Setting an example to others. An eternal problem for managers is how to let all employees know what happens to those who perform especially well or badly. A few companies actually post everyone’s salary and bonus on their intranet. But pay is so one-dimensional. At Advice Inc., a problem that would hardly be mentioned at most companies — embezzlement — was undoubtedly the topic of rich discussions for weeks, at least until the employee’s cast came off. Any employee theft probably went way, way — way — down.
When the great Roberto Goizueta was CEO of Coca-Cola he used to talk about this problem of setting examples and once observed, “Sometimes you must have an execution in the public square!” But of course he was speaking only figuratively. If he had just listened to his own words, Goizueta might have been an even better CEO.
Differentiation. This is one of Jack Welch’s favorite concepts — the idea that managers should treat different employees very differently based on performance. Welch liked to differentiate with salary, bonus, and stock options, but now, in what must henceforth be known as the post-Provenzano management era, we can see that GE’s great management thinker just wasn’t thinking big enough.
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