Showing posts with label incentives. Show all posts
Showing posts with label incentives. Show all posts

Wednesday, May 24, 2023

multiple, simultaneous efforts


Most prescriptions for organizational change have focused on how to launch a single change initiative. This made sense in a stable world in which undertakings were planned and executed gradually and sequentially — like controllers directing airplanes taking off on a single runway, one at a time and well distanced from one another. However, the challenges of coping with dynamic markets, global crises, and advancing technologies are forcing organizations to transform quickly, which can require multiple, simultaneous efforts on several fronts. When time-pressured controllers launch many airplanes in close succession, the risk of collision increases significantly. Yet change managers have a very limited understanding of how such “collisions” happen or how to reduce those risks.

Failure to manage interrelationships between change initiatives can generate poor overall performance in three ways. First, it can lead to a large number of seemingly discrete initiatives with unclear prioritization and insufficient resources allocated for implementation. Second, it creates misaligned incentives for managers whose concern for their own key performance indicators inhibits cooperation across departmental siloes, when cooperation could better generate the desired benefits. Third, it prevents managers from perceiving connections between their own initiatives and those occurring elsewhere in the organization, creating unexpected conflicts about resource allocation or the timing of implementation. These conflicts undermine each change initiative and decrease overall corporate performance.


Quy Nguyen Huy, Rouven Kanitz, Julia Backmann, and Martin Hoegl

"How to Reduce the Risk of Colliding Change Initiatives," MITSloan Management Review. June 3, 2021

Thursday, November 3, 2022

see what they can do


Once a year, all Navy ships undergo a thorough assessment, in which outside inspectors validate the ship's readiness. The ship as a whole and the crew's abilities and proficiencies are rated in twenty-four categories, on a scale ranging from basic Level One to advanced Level Four. 

The purpose is to determine who much additional training the crew needs to be ready for combat. But if you assume that the higher a ship's level, the less time it would spend training at sea, you would be wrong. In fact, regardless of its readiness rating, every ship spends the next six months training at sea. 

Thus there was no incentive to reach Level Four, and in fact, no ship ever did. Level One was the required minimum, and that was usually considered good enough. 

Then Benfold came along.

Originally, my goal was to reach an overall rating of Level Two, but when I recognized the enormous potential of my crew, I raised the bar to Level Three, much to the chagrin of those who saw it as a quantum leap in their labor and my hubris. 

I must also admit that, in addition to my noble motive of making the ship as good as it could be, I wanted to blow my archrival out of the water. Their assessment was scheduled to begin the basic Level One. The CO had no idea that we were laying the groundwork to shake things up a little. In fact, we were about to rock his world.

Our first challenge was finding enough senior people to supervise the twenty-four areas of testing. My combat systems officer hit me with the unexpected news that we had only twenty qualified people who were not involved in other critical operations. 

Thinking fast, I said, "Fine - pick supervisors from the next group down. You don't always need a senior person in charge. It could be a young, third-class petty officer."

"That's never been done before," he said.

"See what they can do," I said. "The alternative is to do nothing, right? Let's assign senior people to the most demanding areas and work our way down to the junior ones. If we don't get Level Three in some categories, so what? We will get Level One or Two. We have nothing to lose."

As it turns out, the third- and second-class petty officers were so honored to be chosen that they worked hard enough for several of their teams to outshine those supervised by senior people. The search-and-seizure team was particularly impressive. We assigned it to one of the ship's most junior sailors because we suspected he had the ability to honcho it. The outside inspectors protested, saying they could not validate the work of an important team that wasn't headed by a commissioned officer. But I insisted, and the young sailor did such a fantastic job that the inspectors ate their words and placed us at Level Four in that category.

Breaking out of our stratified systems to trust the people who work for us, especially those at or near the low end of the hierarchy, was a useful, progressive change. It let us unleash people with talent and let them rise to levels that no one had expected, simply by challenging them: Make Benfold the readiest ship afloat. In that context, how could we not have done well?



D. Michael Abrashoff

It's Your Ship: Management Techniques from the Best Damn Ship in the Navy by D. Michael Abrashoff. Grand Central Publishing. 2007. p.146-148

Wednesday, September 28, 2022

share profits


The larger truth that I failed to see turned out to be another of those paradoxes - like the discounters' principle of the less you charge, the more you'll earn. And here it is: the more you share profits with your associates - whether it's in salaries or incentives or bonuses or stock discounts - the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit in this business lies, not in trying to goad strangers into your stores for one-time purchases based on splashy sales or expensive advertising. Satisfied, loyal, repeat customers are at the heart of Wal-Mart's spectacular profit margins, and those customers are loyal to us because our associates treat them better than salespeople in other stores doe. So, in the whole Wal-Mart scheme of things, the most important contact ever made is between the associate in the store and the customer. 



Sam Walton

Sam Walton, Made in America by Sam Walton & John Huey. Bantam Books. 1992. p. 128