Published in the San Diego Union-Tribune, January 16, 2023
by Neil Senturia
“What’s in a name? That which we call a rose by any other name would smell just as sweet.”
— Romeo and Juliet
Yeah, try telling that to the person you want to hire who wants a VP title and you want to give him the title of director. You give him/her the “Hey, it’s a startup, titles don’t matter, we are all in this together” etc. — not true. And frankly, if the person you are hiring is in the woman/diversity category, that line is often used in an effort to underpay.
You say you want to inspire innovation in your team. OK, then let’s look at job titles courtesy of Susanna Gallani, professor at Harvard Business School. The bottom line here is a bit surprising. It appears that how you pay people has a very close correlation to the innovation you can expect from them. Gallani says that focusing an employee on a “particular task” might create unintended consequences, i.e., the employee does the job he is labeled and paid for — but does no more.
If I understand the specific task and how my pay is a function of my success at that task, then my inclination to “think outside the box” has no upside. Keep my head down, hit the mark, be a team player and make money.
Now, this innovation dilemma is most thorny when designing compensation for salespersons. Once the salesperson figures out how the commission works, he can own you. And that doesn’t mean the company will do well, it simply means that the salesperson will.
Gallani says, “Companies want more employee-initiated innovation, but it has proven very challenging to obtain.” The question is — will my innovation suggestion get me a better title or get me fired?
One solution is variable pay compensation. How can a company reward “innovation” without unbalancing all the required max/min pay scales tied to titles? Maybe stock options or phantom profit points?
Even more nuanced is how to measure the idea itself. For example, you might get “narrow-scope innovations” in a specific task, i.e., how to make the widget a bit faster than previously. But what you don’t get is thinking about how to move the company from widgets to electric cars. Real innovation threatens the status quo.
Why stick your neck out, when maybe only one in 10 “ideas” might even be considered? I believe it rests with the CEO and how he/she backs up words with deeds. They need to create an atmosphere in which there is less fear — whether fear of reprisal or fear of appearing stupid or fear of failure.
Here is one idea from me. Perhaps once a month, dig stuff out of the suggestion box. Tell the team the suggestions and allow for input and modification and discussion. And if implemented, then proper compensation/reward must follow. Leaders talk about transparency and culture ad nauseam. Put it into practice.
My first software company was successful because a junior “nobody” flew home from an assignment and came up to my office and said, “keep the software, lose the kiosk.” (And I think he also added something about cannoli.) His job title was meaningless, but I know that he got a massive stock grant.
That leads to the infamous “trust me” speech where the CEO promises he/she will remember where the good idea came from. This is the mantra of the startup CEO who knows that compensation packages are a bit awkward and things are in flux, but you must instill the belief that innovation will be rewarded. You cannot ask for trust and then not reward that trust.
As for my experiment with talking to my readers, let me share a few of their recent thoughts.
“I construct each day on gratitude and service. That’s how to build a new life, I’m told.” — Nina G.
“In order to seize the day, you must have purpose in life.” — Elly L.
“There are two days you can’t get anything done — yesterday and tomorrow.”
— Joseph C. (courtesy of the Dalai Lama).
“In my ninth decade, I told my grandchildren, seize the day and you can do anything,” — Larry B.
“San Diego is my town and I therefore must take responsibility for making it better. I have chosen homelessness as my cause.”
— Bruce H.
Rule No. 745
Keep those cards and letters coming.