Is Your Staff Meeting the Company Goals?

When a major issue arises, is everybody at your company serving the same interests? Or is one person serving the engineering team, another person serving the sales team, one board member serving the VC fund, another serving the early-stage angels and another serving the CEO? If thats the case, then your team is misaligned. No individual departments interests are as important as the companys.

To align everyone behind your companys interests, you must first define and communicate those goals and needs. This requires five steps:

1. Define the mission. Be clear to everyone about where youre going and how youre going to get there (in keeping with your values).

2. Set annual priorities, goals, and targets. Turn the broader mission into something more concrete with prioritized goals and unambiguous success metrics.

3. Encourage bottom-up planning. You and your executive team need to set the major strategic goals for the company, but team members should design their own path to contribution. Just be sure that you or their managers check in with them to assure that they remain in synch with the companys goals.

4. Facilitate the transparent flow of information and rigorous debate. To help people calibrate the success, or insufficiency, of their efforts, be transparent about how the organization is doing along the way. Your organization will make better decisions when everyone has what they need to have frank conversations and then make well-informed decisions.

5. Ensure that compensation supports alignment (or at least doesnt fight it). As selfless as you want your employees to be, theyll always prioritize their interests over the companys. If those interests are aligned especially when it comes to compensation this reality of human nature simply wont be a problem.

Taken in sequence, these steps are the formula for alignment. But if I had to single out one as the most important, it would be number 5: aligning individual incentives with companywide goals.

Its always great to hear people say that theyd do their jobs even if they werent paid to, but the reality of post-lottery-jackpot job retention rates suggests otherwise. You, and every member of your team, work for pay. Whatever the details of your compensation plan, its crucial that it aligns your entire team behind the companys best interests.

Dont reward marketers for hitting marketing milestones while rewarding engineers to hit product milestones and back office personnel to keep the infrastructure humming. Reward everybody when the company hits its milestones.

The results of this system can be extraordinary:

• Department goals are in alignment with overall company goals. Hitting product goals shouldnt matter unless those goals serve the overall health of your company. When every member of your executive team including your CTO is rewarded for the latter, its much easier to set goals as a company. There are no competing priorities: the only priority is serving the annual goals.

• Individual success metrics are in alignment with overall company success metrics. The one place where all companies probably have alignment between corporate and departmental goals is in sales. The success metrics that your sales team uses cant be that far off from your overall goals for the company. With a unified incentive plan, you can bring every department into the same degree of alignment. Imagine your general counsel asking for less extraneous legal review in order to cut costs

• Resource allocation serves the company, rather than individual silos. If a department with its own compensation plan hits its (unique) metrics early, members of that team have no incentive to pitch in elsewhere; their bonuses are secure. But if everyones incentive depends on the entire companys performance, get ready to watch product leads offering to share developers, unprompted.

This approach can only be taken so far: I cant imagine an incentive system that doesnt reward salespeople for individual performance. And while everyone benefits when things go well, if your company misses its goals, nobody should have occasion to celebrate. Everybody gets dinged if the company doesnt meet its goals, no matter how well they or their departments performed. Its a tough pill to swallow, but it also important preventive medicine.

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