Jack Welch’s “Rank and Yank” system—forcing managers to fire the bottom 10% annually—became gospel in the 90s and early 2000s. Dozens of Fortune 500 companies adopted it. Microsoft rode it for a decade. GE swore by it. Here’s what it actually delivered: backstabbing, mediocrity, and billions in lost value.

The Core Stupidity

Stack ranking forces a normal distribution on performance, assuming 20% of your people are always top tier, 70% are adequate, and 10% need to go—every single year, without exception.

The problem is obvious once you say it out loud: this assumes you hired wrong 100% of the time. If your bottom 10% are genuinely underperforming, that’s a recruiting failure, not a management strategy. You’ve built a system that punishes your hiring process while pretending it’s optimizing performance.

What It Actually Killed

• Collaboration Helping a colleague makes them look better than you. Information hoarding becomes survival. Team projects turn into zero-sum games where your win requires someone else’s loss.
• Risk-Taking Innovation requires failure. Failure puts you in the bottom 10%. The rational move: play it safe, hit your numbers, go home. Moonshots die before they start.
• Long-Term Thinking Why invest in 18-month projects when you need quarterly wins to survive? Short-term metrics become the only metrics that matter. Strategic initiatives die in committee.
• Talent Retention Top performers leave because collaboration is dead. Middle performers leave before they’re ranked out. You’re left with politicians who know how to game the system.

The Microsoft Autopsy

Microsoft used stack ranking from 2000-2013. Those were their lost years: Windows Vista, Windows Phone collapse, missed mobile entirely, watched Google and Apple eat their lunch.

Vanity Fair’s 2012 investigation quoted dozens of employees describing engineers avoiding each other’s projects, teams split into competing factions, managers spending more time on performance documentation than product development.

Microsoft killed it in 2013. Revenue growth immediately accelerated.

The Deeper Problem

Welch’s philosophy treated humans as interchangeable manufacturing inputs. Fire the bottom, hire new ones, repeat. It worked—briefly—in mature, stable industries with commoditized products and assembly-line processes.

It’s catastrophic for knowledge work, where context matters more than raw talent, team dynamics compound or destroy productivity, institutional knowledge has genuine value, and innovation comes from psychological safety, not fear.

The Ghost That Lingers

Stack ranking is mostly dead now, but its influence remains embedded in corporate DNA: forced distribution curves on performance reviews, “development plans” that are really documentation for termination, metrics-obsessed cultures that optimize locally and destroy globally.

The irony is thick enough to cut: companies adopted it to improve performance. Instead, they systematically dismantled the conditions that enable high performance.