Accenture Ends Annual Review (and Admits Earth Orbits the Sun)

Recently I read an article from the Washington Post titled “In big move, Accenture will get rid of annual performance reviews and rankings” which was in a section called “On Leadership”. I like my headline better (though it has probably blown any shot I had to work at Accenture).

To classify this as somehow a bold or “big move”, place it in a section titled “On Leadership” only highlights the complete lack of scientific understanding of what actually works and does not work. This is not leadership, but a damning indictment of the lack of leadership in the workplace. The real issue is this is “big news” and it takes companies so long to not only admit the obvious, but to act on overwhelming scientific evidence suggests some of their unquestioned practices are utterly wrongheaded.

orbitIn the case of annual reviews we have such a wealth of evidence they do not work it is amazing so few companies have actually done away with them. Daniel Pink, in his book Drive, states

...performance reviews are rarely authentic conversations. More often, they are the West’s form of kabuki theatre – highly stylised rituals in which people recite predictable lines in a formulaic way and hope the experience ends very quickly.

Pink’s book has been out for six years now, but it is based on scores of science that was conducted years and decades prior to its publication. We don’t need to look farther than W. Edward Deming, who wrote way back in 1986, in his seminal book “Out of the Crisis”, that annual reviews are “Deadly Disease #3” and

The performance appraisal nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics… it leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in.

whyWhat amazes me most about this annual “kabuki theatre” is everyone intimately involved with the system (managers and front-line employees) literally hates this process. Even if the people at the top of the company bury their heads in the sand when it comes to real, scientific evidence, how can they fail to acknowledge the tidal wave of anecdotal evidence from their own people?

Steve Jobs was once asked how he learned to run a company in his early 20s since he had no formal business training. His answer sheds a great deal of light on why only 6% of fortune 500 companies have gotten rid of annual reviews and rankings though the evidence is overwhelming that they do not work.

You know, throughout the years in business I found something, which was I’d always ask why you do things. And the answers you invariably get are, “Oh, that’s just the way it’s done.” Nobody knows why they do what they do. Nobody thinks about things very deeply in business. – Steve Jobs – The Lost Interview

So, if Jobs was right, as I believe him to be, then a plausible explanation would be that even highly compensated CEOs are unable to properly ask the “why” of things or perhaps top-down control has led to a culture where why is not asked out of fear or complacency. I would guess the CEO of Accenture, since he is quoted in the article, was the decision maker of the “big move.” While he might think himself progressive since he is on the vanguard with respect to his peers, the more appropriate “why” to ask would be “why did it take so long?” and “why haven’t others made the change?” or maybe “which CEO will be next to admit that the world is indeed round?”

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  1. […] a recent blog post I wrote a tongue-in-cheek title, “Accenture Ends Annual Review (and Admits Earth Orbits the Sun)”. Of all my dozens of blogs (I have posted over 100 over the years), this was perhaps the most […]

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