1: “This new compensation plan is terrible,” said one of the mid-level managers. “It will drive our best salespeople away,” write Jocko Willink and Leif Babin in Extreme Ownership: How U.S. Navy Seals Lead and Win.
The company’s leadership had recently unveiled a new comp plan for their sales force. The new plan significantly reduced pay, especially for low-producing salespeople.
“This new compensation plan will push people to our competitors,” said one manager.
“Some of my folks have already heard rumors about it; they don’t like it at all. And I can’t convince them otherwise. I don’t believe in it myself!” another shouted.
Jocko, who was conducting a leadership training for the managers, paused for a moment and asked one simple question: “Why?”
He smiled and then asked again: “OK, but why do you think they are implementing this plan? Do you think they want to push your best salespeople out the door?” he asked. “Do you think they actually want the company to lose money and fail?”
No one said a word. Because none of the managers understood why the new plan was being implemented.
“Has anyone asked?” Jocko inquired.
Finally, one of the more senior managers spoke up, “I’d feel pretty stupid asking. Our CEO is smart and has a lot of experience. She gets this business.”
“OK,” Jocko shot back. “So you’re all just scared to look stupid?”
Heads nodded with a universal yes.
“Let me ask you this,” Jocko continued. “When you can’t explain the reason behind this new compensation plan to your sales force, how does that make you look?”
“Stupid and scared,” one of the managers responded.
2: Later than afternoon, Jocko stopped by the CEO’s office. After a bit of small talk, Jocko asked her: “Do your managers ever confront you on anything or ask questions?” I asked.
The CEO thought for a few seconds. “Not really,” she acknowledged. “But I think if they had an issue, they would certainly bring it up with me.”
“I’m not sure they are as comfortable confronting you or opening up to you as you think,” he stated bluntly.
This situation is not uncommon amongst senior leaders, Jocko explains: “This was an example of a boss who didn’t fully comprehend the weight of her position,” he writes. “In her mind, she was fairly laid back, open to questions, comments, and suggestions from people. She talked about maintaining an ‘open-door policy.’ But in the minds of her sales managers, she was still The Boss: experienced, smart, and most important, powerful.”
He shared with her the discussion with the managers about the new sales compensation plan. “The issue is not that they don’t understand the plan, but that they don’t understand why the plan is being implemented. They don’t believe in it.”
The CEO was taken aback. She explained she had successfully executed a similar plan at a former company with terrific results. “A smaller, more effective sales force also reduces overhead: lower health care costs, fewer desks, fewer computers to buy, greater efficiency. It is a win-win.”
“That sound brilliant,” Jocko replied. “There is only one problem with it.”
“What’s that she asked, incredulous?
“Your midlevel managers don’t understand those points—they don’t understand why—and so they don’t believe in the strategy. If they don’t believe, neither will your sales force. If this plan rolls out and those executing it don’t believe in it, your plan is far more likely to fail.”
“So what can I do to make them believe?” asked the CEO.
“It’s easy,” he explained. “Just tell them why.”
The next morning, the CEO joined the training session with the mid-level managers. “She explained the details of the strategy behind the plan: the increased volume, the reduced overhead, the greater capture of existing accounts when handled by higher producing salespeople,” writes Jocko. “The managers quickly saw the connection and understood the benefits of the plan.”
“Now I get it,” said one manager.
“I wish we would have known all along,” said another.
3: Later that day, Jocko asked the group of managers: “Who is to blame for the CEO not explaining this to you in more detail?”
The room was silent.
“You!” Jocko exclaimed. “That is what Extreme Ownership is all about. If you don’t understand or believe in the decisions coming down from your leadership, it is up to you to ask questions until you understand how and why those decisions are being made. Not knowing the why prohibits you from believing in the mission.
“When you are in a leadership position, that is a recipe for failure, and it is unacceptable,” Jocko said. “As a leader, you must believe.”
“But the boss should have explained this to us, right?” one manager asked.
“Absolutely. I explained that to her, and, sure enough, she came down here and did just that. But she’s not a mind reader. The CEO can’t predict what you won’t get or understand. She’s not perfect; none of us are. Things are going to slip through the cracks from time to time. It happens.
“I made all kinds of mistakes when I led SEAL’s. Often, my subordinate leadership would pick up the slack for me. And they wouldn’t hold it against me, nor did I think they were infringing on my ‘leadership turf.” On the contrary, I would thank them for covering for me. Leadership isn’t one person leading a team. It is a group of leaders working together, up and down the chain of command.”
“So we let the boss down when we didn’t ask questions and communicate with her,” said one of the quieter managers in the back of the room.
“Yes, you did,” Jocko confirmed. “People talk about leadership requiring courage. This is one of those situations. It takes courage to go to the CEO’s office, knock on the door, and explain that you don’t understand the strategy behind her decisions. You might feel stupid. But you will feel way worse trying to explain it to your team a mission or strategy you don’t understand or believe in yourself.
“If you don’t ask questions so you can understand and believe in the mission, you are failing as a leader and you are failing your team.”
Reflection: Think back on a situation where I did not understand or believe in the strategy or plan my organization was implementing. How did I respond? What were the results?
Action: Journal about my answers to the questions above.