shutterstock_402390781.jpgA nightmare that has likely woken up many an Oscars producer in a cold sweat became a reality at this year’s awards ceremony: An Oscar was awarded to the wrong nominee. As we all probably know by now, announcers Faye Dunaway and Warren Beatty mistakenly awarded the Oscar for best picture to the producers of La La Land, but the producers of Moonlight were the true winners. This mistake was an embarrassing moment for the Academy of Motion Picture Arts and Sciences and many others.

As I watched the stunning events unfold, it was a reminder of the potentially catastrophic consequences of breakdowns in operational processes. My ZS teams support our client partners to manage the performance measurements and incentive pay calculations for their field forces. As anyone in a similar position can attest, the expectation to operate at 100% accuracy is very real. Just as a producer may fear the worst-case scenario of awarding the best picture Oscar to the wrong film, the thought of announcing the wrong winner of President’s Club (or other annual recognition program), for example, is similarly gut-wrenching for the owner of the sales compensation calculations. No one wants to receive the call: “We made an error in our calculations and selected the wrong rep as our President’s Club winner. What do we do now?”

Building the field’s trust in the sales compensation program requires that the reps believe that they’ll be measured fairly, and that they’ll be accurately and appropriately compensated for their performance. In fairness to PwC—the firm that manages the award show’s ballots—the company hadn’t made an error in 82 previous Academy Awards ceremonies, an impressive model of perfection that few people outside of PwC are talking about at the moment. Just as PwC’s reputation has—rightly or wrongly—come into question for the moment, one high-profile mistake risks lasting damage to the credibility of the sales compensation program, which is critical to driving field motivation and keeping top performers engaged and committed to the company.  

The stakes are very high, so what are some strategies that sales compensation teams can build to minimize the risk of errors and damaged credibility?

  1. Robust systems and processes: Identify the minimum set of tasks required to successfully complete the key objectives. Build a lean process that maximizes efficiency and minimizes the risk of errors. Develop a clear process map to outline the process inputs, linkages and outputs. Make sure that ownership of all tasks and dependencies is clear and well understood. For complex processes, resist the temptation to manage them in Excel. The operational controls of more sophisticated systems that will adapt to changes more effectively will benefit you in the long run. 
  1. Checklists: As Atul Gawande argues in his 2009 book, The Checklist Manifesto, checklists improve the outcomes of complex processes from surgery to piloting an aircraft to skyscraper construction. They’re not just for simple tasks and are even more essential for complex processes that require effectively tracking and managing numerous inputs, steps and ad hoc changes. Every sales cycle, sales compensation teams face pressure to deliver performance results to the field sooner. It’s imperative to provide the field with prompt performance updates to drive motivation and engagement, and also to allow opportunities for course correction when needed. Checklists ensure that you follow every step in the process in the appropriate order when working quickly to meet these critical demands. Not following a checklist risks missing one step and derailing the entire process.   
  1. Automation: To err is human. Build in as much automation and remove as much human intervention as feasible from the process. Manual processes are an error time bomb waiting to go off. Upfront investments in automation will pay huge dividends by reducing the painful cost of communicating errors and fixing them through reruns.

The Oscars flub is an opportunity for all sales compensation teams to take a step back and reflect on their programs. Is your process streamlined and managed within the appropriate systems? Are manual processes and handoffs putting you at risk for mistakes? Putting the right checks and controls in place will dramatically reduce your risk of errors in performance results, and will help you sleep well at night.


BLOG POST: Why Checklists Are Critical for Pilots, Surgeons and Sales Comp Administrators

BLOG POST: When Bad Incentives Happen to Good People 


Topics: sales comp program, sales comp, Jason Huhn, La La Land, accuracy, Oscars 2017, Moonlight