All you need to know about incentives…

Someone recently asked me to give them a general overview of incentives. Never-mind the cliff-notes request format, we simply over-complicate this stuff.

Understanding incentive compensation is simple, and is largely human nature:

1. That which is rewarded is repeated,

2. You don’t get what you want, hope for, manage to, or request — you get what you pay for (as a tenet of compensation, not necessarily a life philosophy), and

3. Simplicity wins.

Exception, contrarian arguments like you mention are just that, and based more on opinion than empirical evidence.

Well crafted incentive schemes will generally work when we can show that:

1. Working harder (bigger, better, stronger, faster) will improve my job performance, and

2. My improved performance will create rewards, perhaps an increase in salary or valued benefits, and

3. I value these rewards.

(oft-paraphrased from Vroom, though not sure his was original)

Again, simplicity wins…

Leadership Laws: #4

In this and the final remaining blog entry, I’m expanding on the “5 Irrefutable Laws of Leadership” I outlined in a recent article.

The fourth law should be unnecessary — make your expectations — as a manager and leader — clear. And that’s “clear” as in crystal, not mud.

Law #4. Make your expectations clear, then back up a bit and give employees room to do their job. That doesn’t mean “never look back;” to inspect what you expect isn’t micro-management, it’s just good-management.

Employees – even top performers – need clear expectations. In fact, especially top performers. Give ‘em a target, provide resources and guidance, remove obstacles when necessary, then let them do their job.

Check back later, since you still have the real management responsibilities and accountability. Hate to quote Ziglar again, but there’s a lot of truth in remembering to inspect what you expect.

Tell your staff what you expect — in clear language; inspect the results of their efforts toward those expectations, then hold them accountable for that performance.

Let’s keep this simple — it doesn’t have to be difficult.

Change, change, change…

As always, “The times, they are a’changin’”

In my upcoming At C-Level, I make mention of a survey I recently completed, in which many of you participated. The full results should be available shortly, but I did want to give you a sneak preview.

From a long-range perspective, with only senior executives (more than 20% were CEO/COOs) participating, here are the top 3 issues you identified:

1. Finding, hiring, developing and retaining talent,

2. Organizational changes, outsourcing, merger/acquisition assimilation, and

3. Compliance, poilitical change, legislation.

We’ve got work to do. Changing our focus to these initiatives — on a long-term basis — takes proactive thought and some simple change management methodologies. Change is simple; just close your eyes, hold your breath, and wait. It happens. Effective change management, on the other hand, takes some skill. From my view of the world, 3 things are necessary for senior executives to successfully drive positive change:

1. Belief and commitment. You gotta believe — really believe — that what you are doing is right and appropriate, using a variety of litmus tests. Mid-management and line employees will quickly detect if your commitment is anything but resolute. Change management isn’t for the weak at heart, so strap in, point the way, and hold the course (I always wanted to use that line).

2. Provide direction. Even if people can believe in your resolve, and even if they understand the basic need, they need real direction, from YOU, to know where to head. Don’t expect overnight adjustment and buy-in to your newfound commitment for change; until that real buy-in occurs, they need a really good map — a compass is probably a better word — to help them start off in the right direction.

3. Unqualified support for the cause. Pay attention here, this one’s really, really important. Not only can you not afford to lose your focus (see “commitment” above), but you must insist others join in the quest. You must insist. Help them work through their issues, convince — as best as possible — for the need to change. At the end, though, the change must occur, and you must be prepared to make all those decisions necessary, some good, some tough, to make it happen. Naysayers can be a fatal distraction. Disbelievers can poison an effective team. Misdirected managers can ruin the entire effort. Make sure you stay aware, and be prepared to do whatever is necessary to ensure the focus is maintained by all.

2007 is upon us; we have work to do, and some unique challenges facing us.

Let’s charge that hill…

Happy New Year…!

I’m just sayin’…

First, that phrase for this post — “I’m just sayin’,” drives me nuts. I hate it. Now that I feel better for sharing…

A diversity consulting firm called The Novations Group, apparently surveyed a couple thousand managers, and concluded that senior managers were poor communicators. For this, they seem to want acclaim…

Survey respondents blamed senior management for (in order of survey popularity):

1. Relying too much on e-mail.

2. Assuming a single message is enough.

3. Having no feedback loop in place.

4. Messages lacking clarity.

To this, I say “hmmmm…”

Nonetheless, there is some truth here.

We all rely too much on email. Email is great for simple information/data sharing. It breaks down when we try to have conversations, include emotion, or the worst: we try to manage by email.

Walk down the hall or pick up the damned phone. Email is the worst medium on the planet for any communication requiring acknowledged understanding, purposeful dialog, or meaning other than the simple written word. There is no defined ‘subtlety’ in emails. And managers shouldn’t use it as a proxy.

Another pox on communication occurred while we were gutting mid-management from organizations. In flattening org charts, we forgot that most on-the-ground communications with employees was done with middle managers. Today, they are either extinct or a bit harried from the evolution of their jobs.

Further, much of what we as senior leaders do has at least a modicum of confidentiality. Next thing you know, we’re acting like everything we say and do is some state secret.

It ain’t.

The problem, of course, is in the absence of communication, our employees fill in all the details, blanks, and relevant information themselves. From spotty knowledge, connecting rumor dots, or simply making it up as they go. None bodes well for us while trying to lead an organization in this age.

Next week, I’ll post some tips and techniques for communications that, though maybe not necessarily “easy,” they probably won’t leave visible scars.

Until then,

Leadership Laws: #3

In this and 2 remaining blog entries, I’m expanding on the “5 Irrefutable Laws of Leadership” I outlined in a recent article.

This third law is a reminder that development is essential for employee growth, and for your own well-being. In other words, it’s both selfish and generous; making someone else smarter while you do less work. This is a good thing, eh?

Law #3. If you always answer employee’s every question, you’ll forever be answering employees’ every question.

Questions are teaching moments — don’t rob employees of the opportunity.

Sounds trite, and I don’t mean it to (ok, maybe I mean it to be a little trite). If an employee is asking because they’re stupid, get rid of the employee. If they are a decent employee asking because they do not know, then teach them.

Next time, they’ll know how to do it — or at least the thought process behind it — and you won’t have to. How’s that for planned efficiency??

Now, you have time to go do something important. And to answer in advance: No, answering every employee’s every question is not something important you should be doing. If you’re doing that, you may as well just do it yourself…

Now that sounds fun, eh?

Let’s Benchmark!

I have a better idea… Let’s not.

Personally, I think “benchmarking,” much like its sister phrase, “best practices,” means “waste of time.” Time better spent analyzing and improving your internal processes.

Benchmarking is supposed to mean looking inside other organizations, and comparing their results, methodology and metrics of a practice or process with your own. Supposedly, this has some meaning to us, and we can use that to adjust and improve our own processes and practices.

Therein lies the problem — our processes and practices, not theirs. We cannot simply reach into another organization — similar in scope or not — and extricate several of their unique processes to overlay on our organization. Taken so out of context, we may actually do much more harm than good.

One size doesn’t fit all, what works for you may not for me, templates are useless… pick a phrase, they all apply. Studying another’s process to determine if there are pieces of it that you can use, within your own, well-defined structure and practice, may indeed have some value. Benchmarking entire processes, practices, and methodologies does not.

Sure, compare all you like. But take the results of that comparison and ask why there is a variance. There are so many variables within organziations — people, structure, geographic, cultural, you name it… a firm can have “better” metrics than you, but not necessarily execute that particular process nearly as well.

Don’t benchmark… analyze and improve.

But, that’s just me…

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