Incentives, Accountability and Team Politics

October 2015

This post is a draft. Content may be incomplete or missing.

Brain dump:

Say you’re becoming a skip-level manager, so now you’re a manager in charge of other managers. To put it simply, your job is to make sure those teams work together as effectively as possible.

One way to get started: take a look at your inter-team incentive structure. Keep an eye out for incentive structures where somebody is not being held accountable for what they produce. It’s not acceptable for the only incentive to produce high-quality output is not getting yelled at by another team, since that breeds unnecessary politics. Instead you want things structured so, if a team produces low-quality output, the low quality hurts them the most severely and most immediately. For such a team, the path of least resistance is to do it right the first time, or to fix problems as soon as they appear.

The nice thing about this is you can do this without having to worry anything about who works on the team and how they get their work done. You can consider only what happens if everyone on each team just follows the path of least resistance. Makes this is useful analysis technique.

This is useful for reducing unnecessary inter-team politics. One common cause of politics is an imbalanced incentive structure – you can think of the politics themselves as an attempt to change the incentive structure.

In small companies / startups, it’s not uncommon to have ‘full-stack’ teams. As companies grow, though, these teams tend to sub-specialize into teams which each own parts of the stack and work together to compose the product. A full-stack team is more likely to get immediately burned by their own shortcuts, and thus will be less likely to take them if the risks outweigh the benefits. However, once they start to subspecialize, you can get into situations where a shortcut on one team burns another team. Politics are the only way the burned team can de-incentivize the giver team from taking those kinds of shortcuts.

As an organization grows and teams specialize, it’s probably not possible to eliminate all of these sorts of unaccountable incentive structures, but it is highly likely some team structures will have less of this kind of problem than others.

This is also just one factor in the big picture; a team with a perfect incentivie structure where any bad decision only burns the person who made the bad decision, can still have other problems, like under- performers and bad fits. Ultimiately this is a useful tool, but not a silver bullet.