What Is Incentivized Is Policy

There is a saying in politics: “Personnel is policy.” This is as true in a corporate setting as government. Marcus Cauchi, a Fractional CRO of several tech firms, points out that when improving a company’s sales organization, a common recommendation that comes back is, “You need to fire your top salespeople.” Why?

Well, again, personnel is policy, and your stated values don’t matter a hill of beans in comparison to who you are rewarding as your “top performers”. Consider all the corporate culture transformations out there, all the organizations broadcasting what their explicit “values” are. Such stated values can serve as aspirations and guideposts, but all too often they end up ringing hollow.

When an org’s stated values do not match its behavior, it is incongruent. This is important because…the employees always know. It stinks and they can smell it. We can here restate our principle from above: What you incentivize is your policy—all else is lip service. When the behavior getting rewarded doesn’t match stated values, people can tell you’re bullshitting.

In his book, Sales Success Stories, Scott Ingram shares some things he learned from Alex Shootman, former CRO of Eloqua, later CEO of Workfront. Shootman has a framework he calls, “Getting It Done and Doing It Right”. It’s a 2x2 matrix. In the top right are people getting results while engaging in the right behaviors. They, unsurprisingly, should be rewarded.

By rewarding the people role modeling what you think your culture ought to be, you start to bring your “Is Culture” more in line with your desired “Ought Culture”. At the bottom left of the framework, the people engaging in the wrong behaviors who aren’t producing results should be let go. So far, it is all as expected. Now let’s look at what for some is the first surprise:

If people are role modeling the right behaviors but are not getting results, you don’t fire them. You get them coaching and help them grow. In short, you should not be rewarding people for unpredictable outcomes—you should reward people for doing the right things. By doing this, you yourself role model that the organization’s values are more important than sheer value. This signals that “Ought Culture” actually matters. This brings us to the top left, which is the most revelatory part of Shootman’s framework:

So, why “fire faster”, as in, these people should not only be fired, but fired like yesterday? After all, they’re getting results! Remember, what is incentivized is policy…and all your employees know this deep down. Your “Is Culture” is dominated by your ultra-high performers. If they are not role modeling the right behaviors, then by keeping them around, the message you are sending is that your “Ought Culture” is just lip service.

Let that sink in.

Now, I believe Shootman’s framework has an interesting implication I haven’t seen called out elsewhere. Many of your most toxic employees are probably high performers. (If they weren’t, then they probably would have been fired already.) These are the people who have learned how to play the game and play it at the expense of those around them. And rewarding them for their behavior perpetuates toxic culture.

Now, do you really think the results of few toxic high performers generate more value than the opportunity cost of demoralizing those around them? Not likely. Toxicity flows downhill and it isn’t stopped by lip service. Consider all the value lost by choosing the results produced by bad actors over improving your culture in a way that lifts all boats. Have you considered the cost of delay of not firing these people? It’s massive.

This notion of “organizational incongruence” extends beyond culture toxicity. It applies to any area where, as Gerald Weinberg puts it in The Secrets of Consulting, “Your words don’t match your music.”

You get more of what you reward, period. If what you’re rewarding is at odds with what you verbally call for more of, then you don’t really want what you call for more of.

Why? That’s right. Because what is incentivized is policy.

Until next time.