Some of you have asked me about my choice of images for my  website. "What's with the stained glass?" you’ve asked. I thought we were talking about  aligning strategy, performance & rewards. Great question and the simplest  answer is: complexity. The paradox of order and disorder - one of the hallmarks of complexity theory, as I discuss in a previous post - comes into play when I speak of alignment in what Joshua Cooper Ramo refers to as the new 'revolutionary era.’  In a nutshell, old ways of thinking simply don’t cut it anymore.  Alignment means something very different today than it did not that long ago.

When I talk about alignment today, I think fluidity and  movement. I think non-linear. I think creativity. I think agile. And, paradoxically, I think deep infrastructure. I think strong lines. I think core.  The stained glass images represent this paradox for me. The images are a creative representation of my thinking on how alignment lives and moves in the 21st century, and while alignment remains pivotal to organization success, we must be willing to break away from some of the linear thinking of the past.  Towers Watson said it well when they stated in a 2012 report, "Companies are running 21st century businesses with 20th century practices and programs."

Performance & Rewards is an area in which old thinking abounds. Fixed salary grades, stagnant job descriptions, and annual performance reviews built on static objectives are just a few examples of antiquated programs developed in a time where hierarchy was revered and organization was analogized to a machine. I understand why they still exist; in past lives I've helped create and maintain plans that include these very elements! There are legalities and financial constraints that we simply can't ignore. However, the go-to solution is new wine in old wineskin. Folks, the wineskin is seriously leaking.

The key is the willingness to lean into this new idea of alignment in our ‘VUCA’ world (i.e., volatile, uncertain, complex, and ambiguous) as opposed to attempting to control it.  It’s not for the faint of heart!  Hence the necessity to build up your organization’s core – core mission, core competencies, core processes (communication being at the top of the list), core structure, core value proposition – while remaining agile and responsive to the broader environment.

There are ways we can begin to incorporate new thinking - a new way of aligning people, performance & rewards to the business strategy - into the way we do business and empower our talent. I have mentioned changing the dialog in previous posts, and this is a great opportunity to practice. One place to start is 'both/and' thinking. For example, we need to evaluate performance and maintain a feedback loop AND we have changing objectives throughout the year.   We have a finite pool of rewards dollars AND our headcount continues to increase. 

Rather than battling over which to address - which is often a welcome yet dysfunctional distraction from the issues at hand - we own that both are the reality and we start the conversation there.  Get people in a room together who don’t normally get in a room together.  Highlight the tensions and discuss them with openness and curiosity.    In this way, you begin to strengthen your organization's core and build capacity for new ways of thinking and communicating.  In essence, you create your own story of the stained glass.

We continue our series on the top ten reasons to join the efforts of Compensation and Organization Development (OD) for greater organization effectiveness.  I am not necessarily referencing a change in organization chart to have both disciplines report to the same manager (although I understand there have been a handful of cases where that has happened).  Rather, Compensation and OD have complementary competencies that, when leveraged together, enable greater, more successfully adopted large-scale change to help move an organization forward.  I am unpacking the top ten reasons Dr. Ed Lawler provided in his seminal work on the subject, Pay & Organization Development (Addison-Wesley, 1981).  Reason #5: Pay Policy & Pay Practice are Malleable.

According to Merriam-Webster, one of the definitions of malleable - best for this particular context of Compensation & OD synergy - is "having a capacity for adaptive change." Compensation strategies, design elements, pay practices, programs, and processes have nearly endless combinations to adapt to the business context - albeit constrained to some degree by legal and financial concerns.  That may be hard to hear given the constraints and given the, "that's how we've always done it" corner into which we sometimes paint ourselves.  Yet the truth is that, by and large, design elements within compensation initiatives can take many different forms.

Case in point:  A large computer entertainment organization had found a great stride in its business strategy, customer loyalty, and value proposition to shareholders and employees alike.  It was a very successful organization.  One of the reasons for its success was taking full advantage of rewards initiatives to help steer the rudder in the direction the company wanted to go.  Each year, key stakeholders would meet with HR, OD, and Compensation in a facilitated dialog to discuss The Next Big Thing (TNBT).  While there were both long- and mid-term plans charting the course, TNBT would help guide the next twelve months resulting in the development of healthy performance goals and custom rewards programs.

Cut to the chase: Each year, it was crystal clear where the emphasis had been placed.  The organization was able to run analytics to show the gains in margin, cost management, new product offerings, inventory reduction - wherever leadership had pointed TNBT.  They used the malleability of rewards programs in concert with getting the right people in the room to facilitate healthy dialog, to expertly steer the ship and its crew to their desired destination.  And because OD now knew the future direction toward which behaviors would be pointed, they could craft their efforts to complement, rather than conflict with, the business strategy.

How are you taking advantage of the malleability of rewards and the partnership with OD to help guide your organization in its desired direction?