i2i - Incentive Intelligence

HRevolution - Brought to You By John Madden

This past weekend I spent a couple of days in Louisville, KY with 50 smart people interested in HR.  The program, HRevolution, was billed as an "unconference" - and I can say it lived up to that name.  No "standard" powerpoints (I really don't remember seeing one prepared slide,) lots of conversation and participation from the audience.  Formal and informal at the same time.  In other words - different than most conferences you'd attend.  A bit more free-flowing and open.  Fun to watch and fun to participate in.  

Huge mad props go to @trishmcfarlane, @beneubanks, @steveboese and @crystalpeterson for taking the time and the risk to put this together.  Thank you.  I enjoyed the meeting, loved the people, was interested in the content, learned some interesting perspectives.  120% worth my time.

But here's the thing (this is where the temperature will go up and the haters will come out...)

I'm not sure where we netted out.  

That may not be a bad thing - I'm just conditioned to leave meetings with a "to-do" list of things that I need to work on.  I didn't feel that anyone had that.  Until I have a to-do list I feel like I'm just cogitating - and I want to be activating.

It can get dangerous in my head when I don't have a to-do list.  I need to fill that vacuum and it can lead to neurons making connections that can get me in trouble.  This may be one of those times...

HRevolution - Are You Ready For Some Football?

I am not in HR.  Never been.  I've bumped into it in a few times.  Never a hard bump but one that could have drawn an interference flag had someone been watching.  My experience has always been that HR was the group in the organization that protected the CEO, other Execs and shareholders.  If we were playing football, HR was the offensive line for the muckitymucks.  HR kept the bad stuff out - away from the brains behind mahogony doors planning the next big strategic move, the next buy-out, the next financial whatzzit that will drive share price.

But interestingly - for Managers like myself and my employees they also played defense.  Every time I'd try to run a new play, one I thought could gain a few extra yards, HR was there cutting it off.  Simple things - changing titles, going outside "average" raises, not having "official" office furniture.  Every time I'd run the play HR seemed to be in the way - knocking the ball down, hitting me behind the lines.

How is that possible?  How can people on your own team play on both sides of the ball.  For you AND against you?

Then it hit me.  They weren't on my team - they were on the "company" team.  The company has a different definition of winning.  They didn't care about my playbook, only their own.

And that is the problem - in most organizations, HR is tasked with playing both ways, on both teams.

You can't win that game.  

When you play both ways on both teams you can't win, you can't lose, you can only draw.  I felt the frustration in the voices at HRevolution.  They feel that pain. I truly believe they are conflicted - and I feel for you all.

You Can't Change HR - You Can Only Change Companies

I'll bet if you look at any organization that has a creative, proactive, successful HR department you have a unified team approach to the market.  In other words, HR (as the progressives see it) can ONLY work in a company where everyone is on the same team. (Zappos anyone?)

Until you have the executives, managers, shareholders, employees - all agreeing with the mission/vision/values you can't have good HR.  

• Good HR can only exist within a company run by executives who would rather lose money than lose people.  
  
  
• Good HR can only exist within a company where the lowest employee should have the best parking space. 
  
  
• Good HR can only exist within a company where HR is the most important department - not accounting.

HR has a choice in my book.  HR can continue to talk to other HR folks and commiserate about the position they are place in - or they can choose a team and play the game.  

Play it hard, play it fast and play to win. 

So after listening for two days I net out here...

If you want to provide progressive, important, seat-at-the-table (gah - I said it!) HR, find a good company.  

If you can't find a good company, change a bad company by changing the Executive Team (don't try to change HR or the employees - you all know what do to)

If you want average HR play both sides of the ball and live with it.

It's fourth down, 2 yards to the end-zone, 6 seconds left in the game, this score wins it.  What do you do?

Me - I'd punt just for sh*ts and giggles.

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Service Anniversary Awards - Again!

I don't know if it is just an easy target or one that is on my mind more than other typical enterprise reward programs.  Maybe because almost EVERY company celebrates service anniversaries it is just the most often encountered in my work. (see another post here.)

But I still come back to the fact that these programs are designed around a criteria that has nothing to do with the business issues facing companies.  I submit you could line up every service anniversary program in the world next to each other and no company could pick their program out of the pack.  Each one has the same schedule, same awards ( or so similar you could call them the same.)  But I can't believe each company has the same issues with their employees.

Some companies run the program to reinforce that the company values those employees who stick around which is fine.  But why not use the program to change something rather than just document something.  

What I mean is this...

If you're going to spend the money get a return.  The way in which most service anniversary programs work they don't provide ANY ROI.  I'll stick with that statement because few if any programs are designed around an objective - they are designed around a government tax allowance for these types of programs.  

Would you invest in a piece of equipment SOLELY because you get a tax break?  Probably not.  You'd want that machine to not only take advantage of the tax opportunity but you'd really want the machine to do the work you bought it for - new capability, new quality levels, whatever.  Your service anniversary program should be looked at in a similar light.

Here's where I look.  Map out your turnover based on how long people stay with the company.  What's the turnover in employees that have been with the company 1 month, 1 year, etc.  Is there a point at which turnover is highest?  Typically there is a pattern.  I consulted with a company who knew that if they could keep an employee past 18 months they typically would stay another 5 years.  Guess what, their service anniversary program awarded 1 year and 5 year milestones.  Kinda missing the point here eh? 

 

Why not have the program designed in such a way to start connecting with employees for 6 months prior to the 18 month "danger zone?"  Why not take the budget from the other anniversary award levels and put it into a communication and reward program for employees in the 12-24 month window?  If you can impact the employees in the danger zone you can increase your overall retention and not have to spend the same at 5/10/25 (although depending on your program you might.)

Don't run your program because the government says you can get a tax break - run your program to drive your business.  Rant over.

Sales Motivation Research Has Charitable Impact - Thank You

I'm bouncing off to the HRevolution Conference in Louisville, KY tomorrow and will be doing some windshield time - thinking about my "unconference" session and what the heck I'm going to say.  Being an unconference I'm gambling on the fact I don't really have to prepare too much.  Of course you know I will :-)

But while I'm dodging cherry-tops and looking for Starbucks off the interstate I want to thank those of you who read my post on the Sales Motivation Research conducted by Paul Beaumont out of the UK and responded.  Paul hit all his targets and has some great information that will be published some time in spring of 2010.  Hopefully, I'll be able to bring you some groundbreaking info then.  Here's a link to his group on Linkedin if you want to connect with him.

At the time that Paul and I connected I did not know that behind the scenes he had arranged for a donation to the Save the Children charity based on survey responses.

Below is the text of a letter sent by the charity to Paul Beaumont thanking him for the donation.

Thanks to all of you who responded to the survey and I hope the results help you drive motivation in your sales organizations.  Obviously, if there is anything I can do to help let me know.

Save The Children Thank You

View more documents from Paul Hebert.

Thank you for your help

Premier Episode - Influence Insiders on Blogtalkradio - May I Have Your Attention?

Yesterday at Noon EST you may have felt a slight disturbance in the Force.  That was the exact moment when the first episode of a monthly discussion on how to influence your audience hit the airwaves (more accurately the internet waves.)

(Note:  as of 7:30am Nov. 5 - the blogtalkradio site was having some issues - player may not work - check back please...one of the pitfalls of free services I guess.)

Influence Insiders has one episode in the "can" so to speak and you can jump in and listen via the embedded player to the right, or out at blogtalkradio.  The show lasted an hour so grab a sandwich and listen during your lunch.

I can tell you this - I truly enjoyed the conversation with my fellow panelists and was very happy with the turnout from the audience.  I can't wait for the next episode - December 2, 2009 if you want to mark your calendars (Noon EST again.)

I won't go into details on the set up - you can read that here from a post last week.  On the show were:

• @annbares
• @heathermargolis
• @leapcomp
• @toddhanson
• @incentintel (that would be me)

Missing from this episode were @frankroche and @thelance - (we missed you guys!)

Great contributions - thank you all very much.

Since you can listen to the show I won't go into boring details but here's where I netted out of the hour-long discussion...

• Getting an audience's attention is tough (no new news there.)
   
• Every audience is starting to act more like a traditional consumer audience.  B2B customers, Employees, etc. are have similar issues relating to information overload and multiple channels of communications.  Getting any audiences attention is tough and getting tougher.
   
• People are less influenced by "brand" messages (again no new info.)
   
• People pay high attention to someone in their network - whether that be in real live or via linkedin, twitter, or other online groups.
   
• Getting attention today is about getting the attention of some one who can get the attention of your target audience member.  In other words, you might ignore a message from a brand that you received via email, TV, radio, other "mass" tools - but if someone in your network says to you directly - "you might want to look at this" you will pay attention.
   
• The need for a "big" event to get attention is less important than an event that gets the attention of a few people who are in the network of the person you want to talk with.

It Ain't New Any More

Some will say that none of that is new - and I'd agree.  For those of us who have been involved with social media and networks we've known this for a while.  But the key thing for me is that it is now mainstream.  It isn't a cutting edge idea and it isn't something only the "new age" companies need to worry about - it is here and it is real.

Tortoise and the Hare

The one thing that hit me after the show was that attention isn't something we get with an announcement any more - it's something we get, over time, based on opinion.  It's probably best illustrated...

 

If you're responsible for communicating with an audience and getting their attention - you may want to consider being the tortoise instead of the hare.  In my opinion, a good message to the right network will have a bigger impact on the audience - and have staying power.  IMHO.

Hope to have you on the next episode - remember - December 2, 2009 - Wednesday - at Noon EST.  Hope you tune in!

 

Deming and Systems in Today's Business World - No Answers Just Questions

In the last few weeks I've seen a couple of people quote Deming saying "95% of the problems in business are system driven and only 5% are people driven." (Or similar to that.)

Based on that simple statement it would seem that you should spend 95% of your time on improving the process in order to get your biggest bang for your buck no?  Seems logical.  If that's the case - don't run incentives or reward programs - pour all your money into system design and try to create a system that is fool proof.

But not really...

One of the people that used that Deming quote was @bobcorlett - who runs Staffing Advisors and is a Deming guy.  I'm not - I'm familiar but not a scholar.

So Bob and I connected on the phone (gasp!  I know - real time, analog) to discuss the quote.  My point was that a quote like that would seem to indicate you should worry less about the people themselves and more about the system in which they behave.  Bob reminded me that Deming also said a poor system will win every time over a good employee.  There is a lot of truth in that as well.

But after a great conversation about people and systems that meandered around a bit, (btw - Bob does not advocate ignoring your human resources in favor of systems) I was left with this thought...

Deming focused on systems because they were the process by which business got done and that's what drove success at that time.  A good, predictable, non-variable system produced quality products en masse.  Since business was about production of product primarily made by doing the same thing as many times as you could in a quality manner, it made all the sense in the world to focus on the process not the people.

But are we production oriented today?

Today however, our economy changes rapidly, businesses change rapidly, business models change rapidly, technology changes rapidly.  Do systems still matter more than the people?  Should you worry more about systems or people?

When we were an industrial economy, success was a function of economies of scale, quality and mass production.  Controlling variability was a good thing. We wanted to make sure that all the machines contributing to the process behaved within the specifications.  The tighter the specifications the better the quality, the lower the costs and the ultimately - the better the product.

But today, it seems to me we are driven more by innovation and new ideas brought to market quicker and incrementally better or through big disruptions.  To me that is the antithesis of the Deming formula for managing variability in a system.  To me creating variability has more value than limiting it.

Plus - there is no machine in the world with as much variability as a human being.  Our specs are off the chart on what is possible.

So, I'm left with this... how much should you spend on systems versus people in today's business world?

Or is it - "You gotta do both, quit carping and move on!"

Is it 50/50 now or does Deming still hold?  Inquiring minds like mine want to know.

Bueller, Bueller?

A Face Made For Radio - Conversations About Influence - New Blogtalkradio Show

Move Over Howard Stern

My father always said he had a face made for radio - and due to the vagaries of genetics - I've inherited that trait.  Always looking to turn a weakness into a strength I'm playing host to a new radio show - brought to you by the magic of the internet.  Through Blogtalkradio you can, using only your phone, listen and contribute to a discussion on how to influence and drive business performance through employees, channel partners and consumers.  And as a bonus it will be a bit of fun.

The Format

This isn't really my show - it's a collaborative effort.  

Over the course of a few years I've been privileged to be schooled by some very smart and engaging people.  All of whom are outside my normal area of focus.  And that's the important part.  Having a group of people that aren't affected by your own biases is a great way to grow and learn.  So, as a group, we thought if we all benefited from those conversations you might as well and we created Influence Insiders.

Influence Insiders is a core group of experts, bloggers, thought leaders and smart folks who will be getting together monthly to talk about the things that challenge them and their clients associated with engaging audiences.  The line up is impressive and should provide all of us with some interesting points of view.  I know I'll be learning and you can to if you tune in and listen & contribute.

The Team

In no particular order:

• Ann Bares (Minneapolis):  Managing Partner  – Altura Consulting Group, author of the blog Compensation Force (a Workforce.com featured blog)  and editor/contributor for multi-author blog Compensation Café and one of the Top 25 Talent Blogs as ranked by Fistful of Talent (FOT) – a popular talent management and HR focused blog.  Ann has been a compensation consultant with RSM McGladrey, Inc., Riley, Dettmann & Kelsey LLC, and Watson Wyatt Worldwide. 
   
• Frank Roche (Philadelphia):  Partner iFractal – sponsor and contributor to very popular KnowHR blog.  Frank and his team focus on helping their clients talk to their employees.  In the past Frank led Mercer’s Human Capital Practice in the Netherlands and worked at Hewitt Associates.
   
• Heather Margolis (Boston):  President Channel Maven Consulting – Prior to her current role Heather led channel programs for companies like EMC, EqualLogic, and Dell.
   
• Julien Dionne (Ottawa, CN):  Julien authors the very informative blog leap.com and works with OpenSymmetry a consultancy that specializes in Sales Performance Management strategic planning, business process optimization, technology assessment and system integration engagements across diverse industries and software providers.  He has worked with Accenture and nGenera prior to OpenSymmetry.
   
• Lance Haun (Portland, Or):  Lance has a long history in the HR field and authors the highly rated and read blog YourHRGuy – now called Rehaul.  He currently is VP Outreach for a company called Meritbuilder – an online employee reward/recognition portal with a unique feature of being portable – moving with the employee as they move.
   
• Todd Hanson (Appleton, WI): CEO of Catalyst Performance Group.  Todd’s group is heavily into measuring the ROI of marketing and incentive/reward programs.  They are currently measuring the ROI on the recent Motivation Show, works in partnership with the ROI Institute and he authors the blog called the ROI of Engagement.
   
• Paul Hebert (Greenville, SC):  Managing Director I2I – author of Incentive Intelligence, contributor at Fistful Of Talent and general good guy.  20 years helping companies design and operate incentive, recognition and loyalty programs – degree in Statistics, worked on the Space Shuttle and B1 Bomber while employed at Rockwell and did a stint at a branding and corporate identity firm.

The Schedule

• Monthly - the first Wednesday of the month (First episode Nov. 4 at noon)
• Time:  Noon - 1:00 p.m. EST

How to Play

Blogtalkradio is essentially a big conference call that is recorded and shared.  During the call people can chime in and ask questions, add to the conversation and in general be a part of the fun.  The service (free version of course!) allows for 5 simultaneous "open" lines plus the host (total of 6.)  During a show the host (that'll be me) can add folks and mute others to move the conversation around the audience.  If you want to chime in - just hit "1" on your phone and the host is alerted and can then "unmute" you and you will now be part of the show.  Pretty cool.

We've set up our station at: http://www.blogtalkradio.com/i2i

The call in number will be the same for every episode: (646) 381-4430

The topics will be different and varied.

YOU are Important

The real fun of this isn't the group of us talking about how to drive business (well, yeah it is that) but that you get to play in the process.  Truly, the benefit to us it hear your points of view and hear what is stopping you from fully engaging your audience, influencing their behaviors and driving business results.  

Here's the topic for the first show next week:

 

I hope you take the time and listen in.  

How To Find Unintended Consequences in Your Incentive & Reward Program

$25,000,000 Bonus

A $1,000,000 mansion

What do these have in common?  Simple - they are things you would probably do something different to get.  You might sky dive, you might bungee jump, you might make a few more cold calls every day.  In other words they could influence your behavior if you were given the opportunity to earn them.

And they are huge awards.  So huge in fact, you might do something outside your normal comfort zone to earn them.  You might cheat a coworker, you might figure out how to scam the system, you might lie to a client. 

And that's a big clue that the program will have unintended consequences.  And trust me you don't want that.

Take a moment and look at yesterday's Dilbert cartoon...

Even the Pointy-haired boss has an inkling that something is amiss.

I know there is a lot of pressure to show an ROI and the only way to do that is to tie it some outcome, some metric.  Unfortunately, the typical response in order to ensure a positive ROI, is to have the program focus on a result (outcome) and tie it to a big award.  However, when the award is huge and it's based solely on a result, there is a natural tendency for participants to maximize their return and find a way to shortcut the process and get the award.  

Marry your outcome based goals with behavioral goals to keep the program in check.  The behaviors - the things the individual can control - should bear the weight of the program.

Putting too much of the award on the outcome communicates you don't care how they hit the goal - just that they hit it.

Ask the folks on Wall Street how that worked for them?

Rewards and Incentives Are GOOD for Business!

Like Gremlins under Niagara Falls, articles posts and commentary deriding the use of rewards and incentives are popping up everywhere on the internet.  While innocent at first, not unlike the cute and cuddly Gizmo from the movie, they too have morphed into ferocious monsters, fed, not based on time, but by the speed of social media and lack of due diligence.  

So here I am, again, forced by "internal motivation" to take time to provide a counterpoint to the growth of misinformation and the cult of personality surrounding the "age of non-incentives."  In the movie, Gremlins were fearful of light and could be destroyed by it - I am hopeful by continually shedding light on the issue I can do the same.

I don't think this will be the last time I confront this issue.  The web has a way of holding this type of information in abeyance, waiting, lurking.  I'm sure in the near future someone will find a dusty tomb or link somewhere that says incentives cause baldness and I'll be back at the keyboard (hmmmm.... maybe after being in the biz for 25 years that's the reason?)

But – spurred on by support in the comments to my post last week and emails - I push the rock once again.  

Below is another presentation (quickly assembled) on how to look at incentive reward strategies within the context of how business operates.  Comments welcome as always.

(email subscribers will probably need to click through to the post to see video)

>

Is the Best Offense a Good Defense? (Bare Naked Ladies at end of post)

Is there something wrong with being defensive?  I mean - if you're constantly defending a position against an onslaught of negative and erroneous information is that a bad thing?

For the past few weeks/months it seems that I spend more time defending the position that rewards and recognition are not bad things - just things badly done.  Yet it seems that either I don't have the reach required or people just don't care (or - and this is highly unlikely - I'm not right.)

I've posted a response to Dan Pink's video saying rewards are bad, bad, bad.

I've posted a response to the poorly written and flat out incorrect article on the 10 myths of motivation.

I've posted numerous times on how you can't blame the program if it's poorly conceived and executed - blame the plan designer.  But alas and alack it seems for naught.

And once again, find myself in the position where I feel I need to post about an article with so-so information and in some cases just wrong.

So I'm asking you all - should I post again about this?

Hopefully you will respond - let me know - should I just keep my head down and tell my story or take the time to respond to the "academics" and ill-informed?

I leave it in your hands.  Please let me know in the comments.  

I may not sleep until I hear from you (video courtesy of Bare Naked Ladies - curious to see how that reference affects my rankings...)

Email subscribers may need to click through to see video below...

It's not about motivation - it's about decisions

Incentive programs are really decision programs.  Whenever you put an incentive in place you're really asking the audience to make a decision about changing their behavior - and giving them a "bonus" for doing it.  (This really doesn't apply for recognition programs since that is typically an "after the fact" award to drive and reinforce cultural norms - not individual performance toward a goal.  Both influence behavior but they do it in different ways.)

Think about it: the goal of an incentive program is to present two options 1.) do the same thing you've always done  and 2.) do something different and we'll give you "X".  The "X" can be additional vacation time, points redeemable for merchandise, gift cards, or a travel award.  It's not really a motivation program - it's a decision influence program.  The audience can choose to not change behavior (typically no downside ie: punishment) or they can choose to change behavior and get the "bonus."

Decision Programs

One of the reasons I2I doesn't say we're a "motivation" consultancy is because we don't "do motivation" but we do believe we provide clients with a better "decision program" - one that packages the offer and the outcome differently - in a way that gets audiences to make a decision in favor of behavior change.  Because of that focus - we're less worried about whether you use a catalog or debit card - but are very interested in how people make decisions so we can present your "decision program" in a way that gets more people to make a decision to change a behavior.

Long intro to this...

Video of Dan Gilbert at TedTalk on how we make decisions.  Dan works in the Psychology Department at Harvard University has presented at TED and has been on the Colbert Report.  And he's a pretty good presenter to boot.

The focus of Dan's research is on how we make decisions related to our happiness but I think it translates into how we make decisions in general - and specifically in whether we "buy into" an incentive or not.

The video (click through to see video if you can't see it in your reader or email box) is 35 minutes long - but I can tell you if you are in any way interested in how people make decisions it is so worth the time.

Dan covers a lot of ground in those 35 minutes - almost too much.  I've seen many of his examples of how our "decision brain" works in other documents, books and presentations, but he puts it together well.  I don't want to bore you by recapping the info in the video but the important elements of his talk are:

• Decisions are based on a simple formula - the odds we will get what we want times the value of what the end result is.  This is based on Bernoulli's expectancy formula.  Unfortunately, humans don't estimate odds well - nor do we estimate value of the gain well.  Because we don't do those two things well, the outcome from the equation doesn't always make sense.
• People calculate odds based on how easily things are remembered.  The easier we remember something the more likely we are to assume the odds are greater of that thing.  Even if it isn't.
• Value is influenced by past experience and its relationship to other things - both of which influence how much value we place on something.  The very interesting thing is that we estimate the value of something in context of other things - but - we experience the value of that thing without the influence of the thing that caused us to predict the value.  The two situations mean the value will different (can you say buyers' remorse?)

These issues have a lot to do with how you present the "value of behavior change."  An incentive program should focus on these issues.  First we need to make seeing the odds as good - in an incentive it's 100% since it's based solely on my performance and nothing else.  Second, we need to position the awards in relation with something else - ie: the pain of not getting the award perhaps?

There are many other ways this information could be used to help design a program - but I don't want to give away ALL our secrets.

All in all - a great 35 minutes. 

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