Have you ever grabbed a shopping cart with a bad wheel? A wheel that frantically wobbles and squeals as it desperately struggles to break free of the cart?
That’s basically what happens in the workplace when employee incentives are out of whack. Energy and resources get gobbled up by wobbles and squeals, battles and blame-storms.
And as anyone who’s tried to make do with a bad cart knows, it’s best just to ditch it, and that’s how most people (customers and employees) will treat a business with wonky wheels.
So getting incentives right is crucial, but to do so takes a pretty solid understanding of how each role collectively fits together to help the customer.
For example, product management (company facing) and sales (customer facing) roles must be incentivized to work together. This is because product decisions are validated in the marketplace, and sales is where the business meets the marketplace. When done right, both product and sales teams work together, acting on feedback, to continually improve the offering for the customer. When done wrong, badness ensues.
Since sales people are incentivized by sales, they’ll work hard to minimize the number of customer interactions required to earn each sale. Fewer interactions per sale translates into more sales per day/month/quarter (and higher paychecks for the sales team, as well as higher revenues for the business).
So far so good. The sales team is motivated to work closely with the product team to improve the offering’s value proposition.
However, problems develop if the product team is insulated from the sales team—the sales feedback falls on deaf ears. Without accurate feedback from sales efforts, product decisions are based on speculation (laden with assumptions and personal bias), and without a channel for improving the product’s value proposition, people in sales will either bend the truth to hit sales targets, or find another job.
Without a feedback loop, the offering increasingly misses the mark. This tanks customer satisfaction and wipes out customer referrals, which is widely regarded as an indicator of future revenue. Pressure to improve revenues causes cloudbursts of blame to erupt between the teams. Internal warring spreads like a cancer. To the outside world, it just looks like wobbling and squealing.
And while internal battles rage, the business’s reputation as a bad cart grows, creating an ever-increasing headwind against future sales—starving the business into extinction.
But it doesn’t have to end this way. Incentivizing the product and sales teams on the right measurement immunizes the business against this vicious cycle. Using average customer interactions per sale would likely do the trick.
By aligning incentives we cultivate the cooperation necessary to scale the business—ensuring all our wheels are rolling in the same direction!