How a grid built to judge whole businesses ended up judging people — and why so many managers now argue about it.
All the tools · The Eisenhower Matrix →
Ten items. Say your answer out loud before you reveal it.
Read the sentence, guess the meaning of the word in bold, then reveal.
The three words are: candid · bias · pigeonhole. Read each meaning, say the word, then reveal.
One missing word fits every phrase in the group. Say it, then reveal.
Read each part. After it, answer the quick check from memory, then discuss one question.
By the late 1960s, General Electric was one of the biggest companies in the world. It made almost everything: light bulbs, fridges, televisions, jet engines, even nuclear power stations. Every year it sold more. But there was a problem that worried its chief executive, Fred Borch. Sales were growing much faster than profits. People inside the company had a name for it: profitless growth.
The trouble was that GE's portfolio had become too big for anyone to understand. Every division asked for money, and every division had a good story. How could the leaders in New York compare a factory making toasters with a team building computers?
In 1969 Borch asked the consulting firm McKinsey for help. Together they reorganised GE into “strategic business units” and built a simple tool to judge them. Each unit was scored on two questions: How attractive is this market? and How strong are we in it? Each answer was low, medium or high — and three times three makes nine boxes.
1. What was “profitless growth”?
2. Why was it hard for GE's leaders to decide where to put their money?
3. What two questions did the grid ask about each business?
1. Sales were rising, but profits were not rising nearly as fast.
2. The company made so many different things that the divisions were almost impossible to compare — and every one had a good reason to ask for money.
3. How attractive is the market, and how strong is GE in that market?
The grid became known as the GE–McKinsey matrix, and it worked like a traffic light. Businesses in the three top-right boxes were coloured green: invest and grow. The three boxes along the middle diagonal were yellow: hold steady. The bottom-left boxes were red: take the cash, or divest. In the 1970s and 1980s, GE sold dozens of businesses and poured money into the strongest ones.
Then somebody noticed that the same shape could be used for something very different: people. A company is a portfolio of businesses — but it is also a portfolio of employees. Instead of market attractiveness and business strength, HR teams asked two new questions: How well does this person perform now? and How much potential do they have?
Nobody is completely sure who first drew the people version. But GE became famous for its annual talent reviews, especially under Jack Welch, its chief executive from 1981 to 2001, who was candid — some said brutal — about ranking staff. By the 1990s and 2000s, the “nine-box” had spread to large companies all over the world.
1. What did a red box mean for a GE business?
2. What were the two new questions when the grid was used for people?
3. Do we know exactly who invented the people version?
1. Take the cash from it, or sell it (divest).
2. How well does the person perform now, and how much potential do they have for the future?
3. No — its exact origin is unclear, but GE's talent reviews helped make it famous.
Today, in thousands of companies, managers meet once or twice a year for a talent review. Each employee's name goes on a sticky note or a screen, and the managers argue about which box it belongs in. The top-right box — high performance, high potential — holds the future leaders. They get training, big projects and a place on the list of possible successors. The bottom-left box holds people who are underperforming and may be asked to leave.
Supporters say the grid forces managers to be honest and to talk about people they might otherwise ignore. It can reveal a quiet employee who is far more talented than anyone had noticed.
Critics see a darker side. “Performance” can be measured, but “potential” is only a guess — and guesses are where bias hides. Managers may see potential in people who look and sound like themselves. And the labels stick: someone pigeonholed as “low potential” at 30 may never get the chance to prove otherwise. Some companies have stopped using the grid; many still rely on it. The nine boxes are simple. The people inside them are not.
1. What happens to people in the top-right box?
2. What is one advantage of the grid, according to its supporters?
3. Why do critics say that “potential” is a problem?
1. They are treated as future leaders: they get training, big projects and are considered as possible successors.
2. It forces managers to be honest and to discuss everyone — so a quiet but talented person can be noticed.
3. Potential can't really be measured; it is a guess, and guesses can be affected by bias.
The grid has two axes. Along the bottom: performance — how well someone is doing the job now. Up the side: potential — how far they could grow in the future. Each axis has three levels, so every person lands in one of nine boxes. The labels vary between companies; these are typical.
Read each description. Which box of the grid does the person belong in? Choose, then check.
1. Star — high performance now and high potential.
2. Rough diamond — low performance so far, but high potential.
3. Trusted professional — high performance, low potential for a bigger role — valuable, but not a future leader.
4. Talent risk — low performance and low potential.
5. Future star — medium performance, high potential.
6. Core player — medium performance and medium potential — the middle box.
Potential is a guess. Performance can be measured; potential can't. When people guess, bias creeps in — and the grid can make a guess look like a fact.
Boxes become labels. A person placed in a low box may get fewer chances, and so never show what they could do.
It's a snapshot. Someone struggling after a difficult year may look like a “risk” when they simply need time.
A grid is all about comparison — this person is stronger than that one, this business is less attractive. At B2, the skill is to say how much stronger or weaker. The words before the comparative do that work.
Write one word in each gap. The clue in brackets tells you the size of the difference.
1. Ana's sales were higher than anyone else's — nearly double. (big difference)
2. Tom's results were lower than last year: 49% instead of 50%. (small difference)
3. The new manager is not as experienced as the old one — she has two years, he had twenty. (big gap)
4. The you practise, the more confident you become.
5. This year's team is bit stronger than last year's.
1. far / much (also: considerably)
2. slightly / marginally
3. nearly
4. more
5. a
Each sentence has one mistake. Say the correct sentence, then write the correction.
1. Her English is very better than it was last year. →
2. The second candidate was more strong in the interview. →
3. The earlier we start, the more it is easy. →
4. Our old office wasn't quite as bright than this one. →
1. much better (not very better)
2. stronger (not more strong)
3. the easier it is
4. as bright as this one
Now compare two people you know well — a friend, a colleague, a family member — using one big-difference phrase and one small-difference phrase.
Use the grid on your own world. Choose a task, start the timer, and talk. Use the comparison language from the grammar tab.
Where would you put yourself on the grid today — and where would you like to be in two years? What would move you?
You must rate someone's potential. What evidence would you want before deciding? What would you ignore?
The grid could sort football players, students or musicians. Choose one group you know and explain how it would work.