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The 70/20/10 Rule Explained by Professor Robert Fletcher
 

What does it take to build a wildly successful business?
Is it the product? The marketing? The leadership?
Sure—those are all part of the formula.

But here’s a truth many leaders avoid:

Success is built—or broken—by the people you hire… and the people you fire.

Jack Welch, legendary CEO of General Electric, knew this better than anyone.
During his 20-year run, he turned GE into one of the most valuable companies on the planet—not just by innovating, but by shaping a team culture built on performance, accountability, and reward.

 

Welch’s controversial but effective philosophy was clear: Reward the top 20%. Coach the middle 70%. And fire the bottom 10%.
Some call it harsh. Others call it brilliant. But here’s what matters: It worked.

 

Let’s take a deeper look at how this approach can transform a company from average to exceptional—and why hiring and firing are not just administrative tasks, but strategic tools for growth.

 

Think about Hiring for Greatness

 

It all starts with hiring. Too many companies hire to fill a seat. Jack Welch believed you hire to fuel momentum.
You don’t want warm bodies—you want driven, self-motivated people who bring energy, ideas, and ownership to their roles.

 

That means hiring slowly and with intention. Ask not just, “Can they do the job?” Ask: “Do they raise the standard?” “Do they make everyone else better?” “Do they believe that winning is a team effort?”

 

When you fill your company with A-players, you start to notice a shift. Meetings get sharper. Deadlines get hit. Energy goes up. Culture becomes contagious.

 

And here’s the key: when you bring in great people, great people attract other great people. It creates a virtuous cycle—a talent magnet that draws in excellence.

 

Rewarding the Best

 

Now, let’s talk about what happens after the hire. Jack Welch believed in recognizing and incentivizing the top 20% of performers.
Not with meaningless plaques or generic praise, but with real, tangible rewards.

 

Bonuses. Promotions. Equity. Influence.

When someone drives results, moves the mission forward, and makes others better, you show it. This isn’t favoritism. It’s fuel. Because when your top performers are celebrated, everyone else sees the target.

Performance becomes visible. Success becomes repeatable. This is how you build a company where people don’t just show up—they step up.

 

Coaching the Middle

 

Not everyone is at the top. The majority of your workforce will fall into that middle 70%, good, reliable contributors who may need direction, skill-building, or clearer expectations. Welch didn’t ignore them. He coached them.

That’s where the real art of leadership comes in—developing your people, not just managing people. You invest in their growth. You give feedback. You show them the gap between where they are and where they could be.

And the best part? Many of them will rise. Not everyone becomes a superstar, but many become solid, valuable pillars of the business—because you took the time to build them up, not burn them out.

 

Then there’s the tough part—the bottom 10%.  Letting Go of the Bottom.   The low performers.That's where the toxic energy lives.  The “just getting by” attitudes.

 

Welch’s policy? Be honest. Be humane. But be decisive.
If someone isn’t pulling their weight after coaching, it’s time to let them go. Why? Because keeping low performers drags down your team. It tells your top performers that mediocrity is tolerated. And in the long run, it’s a cost you can’t afford.

 

Firing isn’t about cruelty. It’s about clarity. You’re creating space for better talent, better culture, better results.

 

Everyone Shares in the Success 

 

Now here’s where this model really shines: When your hiring is intentional, your top performers are rewarded, your middle is coached, and your underperformers are respectfully moved on—you create a company of owners. You create a culture where everyone knows:

 

Results matter. Excellence is noticed. Growth is possible. And success is shared.

 

That’s the kind of culture where people don’t just work for a paycheck—they work for a purpose. They take pride in the company’s wins, because those wins feel personal.

 

Whether it's profit sharing, stock options, or performance-based bonuses, when people have a stake in the outcome, their effort follows. They don’t need to be micromanaged. They manage themselves.

 

Conclusion: Build With Boldness

 

So if you want to build a business that thrives—not just survives—learn from Jack Welch. Be bold about who you hire. Be intentional about who you promote. Be courageous enough to let go of what doesn’t work.

And most of all, build a culture where every person is empowered to rise—and expected to contribute.

Because business isn’t a family. It’s a team!

And the best teams don’t tolerate passengers. They build with players who want to win, and help everyone else do the same. So hire well. Fire when you must. And build something worth believing in.