The case of a bad incentive
November 17, 2009
A manufacturing company paid sales managers a bonus for forecast accuracy. Great idea, right?
Except the bonus was paid on the accuracy of the total number of cases projected. It didn’t matter what category, or what SKU. If the sales manager said he was going to sell 100,000 cases, it didn’t matter what was in the cases. This makes determining an accurate forecast as easy as mathematically possible. Good for the sales managers, bad for anyone who needed to use the information.
One customer of the forecast was the production planning department, which needed an accurate forecast at least by product group (e.g. a 24ct package vs. a 48ct package of widgets), and ideally by SKU (e.g. 24ct red vs. 24ct blue). Since the sales managers were not expected to be accurate to that degree, the forecast accuracy incentive was essentially worthless to those who actually needed the forecast to be accurate.
The actual desired behavior was not designed into the incentive program.
Ultimately, the forecast accuracy incentive was ignored anyway. Sales managers were paid even more when they sold more. In fact the prevailing attitude in the sales department was not to meet forecast but to beat it. Anyone who did so was celebrated.
Competing incentives – both money and adulation – drowned out the forecast accuracy incentive.
Bad incentive!
Please share your own examples of bad incentives.
My Change Agent Challenge – Part 3: Identity
October 22, 2009
Earlier this week I invited readers to participate in The Change Agent Challenge, to take the opportunity to make a change in yourself to better understand how people change. This post is a continuation of my own observations as I take part in the Challenge.
After all this thinking about flossing, it occurred to me (while flossing) that an important factor in change is identity.
When the change is truly accomplished, a necessary caveat is that the person who has gone through the change has in some way incorporated it into their identity. That is, they see the new attitude, behavior, etc. as who they are and what they do.
In the context of my Challenge to start flossing, I thought, why can’t I just start thinking, “I’m a flosser. I floss.” If someone asks, “Do you floss?” the answer would be “Yes.”
Instead of thinking of all the ways to remember to floss, or motivate myself to floss, I could just think of myself as someone who flosses.
If I continue to think of myself as someone who doesn’t floss, or doesn’t like to floss, or can’t maintain this healthy habit, then this exercise is an uphill battle. But, if I can change my perspective and just give myself the new title, I can eliminate a lot of struggle and resistance.
“If you want to be somebody else, change your mind.” – Sister Hazel
A comment from yesterday’s post made me think that to truly incorporate flossing into my identity that it needs to go further. Martin said “floss for your family,” which reminded me that if I’m a flosser then my kids should be flossers as well. My next step will be to see if 4-year-olds can floss.
Enough about flossing!
I hope you enjoy and learn from taking on your own Change Agent Challenge.
My Change Agent Challenge:
My Change Agent Challenge – Part 2: Integration
October 21, 2009
Earlier this week I invited you to take part in The Change Agent Challenge, a learning experience in which you try to change yourself and see what happens. This post is Part 2 of my own personal Challenge.
In Part 1 of My Change Agent Challenge, I discussed the ways that I increased my motivation to start and continue flossing.
Even though it’s something that I want to do, I still have a hard time remembering to do it. Since flossing is not part of the daily routine, once the autopilot is on, the new step is easily skipped.
Realizing this was happening, I started by paying attention to the autopilot itself. And when I thought about how it worked, it turns out it was counting. That’s right. Each night my brain would do a mental checklist to make sure I had done all the required activities before going to sleep. If I had forgotten to wash my face, for example, there would be a disconnect.
So, to integrate flossing into the routine, I had to consciously add a +1 to the activity count. I wrote the new number on a Post-It and put it on the mirror to try to retrain my brain on the new count.
I still found myself reaching for the toothbrush first when the new step before brushing is now supposed to be flossing. The next step in my analysis was to look at the physical environment. There were two problems.
The first was that the counter was too cluttered so I had to look for the floss each time. That’s an obvious fix. Clear off the counter so only the necessary tools are available.
The second was that the toothbrush holder was far from the rest of the floss and toothpaste. If my first instinct was to reach for the toothbrush, then the floss should be right there so I grab it instead. So, I bought a new toothbrush holder so now my husband and I don’t share one across our long counter. Now my toothbrush is right next to the sink. And the floss is right there next to it.
It takes time to retrain your autopilot, but if you pay attention to what it’s doing, you can find ways to stop and integrate new activities.
My Change Agent Challenge:
My Change Agent Challenge – Part 1: Motivation
October 20, 2009
Yesterday I posted an invitation to The Change Agent Challenge, to try to change something about yourself and take notes. This is the series of posts on my own observations in taking on the Challenge.
“People who smoke cigarettes, they say ‘You don’t know how hard it is to quit smoking.’ Yes I do. It’s as hard as it is to start flossing.” – Mitch Hedberg
After a dentist appointment two weeks ago, I decided that I needed to start flossing. Neither the dentist nor the hygienist gave me a guilt trip about it. They obviously know that doesn’t work, and don’t bother trying.
No, I just know that I need to do it if I’m going to have my own teeth when I’m 80. Plus, it occurred to me that as a change practitioner, I should be able to figure out how to make myself start flossing! And so began the challenge.
Let’s talk motivation.
By the time you have a burning platform with flossing, it’s too late. The effects of not flossing are long-term, or at least not immediate. The risk of getting cavities or gum disease are not enough to have made me floss in the past. In fact, they found a cavity that needed filling at that appointment, and it was nowhere near the part affected by floss. So how is that for mismatched consequences!
The feeling that made me start flossing was a combination of embarrassment and a little paranoia. It was obvious in the cleaning appointment that I hadn’t been flossing, and in the middle of it I thought, “I should have remembered to floss for the last 2 weeks before this appointment so it wouldn’t be so obvious that I don’t floss.” Also, there were 5 days between the cleaning and the filling appointments, and I was sure that if I didn’t floss in between that somehow they would know and would somehow judge me. Really, I was just judging myself. Why can’t I do something that takes just moments and is so simple?
So I had successfully started flossing, but the next dentist appointment isn’t for 6 months. I had to come up with more reasons to continue flossing after the second appointment.
And really, this is it. I decided that I would blog about it in the context of The Change Agent Challenge. And if I was going to do that, I would have to keep flossing. Knowing that I would be making my intention to keep flossing public gave me a reason to continue the effort.
The primary motivator at work here is commitment. When someone makes a commitment to someone else they are more likely to meet that commitment. And so here it is: “I’m going to keep flossing.”
I’m also linking the activity to something that is more interesting to me than the activity itself. By making it a challenge about change, I’ve raised the importance level of flossing in my mind. It’s not just about my teeth any more. It’s about my ability to implement change.
My Change Agent Challenge:
The Change Agent Challenge!
October 19, 2009
Sometimes I think organizational change agents are so focused on figuring out how to facilitate change in others that we forget that our best opportunity to understand how others change is to learn from our own experiences.
With that in mind, I invite you to participate in a challenge that I expect will both increase your learning about change and also result in change itself.
The challenge is this:
- Implement a change in yourself.
- Take notes.
The change you take on might be an attitude, a habit, lifestyle, or anything else. Perhaps you have a New Year’s resolution that you’ve long since broken, or something else you know you need to do but haven’t done.
For me, it’s flossing.
The impetus for this idea was a not-so-perfect dentist appointment two weeks ago. I decided I needed to start flossing and found myself journaling about it as I started thinking about how to best influence my own behavior. It turns out there is a lot to consider about change even when trying to implement a seemingly small change in what might seem like the easiest subject: myself.
For the rest of the week I’ll post what I’ve learned in the last couple of weeks as I try to make a regular habit of flossing.
I hope you’ll take me up on The Change Agent Challenge and share what you learn. Please start by sharing your challenge in the comments below.
If you’re a blogger and will be sharing your own results on your blog, please link back to this post and I’ll be happy to add a link to yours.
Are you up to the Challenge?
My Change Agent Challenge:
Planned obsolescence of change initiatives
June 24, 2009
Sometimes, it can be hard to forget that the goal of any change initiative is to make itself obsolete. You want the change to become part of the day-to-day culture and process of the organization. The processes and attitudes that at first engendered resistance are adopted and incorporated into how the business gets done.
Of course, this doesn’t happen overnight. And you can’t go straight from where you are now to where you want to be. There has to be a journey. The key is to not be sidetracked by the process of change.
Kurt Lewin (1890 – 1947) was the first to describe change as a 3-step process:
- Unfreezing – dismantling the old way, creating a sense of urgency and a need to change
- Changing – a period of transition, challenging the old way but not really knowing what the new way is
- Freezing – a returning to a sense of normalcy and comfort, crystallizing the new way
A good example of this is in a case study I wrote called A Roundabout Path to Increasing Employee Suggestions – the roundabout part is exactly what I’m talking about here.
In the case, the three steps could be described like this:
- Unfreezing – We started a steering committee separate from the executive team to collect and manage ideas. We challenged the concept of paying for ideas.
- Changing – The steering committee collected ideas, and was proactive in the response and tracking. We started a weekly newsletter to keep idea-generation and problem solving at the forefront. Idea submission levels increased dramatically.
- Freezing – Managers started holding regular meetings with their direct reports to identify and discuss opportunities for improvement, and to brainstorm on ways to address the issues that came up. The number of ideas, maintained by managers in a central database, increased even further.
If we had stopped with the centralized suggestion box as the final way for employees to submit suggestions, then we wouldn’t have followed through with the ultimate purpose of the change program: to increase innovation, not because employees submitted more ideas, but because managers asked for and valued them, and involved their teams in solving business problems.
Bottom line: It’s important to not get stuck in the change step, and keep in mind the final state and ultimate mindset change that you are going after. Plan to make your change initiative obsolete.
Inquiry: What will your organization look like when your initiative dissolves?
This post is also featured at Tenacious Tortoise.
Podcast #3: The indispensible change agent
March 10, 2009
The Enclaria podcast series features interviews with change agents. Hear how others overcome obstacles while they pass along lessons learned from their organizational change experiences.
As the Senior Manager of Strategy Management Performance Excellence in a large IT department within a much larger corporation, Pamela Santiago has built a team that has become a center of excellence in change management and strategy execution within the larger organization. Her story also shows how change can start within a support unit as a proving ground, then branch out into the rest of the company. Listen for insights on what makes a successful change agent and change management team.
Case Study: A Fizzled Balanced Scorecard Implementation
March 5, 2009
In the history of Balanced Scorecard implementations and organizational change in general, stories of projects falling by the wayside are numerous. Even organizations that have had great success and demonstrated breakthrough results have fallen away from the methodology, either due to a change in leadership or from the initiative growing stale. In the case of The Jel Sert Company, a mid-size food manufacturer based in West Chicago, Illinois, the project never quite gained the traction it needed to sustain itself, and the leadership team made the conscious decision to end it. Read more
Podcast #2: The 100 Million Dollar Challenge
February 24, 2009
The Enclaria podcast series features interviews with change agents. Hear how others overcome obstacles while they pass along lessons learned from their organizational change experiences.
After 28 years at United Illuminating, an electric utility in Connecticut, Phil Turner retired in January this year as Director of Strategic Planning and Risk Management. As he reflects on his role as a change agent, Phil shares the story of the 100 Million Dollar Challenge, a large scale re-engineering initiative that took place in preparation for deregulation. Listen for insights about restructuring the organization for change, and about the pros and cons of implementing “big change fast.”
Case Study: A Roundabout Path to Increasing Employee Suggestions
July 1, 2008
Many companies try to fill their employee suggestion box. The Jel Sert Company, at the time a 700-employee manufacturing company headquartered in West Chicago, was no different. Over the course of four years, the company tried many initiatives to increase the number of ideas collected from employees, with some success. Read more
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