CE#661: The Coming Collapse of Average Managers and Employees (HBR Blog Network)

by Michael Schrage  |  10:00 AM October 23, 2012

“Whip your thoroughbreds.” That’s the phrase I kept hearing from Jack Welch-era high potential managers hurtling up GE’s global hierarchies. Brutally simple and simply brutal, this Welchian aphorism disproportionately drove top management behavior. The company found it got far greater value working its best people harder than by pushing its multitudes of “better than average” managers to work smarter.

The numbers were compelling. Even marginal returns from GE’s elite outperformed major enhancements from its mediocrities. “B” players proved poorer human capital investments than “A”s.

So “thoroughbred whipping” deserves a closer look in light of widely-publicized recent research entitled The Value of Bosses. The National Bureau of Economic Research Working Paper empirically argued (unsurprisingly) that bosses matter. Better bosses generate better results. Using a variety of accepted econometric/statistical techniques, the study found that the most significant impact bosses had didn’t come from their motivational skills, but from teaching workers how to be more productive, i.e. capability building. That’s important.

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