Applying Pixar’s “22 Rules of Storytelling” to Pay

What do ‘Up’, ‘Cars’, ‘Inside Out’, ‘Monsters, Inc’, ‘Ratatouille’, ‘Toy Story 3’, ‘The Incredibles’, ‘Finding Nemo’, ‘Toy Story’ and ‘WALL-E’ have in common? First, they are 10 of the best animated movies made by Pixar. Second, they all follow Pixar’s “22 Rules of Storytelling.” As it turns out, these rules adapt well to the world of compensation plans and philosophy.

1. You reward participants for performing well AND for achieving results.
2. You gotta keep in mind what's interesting to your participants as an audience, not what's fun to do as a as a compensation professional. They can be, and usually are, very different.
3. Aiming for a specific solution is important, but you won't see what the answer is actually about til you've modeled potential results. Now rewrite.
4. Once upon a time there was ______. One day ______. Because of that, ______. Because of that, ______. Until finally ______. (THIS RULE IS IMMEASURABLY IMPORTANT)
5. Focus. Combine ideas and plans. Hop over sticking points while you look for answers. You'll feel like you're losing valuable stuff but it sets you free.
6. What are your company and participants good at, comfortable with? Model the polar opposite. Challenge stakeholders during design and execution. How do they react?
7. Come up with your ending before you figure out your middle. Seriously. Endings are hard, get yours working up front. Know how much you are willing to pay and why. Don't be surprised when your approach works.
8. Finish your program and get it implemented even if it's not perfect. In an ideal world you have both, but move on. Implement and adapt as conditions change and you learn new things.
9. When you're stuck, make a list of what SHOULDN'T happen. Lots of times the approach to get you unstuck will show up.
10. Pull apart the pay philosophies and plans you like (yours and those from other companies). What you like in them is a part of you and your company culture; you've got to recognize it before you can use it.
11. Putting it on paper lets you start fixing it. Start documenting and modeling as ideas arise. If it stays in your head, a perfect idea, you'll never share it with anyone.
12. Discount the 1st thing that comes to mind. And the 2nd, 3rd, 4th, 5th — get the obvious out of the way. Surprise yourself.
13. Give your compensation an edge. Passive and “normal” might seem fine to you as you design, but it's poison to the program when competing for talent.
14. Why must you have THIS philosophy or plan? What's the belief burning within you or your stakeholders that your approach feeds off of? That's the heart of it.
15. If you were your participants, with this approach, how would you feel? Honesty lends credibility to unbelievable situations.
16. What are the stakes? Give a reason to root for the participants. What happens if they don't succeed? Model with the odds stacked against them. What do they get by surmounting real and potential challenges? Is it reasonable?
17. No work is ever wasted. If it's not working, let go and move on — it'll come back around to be useful later.
18. You have to know your company and its capabilities. Know the difference between creating a great program and designing the “best” program. Things move fast. Modeling is as much testing, as it is refining.
19. Coincidences that can get participants to the finish line will happen; but recognize them for what they are. Don't claim pay is successful unless it drives the behaviors, decisions and/or specific results in the way it is designed to.
20. Perform this exercise: Take the building blocks of a pay philosophy or plan you dislike. How would you rearrange them into what you DO like?
21. You’ve gotta identify with your stakeholders. You can’t just assume things will work. What would make YOU act that way?
22. What's the essence of your pay philosophy or plan? Most economical telling of it? If you know that, you can build out from there.

This list was derived from the fantastic list “The 22 Rules of Storytelling – by Pixar,” created Emma Coats.

Dan Walter, CECP, CEP is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture and has been deeply involved in equity compensation for a long, long time. Dan has written several industry resources including the recent Performance-Based Equity Compensation. He has co-authored ”Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation”, “Equity Alternatives” and a few other books. Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.

Comments

[Kent Oldham]

Dan,
Nice article but I would have liked to see no more than about 7 "rules". Don't we consult that any more than 5 to 7 measures in an incentive plan is too many? Why was Stephen Covey's book so popular? Because it was only SEVEN habits. There is already too much information out there - we need to focus on quality over quantity. In the words of Confucius (irony acknowledged) "Life is really simple, but we insist on making it complicated"

[Dan Walter]

Kent,
Thanks for the comment. I agree that this list is extensive. It is based on an actual list of 22 rules by Pixar. While it is very long, it does link to some of the most successful movies of all time.

I find that we often try to get "shorter" lists or "more simple" solutions while losing out on the nuance that makes these programs successful.

Example; It would have been great if Wells Fargo's list of creating an Incentive Plan had included a few extra rules about balancing motivation with pragmatism and auditing of results.