The Broken Windows Theory Applies to Business

This Economist article on the Broken Windows Theory has been making its rounds on the blogosphere. The theory goes that the small things, left unchecked, lead the way for more serious problems. In criminology, an example is not dealing with graffiti and minor infractions giving way to people committing more serious crimes. In business, an example is not dealing with little headaches or friction that impede doing a better job leading to more complacency. I’m fan of asking the “five whys” and drilling down into the core issue. 

What are some “broken windows” in your business?

Jack Welch on the Four Types of Employees

My younger brother is a first year student at Harvard Business School and was recently discussing a case in class on Jack Welch’s management style. After 35 minutes of discussing the case, the professor surprised the class by having Jack Welch come in personally and answer questions. The key message by Welch was that of the four types of employees and what you should do with them:

  • High performer that buys into the corporate culture — promote and empower them as much as possible
  • Low performer that doesn’t buy into the corporate culture — fire them as quickly as possible
  • Low performer that buys into the corporate culture — give them a second chance in a different position to see if they can be an ‘A’ player
  • High performer that doesn’t buy into the corporate culture — do a public hanging where you fire them and then discuss with other managers their short comings
Of course, the last two types are the ones that provide the most difficulty for companies. I thought it was an interesting perspective from a very decorated business person.