The Incentive Continuum

There is a balance between individual and team incentives. It is important to realize that this balance is dynamic. To assume it is static risks the potential of "stale" performance.

Think of incentives as being on a continuum. This continuum starts with individual performance and ends with team performance. If incentives are at the "individual" end of the continuum, then personal agendas will supersede team performance. Behaviors exhibited at this point in the continuum usually produce short term results and are sycophantic in nature. This is not something that all people are given to, but it is something that all people will exhibit to one degree or another, when the incentive is for individual performance alone.

On the other hand, at the opposite end of the continuum, if incentives are strictly for "team" performance only, confusion may occur. Who will lead when there is no incentive to lead? Who will make decisions? Ambiguity ensues and individuals, especially highly motivated individuals, become disenfranchised. They will disengage and results will be slow in coming and as ambiguous as expectations for the team.

Given this data, the correct balance must be identified. Such a balance depends on organizational values, objectives and business needs. Determining the correct balance cannot be arbitrary, but rather should be a disciplined, proactive process that is aligned with organizational strategy. This also anchors the incentive program to the organizational culture.

To ensure that the incentive plan does not become stale, it should be evaluated for change on a periodic basis. This will ensure that the incentive plan has the correct balance, at that period of time for the organization, between individual and team performance.

It is also important to keep in mind that not all incentives are monetary in nature, and not all incentives are formal. Leaders within the organization can exercise creativity for short term projects or plans, which will help drive results. The same criteria for developing these incentives are the same for broader organizational incentives.

Finally, incentives are a form of recognition and nearly everyone wants to be recognized for their efforts. Not all want to be recognized in the same way. George Washington was keenly aware of this during the American Revolution. A highly puritanical congress thought that the Continental Army should aspire to the greater good of the country and quit complaining that the worthless Continental Scrip they were issued had no value. During Valley Forge, there were large numbers of troops deserting daily, most of which deserted for lack of "real" pay. Washington was keen on recognizing the folly's of this congressional thinking and met with many of his men who had deserted upon their capture and return. He asked them of their concerns and promised with full intent, and the integrity known to be characteristic of him, that he would do his best to redress their grievances. His troops returned and others on the cusp of desertion remained.


These men of the Continental Army were only seeking recognition for their efforts, trials and contributions. They wanted to be validated as individuals, as soldiers, as human beings. They also had to work as a team. Through the instrumental skills of Baron Von Steuben, Washington was able to give his troops pride (read as recognition) as an army that would be a force to be reckoned with; a team.

Balance had to be found on the continuum. So it is with every project for every organization. Incentives must exist, but they must be balanced between the individual and the team. They must be appropriate to the time and the task. And they must not be allowed to go stale.

When performing an investigation, it is important to consider incentive, both for the team and the individuals on the team, to ensure the investigation is sound and completed on time. It is critical that your plans for your team are found at the right point on...

The Incentive Continuum

Leadership & The Drill Master

I prefer learning leadership from historical lessons, rather than theorized concepts found in the current contemporary literature. That is not to say that the contemporary literature does not have value and merit. I read much of the contemporary literature as well. However, learning from others in the past, which have had to lead during trying and difficult times (when leadership is truly put to the test and demonstrated), brings me great pleasure and something I can wrap my mind around.

Given the above, here are my favorite books on leadership:

1. Washington's Secret War: The Hidden History of Valley Forge
2. Henry Knox
3. The Drill Master of Valley Forge
4. We Were Soldiers...Once, And Young: The Battle of Ia Drang Valley

I love that all these people, although they demonstrated excellent leadership when called upon, saw leadership as a character trait rather than a technique, and that although they were great leaders, suffered from some flaws in human frailty as well. Great leaders are human. All too often we think them infallible. It is the human side of their nature, aspiring to something great, which in times of difficulty allows leadership to rise within them.

This is even more important when one considers that each of us are of the same mettle. To what level though, do we build leadership as a character trait, such that when called upon, we too may lead? This is the question we must all face, whether leaders by design or by circumstance. It cannot be ignored.

Below is an image of Baron Von Steuben "The Drill Master of Valley Forge" working with Washington's troops on learning drill. Von Steuben demonstrated exemplary leadership at a time when our nation's greatest need were for his skills in leadership.


Here is what Von Steuben expected of his troops:

1. Excellence in execution through daily practice
2. Officers (read as supervisors) participating in daily practice
   
3. Officers taking care to ensure their troops needs were met as much as could be expected
4. Officers developing their careers through results, rather than pandering for promotion

Here is what Von Steuben expected of himself as leader:

1. Lead by example
2. Orders (read as assignments) are best completed when understood why they are important
3. Humor is important in engaging others
4. Be firm and decisive when appropriate
   

Understanding leadership and building it as a character trait will ensure that all the objectives of any investigation are met, that it is robust and definitive in the root cause, or exhausted entirely in the pursuit of root cause. Von Steuben gave a great example of how this is the case. You can read about it in "The Drill Master of Valley Forge." Just think about the next investigative team you either lead or participate in, and consider...

Leadership & The Drill Master

Draining The Pond

My father-in-law owns a farm in Preston, Idaho (famous for the film, “Napoleon Dynamite”). There is a small creek (pronounced “crick” in Preston) that intersects the property and feeds a small pond in the center of the property. The story is sometimes told of when the pond had to be drained.

It seems there was some obstruction to the pond effluent. The pond had a small concrete dam with a steel plate flood gate. The flood gate was opened and the pond drained so the obstruction could be removed. As the pond drained, an old rusty Model A Ford began to appear. Once the water level passed the Ford, and as the pond continued to drain, an old refrigerator was seen. After the pond was completely drained, the Ford, refrigerator and other junk in the bottom of the pond were chained to the tractor and pulled out. The pond was then refilled.

Not long ago, I got the opportunity to drain the pond at work. I was assigned an investigation, the purpose of which was to find why we were not able to correctly account for some units of very expensive product. As I pursued the investigation, it was discovered that the operators had just a few seconds to count over one hundred units of product and that this was done about every 2-3 minutes. The counter measure was to create a template, that would be placed over a tray (or case) of units, to see if they looked correct. Voila! Problem solved.

What?! But, wait a minute! You say that there is still a problem with the accountability? Yep, you guessed it. I was assigned another investigation for the same thing not long after the first investigation. So I dug a little deeper this time. The data I analyzed showed that the templates for counting the units of product worked well on the large units, but because the small units were in presentations of nearly 600 units, it was difficult for operators to tell if the count was correct or not. Hence, the potential for an erroneous count was still there. The counter measure implemented at that point was the introduction of an automated visions system that would use a computer and camera to do the counting, taking out the potential for Human Error. Finally! Glad that’s over.

Hold on now! I just got done fixing this problem. It can’t still be happening, can it? Another investigation assigned for the same thing, yet a few weeks later. When will the bleeding stop? In this investigation, I learned there was a new step in the process for additional testing to ensure oxygen content of the product was less than 1%. Final unit accountability of the product was completed before this step was executed. The problem was that a failed unit would be rejected, thus changing the count. This was not accounted for in the planning phase for implementation of this new step in the process; fixed yet again.

Process improvement is often referred to as Draining The Pond. It is the process of looking for incremental improvement rather than betting on big step changes. As you improve productivity through process improvement, you find other opportunities for improvement. The beauty of Fault Tree Analysis, is that you can capture several gaps in the process – junk in the pond – simultaneously by creating a visual of all the hypothetical gaps.

When I was doing these investigations, I was not disciplined in using Fault Tree Analysis in this way, but it would have helped prevent the non-value added activity of doing multiple investigations for the same issue. That is not to say that Fault Tree Analysis will be the end all, be all for any issue. I have been involved in investigations that used Fault Tree Analysis, which did not capture all the potential gaps for the Loss Event. However, capturing more gaps in an investigation, rather than fewer, is a more efficient way of…

Draining The Pond.

Perfect Execution or The Perfect Plan

I read a white paper some years ago, published by a well known global consulting firm, which stated something similar. The hypothesis, which was successfully argued, was that, "Perfect Execution delivers better results than a Perfect Plan."

The fundamental process for Lean Six Sigma (LSS) is DMAIC - Define, Measure, Analyze, Improve and Control. The essence of the American Express article is that, in corporate America, we sometimes get bogged down in the Analyze phase of any launch or implementation. We sometimes feel we need to know the minutiae of detail before we feel comfortable taking the risk of launch/implementation.

The fact is, that without risk, there is no reward. Referring again to LSS methodology, being risk averse completely bypasses the Improve phase of the DMAIC process. Beta testing, used by the IT industry, is in essence, a Pilot Project - something that is often used in the Improve phase of DMAIC. The purpose of pilot testing is to gather information not available by any other means. In other words, you are launching/implementing without all the data you need.

Collection of the data gathered by the pilot/beta test, allows you to tweak your process/product so that you can Control (read as "sustain") results and at some future date, Validate (another key component of the LSS methodology) the process/product.

Given this argument, it is far more important that the pilot/beta testing, be executed flawlessly. Execution is the most critical factor. Disciplined execution will provide all the data that is needed and much that was unexpected and which can also be used. It also places trust in the end user of the product or process, which gives them "skin in the game." This kind of leverage drives both the success and sustainability of the implementation/launch.

When doing investigations, which often use LSS tools (Fault Tree Analysis), it is far better to execute robust Root Cause Analysis, and appropriate Counter Measures, than it is to try and find every little reason why the Loss Event occurred. This approach (the perfect plan) can soon become counter productive. I'll share more on this in a later post about Draining The Pond. In the meantime, think about what will get you the results you desire...

Perfect Execution or The Perfect Plan.