Today’s essay weaves 2 threads:
- Incentive systems
- What do I do at Gusto?
XP is an incentive system, encouraging and rewarding visible progress and social connectivity. The four rules of simple design are an incentive system. So is TDD. And TCR.
As a long-time EconTalk listener I am keenly aware of the power and prevalence of incentive systems. Money is the most obvious incentive but status, autonomy, responsibility and a host of internal incentives also shape behavior. When I want to change my own behavior, changing my incentives generally works better than apply raw willpower.
The second thread on today’s loom is my Gusto job description. I’ve been trying to describe what it is I do since before I arrived a year ago. In our Series D press release (great timing!), CEO Josh Reeves described me as “Software Fellow and Coach”. I’ve described myself as Gusto’s Productive Irritant. But what is it I do?
There isn’t a title for my job. The closest analog might be Keith Adams’ Chief Architect role at Slack. Broad responsibility — for me improving the flow of value through engineering, product, and design, for Keith the evolution of the technology platform. No formal authority — no reports, no budget. In both cases success looks like nothing at all but failure is big failure.
It bothers me that I can’t define my role, if only for purposes of cocktail party efficiency. The other day I came up with an alternative definition based on an incentive system. Here it is.
Annual Elections
Once a year there is an election in which all of engineering, product, and design participate. If they vote stay then I stay for another year. If they vote go then I’m fired on the spot and (this is the important part) my stock options are evenly among everyone who voted. A simple majority is required for a decision.
Here are the positive behaviors this incentive system encourages:
- Economics. If people were rational actors (which they aren’t, but go with me here) then they would compare the value of their stock options with me present and the value of additional options. This gives me incentive to have visible business impact every year.
- Breadth. I want my presence to positively impact most of EPD every year. I’m going to need a whole lot of votes.
- Depth. I want to make a significant difference for a relatively small group of influential employees, so they can go out and make the case for me.
- Scale. As the company grows, it is in management’s best interest to keep giving me more options. Otherwise I will be making so little that I’ll never be voted out (everyone’s slice of my options being too small to matter).
Conclusion
To be clear, this isn’t my deal with Gusto. When asked for a description of my job at a cocktail party I still say, “Well, ummm, I, you know, it’s like, scale, flow, responsibility, how about another margarita?” What I do at Gusto is whatever would maximize my take from the incentives above.
We are, all of us, creating incentive systems every day. I’ve found it useful to look at my actions through this lens, to see positive encouragement and also unintended biteback.
