SmartPulse — our weekly nonscientific reader poll in SmartBrief on Leadership — tracks feedback from more than 220,000 business leaders. We run the poll question each week in our newsletter.
How well are your people’s incentives aligned with your organization’s strategy?
- Very well: there’s a clear link between strategy and incentives: 14.0%
- Well: incentives are generally linked to strategy: 30.5%
- Not well: it’s unclear how strategy is tied to incentives: 37.8%
- Not at all: our incentives have nothing to do with our strategy: 17.7%
Incentives drive behavior. Behavior drives strategy. An alarming percentage of you report there’s no link between your strategy and your incentives. That’s a problem. People do what they get paid to do. If you want your strategy executed, you need to align incentives with achieving those strategic goals. The stronger the link between strategy and incentives, the more likely you are to drive behaviors consistent with your strategic direction. When you notice misalignment between incentives and strategy, drive clarity quickly. Involve your compensation and HR teams in the conversation when you set strategy. If you don’t, don’t be surprised when people are working on things that have nothing to do with your strategy.
Mike Figliuolo is managing director of thoughtLEADERS. Before launching his own company, he worked at McKinsey & Co., Capital One and Scotts Miracle-Gro. He is a graduate of the U.S. Military Academy at West Point. He’s the author of three leadership books: “One Piece of Paper,” “Lead Inside the Box” and “The Elegant Pitch.”