Tag Archives: incentives

Four Deadly Business Myths

Four Deadly Business Myths

GUEST POST from Greg Satell

The unicorn is perhaps unique among myths in that the creature doesn’t appear in the mythology of any culture. The ancient Greeks, for all of their centaurs, hydras and medusae, never had any stories of unicorns, they simply thought that some existed somewhere. Of course, nobody had ever seen one, but they believed others had.

Beliefs are amazing things. We don’t need any evidence or rational basis to believe something to be true. In fact, research has shown that, when confronted with scientific evidence which conflicts with preexisting views, people tend to question the objectivity of the research rather than revisit their beliefs. Also, as Sam Arbesman has explained, our notions of the facts themselves change over time.

George Soros and others have noted that information has a reflexive quality. We can’t possibly verify every proposition, so we tend to take cues from those around us, especially when they are reinforced by authority figures, like consultants and media personalities. Over time, the zeitgeist diverges further from reality and myths evolve into established doctrine.

Myth #1: We Live In A VUCA Business Environment

Today it seems that every business pundit is talking about how we operate in a VUCA (Volatile, Uncertain, Complex and Ambiguous) world. It’s not hard to see the attraction. Conjuring almost apocalyptic images of continuous industrial disruption creates demand for consulting and advisory services. It’s easier to sell aspirin than vitamins.

The data, however, tell a different story. In fact, a report from the OECD found that markets, especially in the United States, have become more concentrated and less competitive, with less churn among industry leaders. The number of young firms have decreased markedly as well, falling from roughly half of the total number of companies in 1982 to one third in 2013.

Today, in part because of lax antitrust enforcement over the past few decades, businesses have become less disruptive, less competitive and less dynamic, while our economy has become less innovative and less productive. The fact that the reality is in such stark contrast to the rhetoric, is more than worrying, it should be a flashing red light.

The truth is that we don’t really disrupt industries anymore. We disrupt people. Economic data shows that for most Americans, real wages have hardly budged since 1964. Income and wealth inequality remain at historic highs. Anxiety and depression, already at epidemic levels, worsened during the Covid-19 pandemic.

The recent great resignation, when people began leaving their jobs in droves, helps tell this story. Should anyone be surprised? We’ve been working longer hours, constantly tethered to the office even as we work remotely, under increasing levels of stress. Yes, things change. They always have and always will. We need to adapt, but all of the VUCA talk is killing us.

Myth #2: Empathy Is Absolution

Another favorite buzzword today is empathy. It is often paired with compassion in the context of creating a more beneficial workplace. That is, of course, a reasonable and worthy objective. As noted above, there’s far too much talk about disruption and uncertainty and not nearly enough about stability and well-being.

Still, the one-dimensional use of empathy is misleading. When seen only through the lens of making others more comfortable, it seems like a “nice to have,” rather than a valuable competency and an important source of competitive advantage. It’s much easier to see the advantage of imposing your will, rather than internalizing the perspectives of others.

One thing I learned living overseas for 15 years is that it is incredibly important to understand how people around you think, especially if you don’t agree with them and, as is sometimes the case, find their point of view morally reprehensible. In fact, learning more about how others think can make you a more effective leader, negotiator and manager.

Empathy is not absolution. You can internalize the ideas of others and still vehemently disagree. There is a reason that Special Forces are trained to understand the cultures in which they will operate and it isn’t because it makes them nicer people. It’s because it makes them more lethal operators.

Learning that not everyone thinks alike is one of life’s most valuable lessons. Yes, coercion is often a viable strategy in the short-term. But to build something that lasts, it’s much better if people do things for their own reasons, even if those reasons are different than yours. To achieve that, you have to understand their motivations.

Myth #3: Diversity Equity And Inclusion Is About Enforcing Rules

In recent years corporate America has pushed to implement policies for diversity, equity and inclusion. The Society for Human Resource Management even offers a diversity toolkit on its website firms can adopt, complete with guidelines, best practices and even form letters.

Many organizations have incorporated diversity awareness training for employees to learn about things like unconscious bias, microaggressions and cultural awareness. There are often strict codes of conduct with serious repercussions for violations. Those who step out of line can be terminated and see their careers derailed.

Unfortunately, these efforts can backfire, especially if diversity efforts rely to heavily on a disciplinary regime. As the philosopher Ludwig Wittgenstein pointed out long ago, strict rules-based approaches are problematic because they inevitably lead to logical contradictions. What starts out as a well-meaning effort can quickly become a capricious workplace dominated by fear.

Cultural competency is much better understood as a set of skills than a set of rules. While the prospect of getting fired for saying the wrong thing can be chilling, who wouldn’t want to be a more effective communicator, able to collaborate more effectively with colleagues who have different viewpoints, skills and perspectives?

To bring about real transformation, you need to attract. You can’t bully or overpower. Promoting inclusion should be about understanding, not intimidation.

Myth #4: People Are Best Motivated Through Carrots And Sticks

One of the things we’ve noticed when we advise organizations on transformation initiatives is that executives tend to default towards incentive structures. They quickly conjure up a Rube Goldberg-like system of bonuses and penalties designed to incentivize people to exhibit the desired behaviors. This is almost always a mistake.

If you feel the need to bribe and bully people to get what you want, you are signaling from the outset that there is something undesirable about what you’re asking for. In fact, we’ve known for decades that financial incentives often prove to be problematic.

Instead of trying to get people to do what you want, you’re much better off identifying people who want what you want and empowering them to succeed. As they prosper, they can bring others in who can attract others still. That’s how you build a movement that people feel a sense of ownership of, rather than mandate that they feel subjugated by.

The trick is that you always want to start with a majority, even if it’s three people in a room of five. The biggest influence on what we do and think is what the people around us do and think. That’s why it’s always easy to expand a majority out, but as soon as you are in the minority, you will feel immediate pushback.

We need to stop trying to engineer behavior, as if humans are assemblages of buttons and levers that we push and pull to get the results we want. Effective leaders are more like gardeners, nurturing, growing and shaping the ecosystems in which they operate, uniting others with a sense of shared identity and shared purpose.

— Article courtesy of the Digital Tonto blog
— Image credits: Unsplash

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Rewarding Innovation With Incentives That Work

Rewarding Innovation With Incentives That Work

GUEST POST from Chateau G Pato

In today’s fast-paced world, fostering a culture of innovation is critical for organizations aspiring to disrupt markets and outperform competitors. But how do we spark that innovative spirit? The secret often lies in well-crafted incentive programs that motivate individuals and teams to push boundaries and explore uncharted territories.

Why Incentives Matter

Effective incentive programs align organizational goals with individual aspirations, creating a symbiotic relationship that fuels innovation. When employees believe that their efforts will be recognized and rewarded, they’re more likely to take calculated risks and unleash their creative potential. However, crafting the right incentives can be a challenging task.

Key Principles of Effective Incentive Programs

  • Clear Criteria: Ensure that the criteria for receiving incentives are clear and transparent.
  • Aligned Objectives: Align incentives with organizational goals and values to reinforce desired behaviors.
  • Scalable Recognition: Develop a system that recognizes contributions of varying scope, from small improvements to groundbreaking innovations.
  • Continuous Feedback: Maintain open lines of communication to provide feedback and acknowledge efforts promptly.

Case Studies: Incentives in Action

Case Study 1: Procter & Gamble’s Connect + Develop Program

Procter & Gamble (P&G) embraced open innovation through its “Connect + Develop” program, encouraging external collaboration to bring fresh perspectives into their innovation process. By partnering with outside experts and organizations, P&G developed products faster and more efficiently. The program incentivized innovation by making the integration of external insights and solutions a core part of its strategy, effectively increasing the number of innovative products brought to market.

This approach not only expanded the company’s innovation potential but also placed a premium on collaboration and shared success. By rewarding successful partnerships and collaborations, P&G reinforced the importance of diverse inputs in driving innovation and positioned itself as a leader in adaptive and inclusive innovation strategies.

Case Study 2: 3M’s Dual Ladder

3M, a pioneer in innovation, implemented a “Dual Career Ladder” program to reward technical and creative innovation without necessitating a move into management. This provided scientists, engineers, and other hands-on employees with an opportunity to achieve compensation and recognition equivalent to their managerial counterparts, based on their innovative contributions rather than people management skills.

This approach acknowledges that great ideas are often developed by those best at doing, not necessarily managing. 3M’s system has been instrumental in developing numerous cutting-edge products, including the famous Post-it Note, by ensuring innovators remain in roles that utilize their strengths, thus keeping their focus on developing pioneering solutions.

Designing Effective Innovation Incentives

While these case studies demonstrate a range of successful incentives, the underlying principle is that innovation thrives in environments that support and recognize creative achievements. Key factors include:

  • Autonomy: Give employees the freedom to experiment and pursue projects they are passionate about.
  • Recognition: Acknowledge both individual and team contributions publicly to enhance motivation.
  • Growth Opportunities: Offer paths like 3M’s Dual Ladder to reward technical expertise as much as managerial prowess.
  • Resource Accessibility: Provide necessary resources and time for employees to develop and test disruptive ideas.

Ultimately, choosing the right combination of incentives is crucial and involves a deep understanding of what truly drives your team’s innovative spirit. By aligning these incentives with organizational goals and employee motivations, companies can create a thriving environment where innovation is cultivated and rewarded.

Looking Forward: Designing a Next-Generation Incentive Program

As we advance into an era of even greater technological change, organizations must continuously iterate on their incentive structures to stay ahead. Consider incorporating flexible and personalized incentives that cater to diverse employee preferences and leverage technology to track contributions and reward innovations effectively.

The best incentive programs are those that not only drive innovation but also inspire a sense of purpose and commitment within employees. By understanding the unique motivators of your workforce and designing incentives that resonate, you can unlock the full innovative potential of your organization.

SPECIAL BONUS: The very best change planners use a visual, collaborative approach to create their deliverables. A methodology and tools like those in Change Planning Toolkit™ can empower anyone to become great change planners themselves.

Image credit: Pixabay

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