Alignment: A Great Management Tool

An entrepreneurial friend told me about some early challenges at his company. The team wasn’t being efficient or consistent about completing work. This created at least two problems. First, the longer it took to complete the work, the less satisfied the customers were (and the less likely they were to refer other people to the company). Second, the longer each job took, the more it cost because employees were paid by the hour. After months of talking to his team, he found the solution.

He changed the compensation structure. He began compensating his team for completed jobs. The fewer jobs they completed, the less money they made. The more jobs they completed, the more they made. My friend noticed an immediate impact. His team’s productivity went through the roof. Over time, his team made more money and his business saw increased revenue and profit. Customer satisfaction increased too.

Keeping a team aligned is difficult. Everyone moving in different directions or moving at different speeds is stressful for the founders and could even sink the business. If everyone is moving in sync and in the same direction, the employees can have more autonomy and the business can reach new heights.