Ask HN: Why what worked for GE didnt work for Microsoft

a) We don't actually know that it worked for GE. There were a lot of changes under Welch, so there were a lot of simultaneously changing variables. I would contend that the "10%" policy had smaller potential than lot of the other changes. Note that one of the changes was changing from a company that was primarily an "old guard" manufacturing business to one whose net income is nearly 50% from its financial subsidiary (<a href="http://en.wikipedia.org/wiki/GE_Capital" rel="nofollow">http://en.wikipedia.org/wiki/GE_Capital</a>) - before the recession, it was substantially more than 50%. That is a huge change.<p>b) GE under Welch was an old, established, stagnant company. My personal theory (pure speculation) is that GE had built up a lot of inefficient processes: whenever something bad happens, regardless of the probability of it recurring, the natural response of (especially large) corporations is to write another procedure to prevent it from recurring. GE also likely accreated lots of ineffective employees over the years (to write and follow the ineffective processes ;-).<p>As a result, GE under Welch was able to cut a <i>lot</i> of costs out of their manufacturing processes by re-evaluating the cost vs. effectiveness vs. benefits of them. All those cut costs would flow to their bottom line, at least for a while.<p>Note that GE's stock has been pretty flat (struggling, even) for the last several years. According to my speculation above, this would be because they squeezed all the excess costs out of their manufacturing and their financial division took it on the chin with the downturn, leaving them sucking wind. So...<p>c) Jack Welch's changes happened in a different era and were in response to a different situation. A solution that works for a totally different company than Microsoft in a totally different era isn't likely to be effective when applied blindly to e.g. Microsoft.

I worked for GE in the late 90's (as a Software Architect/Mgr) and dealt with the reviews of my team and had visibility to other teams practices. I can tell you getting rid of the bottom 10% was generally a good thing. But it is how you treat these people and how you "get rid of" them that matters. I am not personally aware of how Microsoft handles it, but I know in my group (and division) we helped the C players find other projects or divisions where their skills would be a better fit; or in the case where that wasn't possible we helped ease their transition out of GE.<p>We also never said they were bad people, just bad fits for the project/team -- and I know my management dictated that respect for them was not optional. I think a lot was made and overblown about that process because really it was a healthy organization doing what it should. And in the end the remaining employees were more motivated because we didn't make them hang with C players, and I saw a number of people that felt it was handled properly and with respect to those leaving, so they felt they would be treated with respect to. Many times we would let people job hunt, print resumes onsite etc just to help them with that transition.<p>Also, I am sure some groups in GE that handled things better than others, so I am have no doubts other GE people would call GE's policy horrible and badly implemented. But from my experience it was healthy overall. My management also made it very clear to me that if any of those bottom 10% felt shocked to be there than I failed as a leader and I would be held accountable. If you are in that bottom 10% you should know it for 6 months or longer before you are let go, otherwise it is unfair to you and there is no way to recover.<p>I also would agree with the comment that GE had a lot of inefficiencies that it needed to deal with, and I would say a lot of bloat of C players that had invaded and camped out for years. So I believe it was a good process for a limited time, and once you get back to being lean it isn't necessary, and could hurt morale pretty easy because you are letting go of people that are still performing with really no valid reason. And at least from what I saw at GE, we never took it this way. I never once was told there was a mandate to terminate 10% of my staff or team, and I was trained at the famed Crotonville facility.<p>As for how Microsoft handles it, there are a million ways to blow it and cause people to feel unappreciated and demoralized. Who know's what they are doing.<p>The comment on who knows if it worked for GE, I think has some validity, but in reality I think it did the organization a huge amount of good. If for nothing else to remove the bloat and get a bit leaner. Of course, I would argue a company with 300k people is never really lean, but that is a different discussion.