When incentives are not aligned

incentive alignmentA friend was describing a situation in his business. The region is struggling with a 50% vacancy rate – a real issue given that it is a service business. Just getting enough staff to meet contractual obligations is time consuming and difficult. So when the head of business development talked about the need to expand the business, he about fell over. They can’t meet the current obligations, how can they possibly grow? I asked if the business development head is incentivized based on growth in the region, the answer was yes. No wonder! The incentives were not aligned, so sales was out drumming up business while operations was struggling to keep up. It was a fantastic reminder to ensure that all parties are incentivized to row in the same direction to make the business successful. How do you ensure incentives are designed in a way that you get the results you want?

Posted in Change Management, Leadership, Strategy.

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