It’s gotta hurt

Major League Baseball has just severely punished one of its players.

The punishment is severe because the infraction was severe. Canó tested positive for a performance-enhancing drug and, as a result, has been suspended for an entire season. He will also forfeit his $24M salary.

Given that this was a repeated offense, I don’t understand why Canó wasn’t simply fired. He clearly demonstrated that he cannot be trusted. Perhaps it has something to do with his contract or with the union. In my company, if you survive one major violation, you won’t survive a second one.

That said, Corporate America might want to follow MLB’s lead and go after big bonuses more aggressively than it has in the past. An executive involved in serious wrongdoing, but not quite serious enough to get fired, should see their bonus disappear – completely. Perhaps the punishment should not be announced on Twitter, like the MLB did with Canó, but it should be shared with other executives, as a warning.

I’m sure Canó had plans for his $24M. And now he has time to reflect on why these plans won’t materialize.

Self-preservation

People are asking if Biden’s administration will prosecute Trump after he leaves the office.

Answers include:

  • This is for the Department of Justice to decide and Biden will not interfere
  • It would be very unusual (in fact, it’s never been done before)
  • It might not be good for democracy
  • It could distract from the real work that needs to be done
  • It’s better to make sure that whatever Trump did cannot be done again
  • A new president should look forward, not backward
  • It’s a political time bomb
  • It could divide the country

Yes. All valid points.

But one basic, more personal reason seems to be missing: whoever first allows prosecution against his predecessor opens himself up to such prosecution.

A classic conflict of interest. Like the employee who riled against managers’ inflated bonuses until he became a manager, and then those bonuses were just fine and actually deserved.

What drives you?

In these pages, I have often warned of the dangers for management to drive performance via emotional and economic pressures.*

It’s worth reminding ourselves that if we work for an organization that drives performance primarily through pressures like reserved parking spots, office size, weaponized dashboards and bonuses, we can choose not to let these things drive us.

What drives your performance? Would you be as excited to do you work if there was no promise of a bonus or a plaque at the end?

If not, might it be time to contribute elsewhere?


* Based on the findings of Primed to Perform.

Don’t get on that scale

Several companies (like this one) are being sued for selling COVID-19 “at-home” tests or “virucides” that can’t deliver on their promises (or aren’t delivered at all). This type of behavior happens with every crisis. And every time, our conscience is shocked by those willing to prey on the scared and vulnerable.

Somehow, our conscience is not as troubled when someone similarly takes from the rich and powerful. Even less so when the goal is to give to the poor and helpless.

If we continue down that scale, we get to most of us. We work for reputable companies, making good products and charging fair prices. And then, one day at quarter-end, we risk missing our numbers (and our bonus), so we decide to ship the lot without inspecting all the parts as required. Perhaps nothing will happen. Perhaps no one will know.

But you will know. And it will gnaw at your conscience for a very long time. Long enough that you’ll wish you didn’t find yourself anywhere on that sliding scale.

Russia, sports and trust

The World Anti-Doping Agency just banned Russia from all international sporting events (including the Olympics) for the next 4 years.

It’s a severe sanction but perhaps justified when considering that Russia has been stripped of more than 40 Olympic medals since 2002 because of doping. This is more than any other country, 4 times more than runner-up (Ukraine) and about a third of all medals stripped for doping globally.

When considering disciplinary actions at work, I tell management to ask themselves this question: what is the smallest sanction you can impose that is likely to prevent a recurrence? Sometimes, a good discussion is all that’s necessary. At other times, termination is in order. In most cases, we settle for something in between (warning, suspension, transfer, bonus-cut, demotion, etc.).

When it comes to termination, the other question to ask is: did this employee commit a breach of performance or a breach of trust? The first one is easier to forgive than the second one. If we can’t trust the employee anymore, how can we keep them around?

Over the next 4 years, Russia should focus on regaining the sporting world’s trust.

On performance incentives

You cannot incentivize performance. You can only incentivize behavior.

– Simon Sinek

We cannot incentivize sales. Sales can’t do anything.

Sales result from the effort of sales people interacting with customers.

What we need to incentivize is the salesperson’s desire to learn about the offering – what it does, its value, who it’s for – and to learn the skills required to connect her offering to the customer who needs it.

Many companies simply offer a bonus to anyone who meets a sales goal. Year after year, the goal gets higher. The employee’s performance is supposed to improve without the learning of any additional skills. Of course, that’s not possible. Eventually, the salesperson will be unable to meet the goal without cheating or lying. Without realizing it, the company has incentivized maladaptive performance.

The next time you set an incentive, consider all the behaviors you will affect.

Thinking of the impact on culture

Would any of the following activities impact your corporate culture?

  • From now on, anyone hired in the HR department has to be a licensed attorney
  • From now on, no one in the company receives a bonus unless sales targets are met
  • From now on, promotions are only given to those who have reported wrongdoing in the last 12 months

Answer: Yes, clearly.

How about these activities?

  • We will acquire a competitor
  • We will open our first international office
  • We will reach new markets by using sales intermediaries

Surprisingly, many business leaders will not contemplate the effect of these activities on their corporate culture.

Now, how about these activities?

  • Setting the budget
  • Implementing a new ERP system
  • Outsourcing the manufacturing of a key component

Getting more nebulous, right?

Yet, everything we do impacts the culture. Culture is an outcome of our processes, of how things are really done.

So the next time you set about to make any change in your organization, know that it will impact the culture in some way.

It always does.


HT to Rich Bohan

Play, purpose and potential

Today is my quarterly “connect meeting” with my boss.

We sit down and discuss how things are going. It is meant to be more than an evaluation of my performance against objectives. The objectives themselves are up for discussion.

More importantly, it is an opportunity for me to reflect on why I go to work, to identify my drivers, and to adjust as necessary. My goals are:

  • To remove inertia at all costs. If I don’t know why I’m doing something, I must stop doing it immediately.
  • To remove economic and emotional pressures to the extent possible. Am I doing something simply because others expect me to do it or because my bonus is tied to the task? When there is no other purpose, this type of work rarely benefits the organization.
  • To maximize my sense of play, purpose and potential. I want to craft a job so exciting that when I go to bed at night I am looking forward to getting up the next morning. A job where I can try things, where failure is considered learning, where I help others and grow in the process.

Come to think of it, these connect meetings are filled with play, purpose and potential.

Performance tax

The jerk we don’t fire.

The metrics distracting from the real work.

The third approval on an expense requisition.

The sales bonus that’s not in the best interest of the customer.

Communications focused on “what” and “how” but not on “why”.

They all impose a tax.

On our compliance.

On our business.

On our culture.

When good people do bad things

Too often, we see colleagues lose their job for covering up a mistake that would not have led to any form of discipline, let alone their termination.

Those are the saddest moments.

They expose a low-trust culture where an employee is willing to risk her job or her career for fear of admitting a mistake.

Our typical response – to shake our heads in disbelief and then move on – is unacceptable. Someone just lost their job, in part because of the culture we created or tolerated. We ought to examine how we do things and look for what might have led to this unfortunate outcome.

Questions to ponder:

  • How do we react when others make mistakes, miss a deadline, fall short of a goal? Is the reaction commensurate to the missed opportunity?
  • When we make mistakes, do we admit them freely? Do we share the mistake and its learnings with others (demonstrating that one can survive mistakes)?
  • Do we go as far as encouraging mistakes by asking our employees to be curious and to experiment?
  • Do we recognize colleagues for pursuing innovative ideas, even if they fail?
  • Do we have unforgiving compensation schemes, where huge bonuses are paid for meeting 100% of the goal but nothing if 99.9% of the goal is met?
  • Do we offer an ombudsman program where employees can ask for advice while remaining anonymous?
  • Do we forgive mistakes made by senior leaders more easily than those made by the rank-in-file?

To be clear, employees who cheat, lie, and steal to cover up a mistake deserve to be punished. But let’s remember that everyone has a breaking point. So when someone breaks, how much of that pressure came from us?