Reward Decisions, Not Results, Urges Biz School Podcast

Last Updated Apr 22, 2009 7:36 AM EDT

Podcast


  • The Find: Incentives for short term results have come in for much criticism lately, but one business professor is offering a particularly bold prescription: reward the decision, not the result.
  • The Source: A podcast interview with Zeger Degraeve, a professor of innovation, from London Business School.
The Takeaway: A focus on rewarding short term results is one of the management practices which has been blamed for causing the current financial crisis, but even as many agree that incentives need to be reworked, one professor is making an even bolder claim: "The result is irrelevant as a measure of decision quality."

Reminding us that "nobody has a crystal ball" and that unforeseen developments can throw even the best laid plans off track, Degraeve argues that what managers should strive for â€" and be rewarded for â€" are decisions that lead to team commitment and concrete action on issues. Focus on managing risk and good management process and results will follow, he concludes.

The Question: It's an interesting argument but I'm not entirely convinced; is the idea that a company can focus on decisions, not results craziness or a cure for what ails us?

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    Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.