by Charles Plant | Jan 22, 2015 | Uncategorized
I was looking at a performance plan and bonus scheme for someone today and noticed a rather problematic hurdle. That’s one of those statements that says you get a $10,000 or whatever bonus if revenue exceeds $1 million. These weren’t the numbers but I blanched at the amounts as the bonus was large and the hurdle was high. It was so high, it was almost a cliff.
I’ve worked with people before, who when they realize they don’t have any chance of meeting their bonus, sandbag sales in order to shift them into the next year. The same thing happens with ceilings. In the old days IBM had a rule that no one could earn more that the President. That stopped more than one sales rep from selling late in the year.
The problem is, what do you do about performance hurdles and ceilings? I think ceilings are stupid. You can get burned one year without a ceiling but you can change the comp plan the next year so the expected revenue is more in line with reality.
But hurdles are another matter. How do you set a minimum standard without a hurdle. I don’t think there is any way to deal with them except through one of my favourite tools, trailing 12 month averaging. Paying every quarter or even monthly based on the last twelve months results doesn’t penalize or benefit anyone for sandbagging and you can adjust the hurdle rate to make it more realistic on a regular basis.
I know one company that pays bonuses based on weekly results. You can have an off week and it won’t affect the rest of your month. It also means that you can’t slack off for very long as you’re being measured all the time. They have hurdles and they work when measured weekly.
Complex to administer, maybe but it gets rid of quarter and year end stuffing which inevitably leads to operating issues and it keeps people on their toes all the time.
by Charles Plant | Nov 14, 2014 | Emotional Intelligence
I think I lost the plot for the last three months and after one of the busiest periods of my life, am finally getting back to having time to think. This got me wondering about the definition of success. It is one of those concepts that plague people and society has developed an elevated level of anxiety about success.
Am I successful because I’m busy, because I’m making money? Because I’m happy? Don’t look at me for an answer as I frequently grapple with the same question. Particularly so as I walk through my own neighbourhood, past $5 million houses that seem to capture today’s definition of success. (The one that amuses me most is the house where the owner bought the house next door and tore it down so that he could have a slightly bigger garage.)
Someone who has grappled successfully with the concept is Alain de Botton. I thought for a treat today, you might enjoy his TED Talk on the subject.
Alain de Botton
by Charles Plant | Aug 22, 2014 | Uncategorized
13 Steps to better Strategy Execution
I’m teaching a course at U of T in Continuing Studies in the fall called Connecting Strategy with Action. It’s all about driving superlative results through better strategy execution. The most remarkable outcome of students who take it is how they end up shifting their whole management focus from activities to results.
In the course we talk about employees three greatest needs:
- To know exactly what is expected of them.
- To know how they’re doing.
- To understand how they can improve.
I prepared this document as an outline of the course and thought I should share it here as well.
13 Steps to Better Strategy Execution
by Charles Plant | Aug 21, 2014 | Leadership Development
Daniel Levitin has written an interesting book called the Organized Mind. I saw him speak the other day about the book and was fascinated by the stories he told about highly accomplished people.
Not being one of those people, I listened closely to figure out what I could learn. What struck me most was the way he differentiated between creative thinking and rational decision making.
To Levitin, “Creative thinking means allowing the nonlinear to intrude on the linear and to exercise some control over the output.” It is a mystery though, how linkages are made between the linear and non-linear in order to make creative leaps.
“In contrast to creative thinking is rational decision making.” According to Levitin, “Human brains didn’t evolve to be very good at this…because we have a limited attentional capacity to deal with large amounts of information.”
So if a human brain has two critical functions: creativity and decision making, it turns out that we’re not much good at either of them. And if we don’t have the ability to to pay attention to detail, we’ll never get any better at the latter.
This leaves the human brain to excel at one thing, which is day dreaming, and that I suspect we are all very good at this.
by Charles Plant | Jul 31, 2014 | Uncategorized
I’m continually finding interesting entrepreneurship research (among many topics) and thought that it might be useful to share it from time to time. I share on Twitter but it probably just zings by quickly so here is some interesting stuff.
Failed Entrepreneurs Find More Success the Second Time.
My favourite entrepreneurship research of the week is about failure. I’m glad to see that failed entrepreneurs are much more likely to be successful on their second go round. This of course means that we’re willing and able to learn from past mistakes.
Culture More Important than Strategy and Execution
While I disagree with these findings of this research it is because it asks opinions of leaders and doesn’t do any empirical research into the subject of causal factors for success. In any case it is an interesting question to ask.
Startup Accelerators
Accelerators and Incubators have become much more prevalent in recent years to assist startups. I was amazed to find that there were 464,819 entrepreneurs applying to 2,856 accelerator programs. I was flabbergasted to think that there were that many of each.
Tech Industry Not Good at Diversity
Finally to something that is disappointing and probably not a surprise. Research by Y Combinator has found that it funds startups with women on the founding team at a lower percentage than those startups’ application rates.
