Why You Shouldn't Reward This Kind of Problem-Solving
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Why reward someone if they solve a problem they created?

"Lose a million dollars in your first month."

That's the advice I shared with a friend who joined a new company to oversee risk management.

"But I'll get fired!" she replied.

"No, you'll be a hero by your third month once you've solved it," I said. 

First, I am certainly not advocating dereliction of duty. I share this story to illustrate a mistake that I see companies and managers make: rewarding "the comeback". 

How many of these situations have you seen?

  1. The manager who is praised for firing a problematic employee… who s/he hired a year ago. 
  2. The sales leader who executes a major re-organization… because sales missed the previous revenue target.
  3. The employee who receives the "courage" award for a public apology…after sloppily leaking a product roadmap. 
    This is not isolated to the workplace, either. I see the same archetype in athletics, politics, and with celebrities. In each, the person is commended, and often rewarded, for persevering. However, in almost every case, s/he could have avoided the problem in the first place.

The Real Heroes

We never talk about these problem avoiders. They’re the real heroes. 

Outside of work, I love the comeback story. As a business leader, I hate it. Because comebacks require extraordinary resources - resources that could instead be applied to growing business. 

After years of rewarding the comeback, I've shifted my focus.
Here are a few of the practices that I use:

1. Commend the absence of problems. I make this an explicit section of performance reviews to show my team I care about it. Which accounts did your team not lose to the competition? Which candidates did you NOT hire?

2. Do not reward someone for fixing a problem s/he caused. Solving the problem is better than letting it fester. So I still say 'thank you.' But I don't go beyond that.

3. Reward the "quick save". Mistakes happen. Reward the people who recognize and fix them quickly, before the problems become a real story. As an example, one of my teams prevented a multi-million dollar billing issue before it happened. I awarded them our department's largest award.

4. Prevent sequels. Embrace feedback by encouraging teams to discuss things that haven’t worked in the past and how others in the org can avoid them.

5. Create positive metrics. Groups like Accounting and Risk Management are like goalies in soccer, they’re only noticed when they make a mistake. Instead, create positive metrics for these groups - just like ‘saves’ in sports. When I ran a fraud prevention team, we wrote goals like "Have 2 or less major incidents and less than 5 minor ones." It acknowledged a reasonable level of mistakes would happen, but framed it positively.

Almost every business owner I speak with tells me they want to win. And that winning is measured in real results and not 'style' points. 

So as leaders we need to stop rewarding the style points, and start rewarding those who preserve energy for just winning.

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