Since this is a blog about sales management, you may (quite reasonably) assume that the title refers to a very well-known acronym:

But actually, this ABC is more about school-grades than acronyms.

Jack Welch is pretty universally recognized as one of the greatest managers of our time. Unfortunately, one of his most frequently quoted maxims is generally taken out of context, and when that’s done it can lead to horrible management decisions. He’s often quoted as saying something along the lines of, “stack rank your entire staff every year, and fire the bottom 10%”. The problem with this (aside from the fact that it misses his whole point), is that it’s terrible management. In fact, it’s not really a management maxim at all.

Jack actually did say to fire the bottom 10%, but other two parts are just as, if not more, important: compensate the hell out of your top 20%, and spend all of your time with the middle 70%.

Now that’s actual management advice. But even it is a little too simplistic. So, assuming you like this general idea, what should you really do?

First things first, develop some criteria. If you’re going to engage in stack-ranking, you need to be consistent about it, or it defeats the entire purpose. Determine exactly what it means to be A, B, or C player.  Once you have the criteria defined, and your team ranked, you can start to manage them effectively. Second, don’t do this just at review time. While you might be able to argue that your bottom 10% probably know they’re in the bottom 10%, you really don’t want to walk in there and fire them without having given them a specific chance to get better.

A) These guys are your rock stars (or your super stars, if your whole team is already rock stars). Do what Jack suggests. Compensate the hell out of them, and get out of their way. You should spend very little time with these guys. They’re already killing it.

B) This really is where you need to be spending your time. These are the team members that, with some mentoring, coaching, and advice, can really pull your whole team up to the next level. They’re the ones that are your future A-team, or that have the best chance of moving up and becoming a capable manager (don’t promote your A-team).

C) Let these guys know at the beginning of the year that they’re on the C team, and give them specific achievements they must meet in order to get out of this group. Aside from checking back on them once a quarter to see how they’re progressing, however, you really don’t want to spend your time here. It’s not that they’re hopeless or can’t improve; it’s about the best way to leverage your valuable (and short) time. If you spend your time here, you’re not going to get the results that you want. Hope that some of them move up from C to B, but at the end of the year (or six months, or the quarter … whatever you decide), it really is time to let go those who don’t. Wish them the best, and move along.

ABC, baby!