changes in details still makes the system as a whole easily recognisable. An example is a human being, a person, where loosing a leg or a kidney doesn’t change the perception that it is still the same person. Or a company, where adding a new product or changing a work procedure is still done by the perceived same company.

Idea lost in companies

When I look around and try to understand how companies work, I do see activities done on the basic understanding of systems thinking. But I do not see results. Probably the abstract concept of “company” is in itself systemized to a degree where it also is subject to autopoiesis.

Companies are sharing knowledge – or at least, they try to. But most of the time that knowledge is not being used. Each employee, no matter the level, seems to have an idea of knowing something themselves that is more important in the situation than the combined and accumulated knowledge of the whole company collected over time. A moment of observation seems to give a person the confidence in seeing everything clearly and the ability to make the right solution, be it acting, advising or just drawing conclusions.

Companies also create new artificial problems, for instance by reorganizing, in order to ensure that nothing can be done solely by routine. This is expected to keep everyone in the company fit and establish a culture of innovation and problem solving. What it does is simply to ruin what works and make people frustrated over having to spend time on dragging everything back (or twisting and cheating the “new system”) in order to do what they did before. The only thing that is kept fit by this concept is stress and frustration – always being at a high level.

And companies are coaching, apparently in order to make sure that everyone can learn from others and get inspired to learn from themselves as well. But more often than not, the “coaching” is in reality being used as part of a control and incentive mechanism, where both the coach and the coachee must play certain roles and say certain things in order to not get punished by the system. They are not learning anything – and they are certainly not part of a learning culture – but are instead developing good faking skills.

Idea lost in life

Just now I am involved with a situation where someone close to me is spending a lot of time in hospitals and with seing doctors, nurses and people supposed to assist and advice in various ways.

And every single day I see how a moment’s observation can lead to what appears to be a full understanding of the “facts”. Doctors do this a lot. They conclude on everything from the need for a certain mineral to the quality of life for the patient. Nurses advice on taking medicine, simply because that medicine seems to work on other patients. Family members advice on whether the patient should live a valuable life with the risk of dying earlier – or to lie down in a hospital bed forever without really living, simply because that might prolong what technically can be called life.

And all of these people – and many more – often draw their conclusions and give advice on the basis of a moment of observation. On the basis of single events og a few words, they happened to hear from a longer conversation. It doesn’t appear to them that there might be more they need to know about before understanding the patient, the person system, well enough to give advice. As soon as they start talking, they feel confident that what sounds like a good advice really is. Without knowing. Because they feel that they can see everything clearly.

The future for systems thinking

It seems to me that the idea of systems thinking is living only in the thoughts of a few philosophically minded people. In real life, it has no chance since human beings are so dedicated to the positivist idea of cause and consequence, and the idea of simply finding the problem, and then (with the right experience), the cure is given and indisputable.

Did systems thinking ever have a real chance? Were people always like this? Do people in general care at all about understanding the situation – or are they more interested in being “right” in the eyes and ears of the people who listen to them?

Or, more philosophically – is life simply a matter of winning and loosing, not about understanding and improving?

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One World – Everybody Likes Projects and Change

Visitor distribution at nocrisis.net - all times

While excluding all the specifics, I thought that I would share with you how the statistics for The No Crisis Blog looks like at present – this is an all-time-count.

There are some surprises – for instance, can’t Chineses read my blog or are they not interested? Why are people from Norway and Iceland less interested than Swedes and Danes? Why are the British more interested than the Irish?

Some is less surprising – not the least that USA has hit the highscore. I have written a lot about Lean IT, which has a better foothold there. And then, the Americans are probably the most active on a lot of blogs – being an outgoing and participating people. Another less surprising fact is that Svalbard, with its population of about 2,600 people, never found its way to this blog.

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