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the concept receives. I’m leaving aside “hardware” differentiation here, because it doesn’t get anything like the heat that 20-70-10 does.
    So here are the criticisms of people differentiation. Some have truth in them, but more often than not, they don’t! Here’s what I mean:
     
    Differentiation is unfair because it’s always corrupted by company politics—20-70-10 is just a way of separating the people who kiss the boss’s rear from those who don’t.
     
    It is true, without question, that at some companies, differentiation is corrupted by cronyism and favoritism. The top 20 percent are the boss’s head-nodders and buddies, and the bottom 10 percent are the outspoken types who ask difficult questions and challenge the status quo. The middle 70 are just ducking and getting by. That happens and it stinks, and it is a function of a leadership team lacking in brains or integrity or both.
    The only good thing I can say about a merit-free system like this is that eventually it destroys itself. It collapses from its own weight or has to change. The results just won’t be good enough to sustain the enterprise.
    Luckily, cases of “differentiation abuse” can generally be prevented by a candid, clear-cut performance system, with defined expectations and goals and timelines, and a program of consistent appraisals. In fact, differentiation can be implemented only after such a system is in place, a process that we will discuss more specifically in the chapter on people management.
     
    Differentiation is mean and bullying. It’s like the playground in the worst possible way—weak kids are made into fools, outcasts, and objects of ridicule.
     
    I’ve heard this one a hundred times, and it really drives me crazy because one of the major advantages of differentiation is that it is good and fair—to everyone!
    When differentiation is working, people know where they stand. You know if you have a strong shot at a big promotion or if you need to be looking for other opportunities, inside or outside the company. Maybe some information is hard to swallow at first, and yes, “bad” news often hurts, but soon enough, like all knowledge, it’s power—in fact, it’s liberating. When you know where you stand, you can control your own destiny, and what is more fair than that?
    Interestingly, when people raise this criticism with me at speaking engagements, I often ask them a question back. I ask if they ever received grades in school. Naturally, everyone says yes. I then ask, “Did you think getting grades was mean?”
    “Well, no,” they usually say. Sometimes grades sting, but kids somehow always live through it. And grades have a way of making everything pretty clear. Some people graduate and go on to be astronauts or research scientists or college professors, others become marketing managers or advertising executives, and still others become nurses, chefs, or even professional surfers. Grades, in fact, guide us, telling us something about ourselves that we need to know.
    So why should we stop getting grades at age twenty-one? To prevent meanness? Please! *

    Corollary: I’m just too nice to implement 20-70-10.
     

    Usually, people with this complaint about differentiation assert that differentiation, as a managerial system, does not value people who add intangible things to a business, like a “feeling of family” or “humanity” or “a sense of history.” And we all know of organizations that continue to employ underperformers for a long time mainly because they are really nice individuals.
    I fully understand not wanting to manage out somebody nice.
    But the fact is protecting underperformers always backfires. First of all, by not carrying their weight, they make the pie smaller for everyone. That can cause resentment. It’s also not what you could call fair, and an unfair culture never helps a company win; it undermines trust and candor too much.
    The worst thing, though, is how protecting people who