Cut the Fat

Making hard choices is a reality no leader can deny. To make sure your business is running efficiently, one often needs to lay off co-workers, subordinates and even friends. There’s no easy way to do this, so it’s best to do so with as much respect for the employee/colleague as possible.  

Jack Welch (ex CEO General Electric) laid off 1 in every 4 employees on GE payroll in his first 5 years; a total of more than 155,000 people were laid off in this duration. Nobody likes to lay off people but this goes to show that any good leader has to give the axe to employees sooner or later. A strategy the tycoon mentioned in his bestseller book “WINNING” is the rule of 20-70-10. Identify and divide your employees into the top 20% and bottom 10% performers. The top 20% should be promoted, encouraged and given additional responsibility and the bottom 10% should be laid off.  

Many criticize this technique of differentiation and call it crude, but what they don’t see is the practicality. By not laying off the bottom 10% , you’re not doing anyone a favor. These are people who themselves know they’re not going to be promoted, and by letting them go, you allow them the opportunity to find a better fit for them. More often than not, after a while, they’re usually better off at working someplace else.  

The point is, you can only ignore it for so long. Instead of passing it off and avoiding the matter, take action and cut the fat.