San Francisco has lots of tall buildings, so we need those cool ladder fire trucks that you see in the cartoons. There is a firefighter in the front seat and another with a steering wheel in the back. As one drove by on an emergency call my nephew asked me who was in charge steering the truck. It took me a second, but my answer was, “both.”
As so many things tend to do, this immediately popped into my mind when discussing performance-based equity compensation with a client. Like the firefighters, participants in a performance equity plan are all working to get to the same place. They generally follow a similar path. And, like the firefighters, each key player must steer their own set of wheels and depend on everyone else to do the same.
The firefighter in front of the truck is like your executives. She must know the direction, be able to change course when the path is blocked and pay attention to traffic and obstacles, all while moving forward as fast as they can safely. She is focused ahead and implicitly trusts that the person in the back is doing what he must to keep the truck on the road.
The firefighter in the back of the truck must depend on the person in the front to aim him toward his destination. But, it is just as much his responsibility to get the truck to the fire on time. He must also be able to make decisions on the move. The front of the truck may choose to drive on the wrong side of the road. The firefighter in back must make that work. The driver may choose to make an unfamiliar, or unexpected turn. The firefighter in back is accountable for making sure his half of the truck navigates the turn safely.
Consider this in the context of your company. Just like everyone can’t be in charge of driving the fron of the truck, everyone in your equity plans should not be measured against the same metrics. The key goal of the firefighters is the same, just like the key goal of your employees (although in your employees’ case it is probably attaining corporate success, not putting out fires). The path for getting to the goal must be blazed by those at the front (or the top). Everyone else must be trusted to follow their own path along this trail.
It is critical to remember that the fire department drills and trains nearly every day. They also work in close teams, spending time to get to know each other. Their trust is built over a thousand small and a few enormous moments. Sometimes we forget the practice and small stuff and focus only on the enormous moments. We would all do our companies and our employees a favor if we considered firefighters as we build, design and operate complex performance plans.
Let’s face it most of us wanted to be firefighters when we grew up anyway. Now’s your chance to put your childhood dreams into action!
Dan Walter is the President and CEO of Performensation an independent compensation consultant focused on the needs of small and mid-sized public and private companies. Dan’s unique perspective and expertise includes equity compensation, executive compensation, performance-based pay and talent management issues, Dan is on the board of the National Center for Employee Ownership, a partner in the ShareComp virtual conferences and the founder of Equity Compensation Experts a free networking group. Dan is frequently requested as a dynamic and humorous speaker covering compensation and motivation topics. Connect with him on LinkedIn or follow him on Twitter @performensation.
We are working to edit this post to replace the term "fireman" with "firefighter". Sorry for any unintentional slight (especially to my personal female firefighting friends). It was a small slip of the brain. - Dan Walter
Posted by: Dan Walter | 08/08/2011 at 02:22 PM