Post #2: “You Will Get Exactly What You Incent”
Learn about Pollinate and the Social Sector Franchise Accelerator in our Get To Know Us post, here!
As we discussed at the roundtable, Pollinate’s critical issues include:
1. Gaining and maintaining a competitive advantage;
2. Designing the best organizational structure(s) for scaling; and,
3. Choosing markets for expansion (peri-urban/rural etc.).
As Pollinate explores different options for replicating for scale, and incentivizing employees at different levels, we will follow along to see if concepts from the business-format franchising methodology are applicable to its approaches to growth and structure.
On today’s call, we were joined by Peter Holt, Pollinate’s mentor, as well as Pollinate’s co-founder and CEO, Alexie Sellers, and Head of People and Culture, Madhavi Kulkarni. Alexie was unable to attend the SSFIR in New Hampshire, so we spent part of the call bringing everyone up to speed and making sure we were all aligned on the critical issues. The issues seemed to naturally prioritize themselves — we decided to focus on designing the best structure for scaling (critical issue #2), given that regional expansion (#3), competitive advantage (#1), and its incorporation of franchising methodologies are all dependent on operating structure design!
Bumps on the Road to Replication
Pollinate has struggled to develop standard compensation systems — a mix of base salary and commission — that incentivize sales staff at different levels across a growing number of diverse locations. Additionally, Pollinate has recently ‘managed out’ several underperforming staff members, a difficult process for a socially-minded organization, and is thinking carefully about its hiring and training procedures. In looking at this critical issue, several questions emerge, including: how do we motivate the Pollinators, how do we train and support the Sales Managers, and how does this scale across different geographical and demographic areas? What has worked for Bangalore, where the Sales Manager has an entrepreneurial mindset and excels at motivating his sales team, has been less successful elsewhere. To quote Alexie, “We’re definitely getting better than when we first replicated, but we still need to make sure that we all have the right systems in place”.
The Top, the Bottom, and the Malleable Middle
The growth and personnel challenges that Alexie and Madhavi describe resonated with Peter, given his personal experience as a franchise executive. When incentivizing sales associates or managers, is it possible to change a person’s character, competency, and chemistry? Peter observed that, in any organization, there are three tiers of people. The top tier is passionate, committed, and self-motivated; they are willing to pour their life energy into their work, in some cases almost regardless of the compensation that they are paid. The bottom tier — and there’s always a bottom — if you did it for them, they’d still fail. Your job as a leader is not to eliminate the underperformance; rather, your job is to raise the bar of what that underperformance looks like and to be sure you are making personnel decisions quickly.
Peter continued, “It’s that middle group that you actually have opportunity to influence. The top, they’re going to do it anyway — the bottom, you’ve got to get rid of that — in your organization, it’s that middle where you actually can influence the outcome. And that outcome is going to be directly impacted by that structure that you’re putting in place.”
Aligning the Incentive Structure
To move the middle, Peter continued, “you have to be incredibly thoughtful about what you’re doing, because you will get exactly what you incent.” Peter shared his own experiences at the helm of The Joint Chiropractic, where he is currently restructuring the incentive program for the organization’s doctor franchisees. An effective incentive system gives people control of their performance metrics, then “people are remarkably effective at operating in their own best interest.”
Sales Managers: Room to Influence
Alexie reflected that the city Sales Manager role is “that middle layer we can influence. Intertwined with Pollinator performance is the managers’ capabilities and their expectations of their team — how much they drive their team to grow, and how quickly they expect them to grow.”
Pollinate first replaced unmotivated staff, then shifted the incentive structure to encourage the new/existing teams to reach for greater goals and change the status quo. The leadership team was surprised and frustrated at the pushback from Sales Managers as they prepared to roll out this change, despite surveys and other communication throughout the process.
Looking Ahead
Since Pollinate is currently modifying their incentive structure, we will have to wait and see how it impacts the Pollinators, and therefore the sales managers’, performance. But as we all know, there is more to motivation than money alone. From his role last year as mentor to the social sector franchise Jibu, Peter has a lot of experience discussing different aspects of encouraging a “sales culture” in the social sector setting (read more about Jibu’s sales and incentives here). As Pollinate evolves, their human capital selection criteria, the types of incentives they deploy, and the level of autonomy baked into their structural design will all impact whether they turn out to be good candidates for business-format franchising. It will be exciting to see how they develop! We’ll learn more next month about how Pollinate’s bold restructuring is going, and how that will impact their expansion decisions and their competitive advantage!!
