Management Matters - ' Tying Alignment Goals to '

Tying Alignment Goals to Compensation Can Boost Progress

"People knew their pay was tied to [success], so they came to our meetings sometimes—even if they just wanted to hear us argue."
David Goudge, senior vice president of marketing, Boise Office Solutions, Boise Cascade Corp.

Money also talks. More and more companies are using incentives in pay to get IT and business people talking to each other about business strategy—and sometimes, to attend regular meetings on strategy.

That's been a key factor of success in Canada Post Corp.'s five-year, $300 million (Canadian) technology overhaul to help CP compete with stiff competitors like UPS, said Aaron Nichols, CP's general manager of business transformation. From the very beginning, executives were paid to take part in the digitization and e-logistics project. To make sure it would work, CP created a panel called the Business Transformation Management Committee that was chaired by the executive vice president of business development. The team of nine vice presidents has been meeting for three hours every week for more than two years. "To get nine vice presidents to commit the bulk of their Monday afternoon for more than 104 weeks running is no small task," Nichols told the conference. At some companies, Nichols said, a lot of projects are kicked off with "lots of executive support. Everybody stands up and cheers—and then people start distancing themselves from it and hope it all goes away." But this one? "These guys have stuck with it," he said.

True, many people wanted to see the project get off the ground. But just to make sure everybody kept talking to each other, roughly 10 percent of their compensation package was tied to the success of the project, and "the company had a very interesting way of measuring that 10 percent" across the executive levels, Nichols said. "In our company, we've used that technique a great deal to get projects moving."