Senior Management Incentives in the News

Strategic incentives are a good idea at the top.  But getting everyone one in a large company on the same page is difficult, and it doesn’t always work.  Here are a few current examples:

  • United Airlines’ CEO Oscar Munoz reportedly has $500,000 of his bonus tied to customer satisfaction questionnaires.  You’d hardly know it from the nearly unbelievable physical ejection of a passenger, and United’s follow-up to the incident.  Some background:  In 2010, United began a botched merger with Continental.  In 2012, United had 43% of all airline consumer complaints, and has been a leader in complaints since then.  On January 14, 2016 Bloomberg’s article, “United’s Quest to be Less Awful” was published.  Clearly things have needed to change for a long time.
  • Apple’s Tim Cook made less money last year (only $10 million in salary and bonus!) than the year before.  That reflects the downward trend of the iphone business, which might pick up this year with a redesigned phone.  But Cook isn’t betting on riding the iphone into the future.  As in the past, the company’s prospects are secret, but you can bet they are working hard on innovation and disruption in other industries, continuing the path that Apple has taken throughout its history.  That’s what his focus and challenge is, and what his future bonuses will depend on.
  • Ford Motors’ board wants CEO Mark Fields to accelerate the company’s transformation and profitability beyond SUVs and pickups.  They’ve put into place a $2.5 million “strategic incentive grant” designed to reward both innovation and growth.  He received a reduced bonus last year as revenue and quality slumped.  The board realizes that making the core business more profitable won’t be enough — they need innovative solutions for the future.

Obviously, sometimes incentives get everyone on the same page, and sometimes they don’t.  Even the largest companies can’t seem to nail it, in part because transforming such large companies is a significant challenge.  But significant incentives can provide significant focus at the top.

What kinds of incentives are you using at the top?  Are they operational or strategic?

© Copyright 2017  Bob Legge

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Bob Legge provides organizations with the ability to exceed their most ambitious goals.  I work with leaders of Fortune 500 companies, small and mid-size companies, nonprofits, education, and government. Together, we drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.  Contact him at  bob.legge@leggecompany.com

10 Ways to Eliminate Mediocrity in Your Organization

An organization that accepts mediocrity is a haven for under performers, and very frustrating for high performers.  Here are ten ideas I found in my work with organizations are each effective in reducing mediocrity.  Best of all, you can put any of these ideas to work immediately.  If you can accomplish 8 to 10 of them, you’ll sharply-focus your organization, reinforce strong accountability, and dramatically improve operating results.

  1. Improve your hiring selection process to focus on behaviors that support your culture, as well as a performance track record, and an attitude of learning and growth. One of the best ways to improve overall quality of results is to make sure that you don’t hire problem performers.  Set a goal to always hire individuals who are better than your average performer, that way you’ll constantly be upgrading your talent.
  2. Educate all your managers, especially at the top, about how they should lead, manage, and coach their people. Create “the way we manage people here” mentality along with specific guidelines and company leadership values.  Too often organizations don’t do this and managers end up ‘doing their own thing.’  That’s not good quality people management.  A smart practice is to ensure that every manager has a people-related accountability and performance objective.
  3. Continually improve your strategy development process so that you have a clear direction and overall performance objectives. A good process for creating strategy involves key people so that they all understand it, contribute to the development, have buy-in, and can continually reinforce it throughout the organization.
  4. Make a conscious effort to communicate strategy throughout your organization so that know what to focus on in their daily work to help achieve the strategy. You want an organization where everyone understands where the organization is going and how it expects to get there.  I’ve seen companies not communicate strategy because they think their strategy is so confidential.  Hogwash!  How are your people to know what they are working towards if you don’t tell them.
  5. Develop a goal-setting process that aligns effort and results on key metrics. Setting overall goals and specific objectives is where the rubber meets the road.  You’ve got to translate the strategy into specific goals and objectives for groups and individuals.  Schedule goal setting to begin the year with goals; not 3-4 months after the start of the year.
  6. Provide regular performance feedback (“Here’s how you’ve done.”) and performance feed-forward (“Here’s how you can be more effective going forward.”) Of the two, feed-forward is more effective in improving performance.  Regular feedback is at least monthly, not annually.
  7. Understand that newer employees, those working remotely, recently promoted, and longer-term employees all have different needs for feedback — one standard approach is unlikely to work for   In short:  Know how much feedback each person requires.
  8. Create a system where people can track their own results and get feedback from their peers on where they stand, what they are doing well, and how they can be more effective. Incorporate your own organization’s best practices.  Make this a dynamic system.  There are some great tools available to automate this process and implement a ‘social media’ kind of performance feedback system.
  9. Identify under-performers early. Give them candid feedback, specific improvement objectives, and the opportunity to improve.  When you have a performance problem, determine whether it is a skills issue or a motivation issue — the solution is quite different for each.
  10. Develop a standard separation process to exit people from the organization while treating them fairly and with dignity. Separating people is never pleasant, but a good process will make it easier.

Stop procrastinating about this whole issue — begin today.  The best time to begin is now because every day you wait is another day that you are not getting the results you need, and another day that your best performers wonder if things will ever change.

If you want to get off to a fast start, call me and together we’ll put together a plan to immediately get better results.

© Copyright 2017  Bob Legge

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Bob Legge provides organizations with the ability to exceed their most ambitious goals.  I work with leaders of Fortune 500 companies, small and mid-size companies, nonprofits, education, and government. Together, we drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.  Contact him at  bob.legge@leggecompany.com

Are You Enabling Mediocrity in Your Organization?

Mediocrity is bad for a number of reasons.  Workplaces that allow mediocrity also de-motivate high performers.  And tolerating mediocrity reduces an organization’s energy and productivity, as well as employee engagement and satisfaction.

No one hires good people every time.  You will hire false positives.  The key is what you do about it, and the ones to be concerned about are the mediocre hires.  The truly bad new hire — who does not perform well or doesn’t fit the culture — can be addressed fairly quickly, but a mediocre hire will often be allowed to continue on.  Yet the difference in performance between a mediocre performer and a high performer is significant; and the difference adds up over time.  So address the mediocre performers:  Develop their skills to be good, solid performers; or move them to a position that better fits their abilities; or separate them.  Both of you will be happier in the long-run.

I’m not saying that all employees should be high-performers, but the majority of your people need to be solid contributors, and wanting to learn and grow.

Watch for my Executive Insights newsletter for many more tips on how to address mediocrity in an organization.

© Copyright 2017  Bob Legge

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Bob Legge provides organizations with the ability to exceed their most ambitious goals.  I work with leaders of Fortune 500 companies, small and mid-size companies, nonprofits, education, and government. Together, we drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.  Contact him at  bob.legge@leggecompany.com