Rank and yank was a business practice at Enron that ranked all employees and routinely fired the bottom 15 percent of performers. This culture created conflict within the business and praised the most talented and put them on a pedestal. Only the strong survived, creating a smug insecurity that valued success at all costs.
In Enron's case, the top performers, in a drive to be perceived as the best, engaged in unethical business practices, and consequently, brought down the whole company.
Weed Out Only a Handful
The drive to rank high in performance encourages short term results and not long term learning. By shining a spotlight on talent, Enron created a competitive cut throat culture that discouraged teamwork, growth, and learning. In its place was cutting corners, holding back information, deceptive activities, distrust and lying.
Enron taught us that ranking and grading people can put a very low ceiling on potential. Just like IQ tests, if you score poorly on a matrix, you lower your expectations for the future. Trust is significantly important.
The ranking also opens up the culture to deception and hero worshiping that dampens real growth and team spirit.
Talent helps, but there isn't a shortcut to success. Hard work is the best way to get ahead. Good news for anyone who believes their friends are smarter or more capable, we all stand a chance to succeed.
More important, is the effect that worshiping talent has on company morale. A culture of growth and learning would shine a light on group success, not individual talent.
This blog was updated on December 26th, 2018.