Discover more from Lance's Letter
Highlights 2020: Week 23
Tire moguls, the subject of work and incentives
Update: we’ve finished a big round of hiring at work. We got >1,200 applicants and ended up making 8 hires. Here’s the funnel we used.
It’s kept me thinking about hiring as leverage and what the real point of work is.
[...] the primary basis of the value of work is man himself, who is its subject. This leads immediately to a very important conclusion of an ethical nature: however true it may be that man is destined for work and called to it, in the first place work is "for man" and not man "for work".
[I]n the final analysis it is always man who is the purpose of the work, whatever work it is that is done by man-even if the common scale of values rates it as the merest "service", as the most monotonous even the most alienating work.
John Paul II, Laborem Exercens (emphasis added)
Since I studied engineering, I default to systems thinking. I label. I assign dollar values to the cost of hiring a replacement for a difficult employee. I try to come up with systems that generate a profit.
But, as cliche as it is, profit just isn’t enough to keep up long-term motivation. I just don’t have a whole lot of things I want to buy!
When I first read this document I was doing a year of mission in Chile. It was a lightbulb moment for me. Maybe I’m not helping cure cancer, but I can help people improve in their work.
Our cheesy, but true mission as a company is “To be a stepping stone for where our employees are being called by God”. Selfishly, I want to help my employees become the best versions of themselves. On a superficial level, because it makes them work better. But on a deeper level, because I feel like these are eternal beings that I’m going to hangout with for longer than forever.
What does this look like in practice, though?
Some of it is trying to encourage skill growth. But a lot of it is about giving them agency.
TO ALL STORES… If a bright, young, ambitious man joins our company and wants to make our company his career, does he do it because he likes Norm Nelson and wants to help Nom, Gordy, or Bob, or Denny? Do you men think that some little fairy sent you this man just to help you build your bonus? Do you think that his man is going to work ten hours per day, miss meals, have ungodly hours at home, just to help you build your stores? Do you think this man is going to work for low pay, year after year, just so that you can build your profit share contract into a nice fat nest egg??? No, I don’t think so. He wants to see results, just like you did when you started up the ladder.
Les Schwab, of Les Schwab Tire Centers (source)
Some good news/bad news for employee development and motivation:
The bad news is, you can’t give someone intrinsic motivation.
The good news is, you don’t generally need to. When I ask my employees, they’ve got something they’re working on. It might be lofty like a documentary on women businesses in poorer areas, or maybe just some financial breathing room for their family, but they’ve got something.
As an employer, or better yet, business partner, it’d be intractable for me to try and barter my way to a direct compensation model (e.g. “I’ll pay for your documentary if you bring in five sales”).
But it is possible to give them a level of control over the quantity of resources they direct toward their projects.
The two main resources are simple: time and money.
In my experience it’s not so much about the quantity of either as much as their ability to impact them.
A red team is a group that helps organizations to improve themselves by providing opposition to the point of view of the organization that they are helping. They are often effective in helping organizations overcome cultural bias and broaden their problem solving capabilities.
Wikipedia, “Red Teams”
The other great thing about performance compensation is, it shows what you truly value as a business. There’s a lot of lip service around red teams, but oftentimes seem like checking the block.
That said, there are some areas where red teams are phenomenal (like ethical hacking or bug reporting).
Where’s the disconnect?
My guess is it’s an incentive mismatch.
Two examples of where red teams work:
Military red teams. They’re trying to make the other team look bad. The spoils are tons of bragging rights and pride in being the best. Not much need for extrinsic motivation.
Sports. Good losers are people who don’t freak out when they lose. But no one likes losing.
As a Catholic Christian, I've gotten value from a militant atheist's arguments. We both want to find the truth and not sugarcoat things.
But, without a real incentive I worry it's just a formality.