I had spent years designing the most interesting, state of the art, thought leading (atleast so I thoughtJ) incentive schemes for some of the leading corporate houses across Asia. Here I was working with the promoter of a mid cap company in back and beyond of South East Asia. The promoter must have been in his late 50s and his young and so unenergetic son in early 30s (damm he looked much younger though).
We had a series of some very interesting board room discussions with the promoter and his top management team. Like a good consultant I had managed those workshops debating the concept with the team, articulating what will work well and what will not work well, ensuring participation from all members. We had some very interesting conversations to say the least. I was very amused with the uncle promoter during the discussions. He had a interesting way of constantly shaking his head whenever talking….his head movement would almost give his comments first followed by verbal explanation. The theatrical expressions were both good and bad….good because atleast I knew he was listening and involved….bad because I had no idea how much was he understanding. The discussions anyways went on and we finished the design successfully as we say in consulting.
Just when I was beginning to start feeling good about the successful design the promoter asked for me in his room. What followed was the most educating 60 minutes for me. The promoter came down straight to the point and asked me how much money he will need to shell out in the scheme and how much money will the business make. He articulated in what I call as “Lalaji’s business book” how much money he would be willing to pay if business achieved XYZ million. He even articulated if business did not meet the target how much will he be willing to pay, however with a strong message that “he is sad”, or if business exceeded then the message “I am very happy”.
In simple yet very effective language we almost redid the entire scheme in those 60 minutes of discussion. We managed to get around a healthy negotiation on almost all aspects of the scheme in that time. This discussion taught me some invaluable lessons:
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The greatest impact of the scheme design is not in how strategic it looks but how simple it looks
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Whatever can be done on 2 pages of paper is best kept that way…..creating 100 pages to explain the same concept in detail will almost guarantee itself to a disaster
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Instead of putting effort in getting others to understand your style and language, its best to understand and talk their language
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As much time one spends on working out a different and interesting model pf reward and payout, one must spent in detailing how will life be different for employer and employee…else another formulae is all it is
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It does not matter if your books tell you there are 10 different reward strategies….if you understand the desired financial impacts of all parties involved well you can almost draw infinite number of strategies
So much so for that 60 minutes fame….
Rohit
Rohit Jain