Sense and Respond: How Successful Organizations Listen to Customers and Create New Products Continuously

by Jeff Gothelf

Perhaps the most challenging and difficult objection to overcome is your company’s reward and compensation structure. At the end of the day, your staff and, most important, your middle managers will do what they get paid to do. If your company’s bonus and promotion structure rewards on-time, on-budget delivery, the teams will optimize for delivery. If your salespeople promise features and bake those promises into contracts, your teams will have little opportunity to change course in the face of learning. This is the industrial-age factory model applied to modern, technology-driven products: rewarding people for making things rather than rewarding them for making the right things. It functions based on the continued belief that digitally powered products and services can and should be stamped out like parts on an assembly line. The faster and cheaper we can do that, the more we’ll succeed. This belief manifests as managers explicitly telling staff what to do. It’s still the dominant model in most companies.