The relationship between people and incentives is very straightforward – people respond to them. By the way, it also extends to the animal kingdom: the carrot and stick apply to all kinds of species, not only to tailless monkeys. More to the point, being entangled in their roots, time preference, which we discussed here, and the responsiveness to incentives come as a duo in all sorts of classic and almost iconic studies like the Stanford Marshmallow Experiment or Iowa Gambling Test or serve altogether as the basis for theoretical models – like in the Ainslie-Rachlin Model. For the World Bank economist William Easterly, the responsiveness of people to incentives even became the basis for his seminal book “The Elusive Quest for Growth”, where incentives ultimately shape the development path of societies.

In the context of an organization, incentives get translated into KPIs, SLAs, goals, and all kinds of bonus and malus rules resulting from them. Hence, the task boils down to creating such a set of KPIs to govern your project that it will channel and focus the attention of the team on longer-term outcomes, instead of hopping from milestone to milestone, hoping that the rest will be sorted out later – preferably upon going live and by someone else.

So how do you approach this from a practical standpoint? First, most globally and strategically, think of the outcome and do some creative reverse engineering. Imagine the day when the project goes live. How would you know that it has been a success? What is mission critical here? It is a great idea to have a look at the business plan written to initialize the project – it will shake up your perspective a little bit. Then translate the gains and the outcomes into operational metrics that would apply to the department or the division and create a KPI out of it – not only for the department but also for the project manager. This principle applies to setting KPIs between the stages of the project. What are your milestones? What is really crucial when reaching them? This is no trivial question as humans will be optimizing for whatever metric you set for them, and as an old saying goes, when a measure becomes a target, it ceases to be a good measure.

This approach would be, however, only the second-best for issues that result from split responsibilities. The unbeatable first-choice solution and the easiest way to nip the issue in the bud is to avoid having such a setup in the first place. Wherever possible try to have the planner and the implementer be the same person (ideally – this should be the same person who would “live” with the solution upon going live). If you still decide to have one person (team or department) initiating the project and another one – implementing or going live with it, there is still a way to make this ostrich fly. Make sure that you put such KPIs in place for the planners that you could assess and act upon first after the project goes live. With that, you will have to walk a fine line between sending the right message to your project manager that balances a good mix of short- and long-term incentives and getting their buy-in. This approach is not standard yet practicable in more organizations than you would suspect. At the very least, you can almost always devise a constellation that would “marry” the owner of the project’s outcome into the project at an early stage or do the reverse – tie a bonus or a different incentive for the project manager into the results of the implemented solution. Yes, this will add a layer of extra complexity in communication and decision-making during the project life and slow things down in the beginning. Nonetheless, you will get two benefits for the price of one inconvenience. First off, you will indeed use the “Define”-stage in the most meaningful way. Secondly, this will be a wise investment as it will help you have significantly less wear and tear upon going live – where wear and tear proves to be much more costly.

As a closing note: the moment you decide to give a “go” to a project that is being initiated by someone who has already made it clear that their days at the organization are counted – call me immediately. I will talk you out of this idea, and the more adamant they are about it, the faster you should dial the number.