Designing new compensation plans. Many of us are in the final throes of this activity as we roll into the last month of the year. Perhaps it would help us to step out of our HR heads for a few moments and take a page from the playbook of Harvard Business School professor Clayton Christensen, author of The The Innovator's Dilemma and How Will You Measure Your Life?, and regarded as one of the world's foremost authorities on disruptive innovation.
Christensen advocates approaching product design and planning with what he describes as a "job-to-be-done" point of view. As he says:
The jobs-to-be-done point of view causes you to crawl into the skin of your customer and go with her as she goes about her day, always asking the question as she does something: Why did she do it that way?
To illustrate this approach, Christensen shares the story (in his MBA course) of a fast food restaurant that wanted to improve its milkshake sales. The company tried looking at the challenge using the demographic segmentation approach favored by marketers (who is the typical milkshake drinker? what do they like in their milkshake?), but had no luck in improving sales. The company then engaged one of Christensen's colleagues, who approached the situation by trying to learn what "job" the customers were "hiring" the milkshake to do. He describes the experience in the interesting - and entertaining - video below.
At the center of this experience is a fascinating mind shift, a way to frame design problems in a whole new light. Perhaps we could benefit from such a shift in perspective as we go about our business, assessing how well our pay programs work and attempting to make them better.
Looking at it from the perspective of one of our most basic "products", the base salary structure, we could ask our key customer, the line manager:
- For what job does the typical manager "hire" the salary structure - what are the circumstances under which they consult it and what are they hoping to achieve?
- When does it do the job well, and when does it not rise to the occasion?
- When do they have to "hire" other tools to get the job they are trying to do done? What other tools do they turn to and what sort of help do these tools provide? Or are they forced to "jerry-rig" the structure in order to get the job done?
And yes, we may need to dig and push around a bit (or to use Christensen's words, crawl under the skin) to get to the true job the manager needs to get done, as many of them are attempting to hire that structure to simply help them circumvent salary policy and budgets in order to simply maximize the money they can give subordinates. Perhaps this can tee up an opportunity for mutual exploration, education and understanding.
At any rate, I find Christensen's framework an interesting one with which to engage our customers in attacking some of our thornier design problems. What about you?