Why Does Rank and Yank Seem To Work? (The Jack Welch Syndrome)

Some companies, such as General-Electric (GE) under former CEO Jack Welch) claim to have succeeded because of the use of rank and yank. Is this accurate? The truth is we don't really know. It may be that under Jack Welch, the company made great strides, and it may also be true that one of the things that operated at the same time was the use of rank and yank techniques.

Does that mean that rank and yank caused the success? Almost certainly not, or at least, while it may (and it's a big may) have contributed, there were perhaps hundreds of other factors that also contributed much more strongly to the success of GE.

The logical error often made is that while two things (rank and yank, and success) may occur around the same time, it does not mean that one (rank and yank) caused the success. In fact, in the case of GE, it's clear that the leadership of Jack Welch was a major determinant of their success. That means that when companies try to emulate this success, and attribute its success to the rank and yank process, they will fail. Perhaps they need to hire Jack Welch, rather than look at fallacious cause and effects relationships.

As an aside, this process of misattribution of cause is a major reason why management fads occur. Something appears to work in one place, gets publicized, and others try to "copy", unaware that the reasons why the original company succeeded had absolutely nothing to do with the "fad". In this situation rank and yank may work or appear to work, but you'd need Jack Welch at the helm to replicate the success.