We’ve all the heard of the Law of Unintended Consequences, that is that actions of people always have effects that are unanticipated or unintended.  Although this term is typically used to describe government, I’m sure most of us have experienced it.  Those of us in the realm of sales compensation know all about this Law.  A move that seems beneficial one day can expose massive consequences the next.  Conditions are always changing and you can debate decisions for weeks without truly understanding the impacts.  But let’s not get too negative here.  Why do all Unintended Consequences have to be “Consequences”?  Many benefits can also come without warning.  The world of R&D is teeming with examples of projects gone wrong leading to breakthroughs in unexpected areas.  This kind of serendipity need not be reserved for those in white coats.  We should all keep an eye out for the “good” in all this uncertainty.  Most of us already agree that all decisions are temporary.  That’s why a push to having more system flexibility is vital to having up to date and effective incentive plans.    

The need for more flexibility usually leads to a new system altogether.  This brings about the most critical decision of all… what do we build and how?  So let’s do assessments, let’s do vendor selections, let’s diagram and hypothesize to our hearts content.  ROI analysis needs to be done and the numbers have to work.  Can we drop headcount?  Can we reduce overpayment?  What’s the value in turning around plan changes faster?  How many hours per day will our sales force rededicate to selling when their reporting is better?

I love the early theorizing about a new system.  There is always such optimism.  Compensation Managers and Compensation Administrators are usually dying for some sort of relief from their current predicament.  I love bringing that relief.  I’ve been there and feel for them.  That being said, it is rare that the final delivery of a system lives up to these initial dreams.  No matter how “realistic” we try to be, the road to get a system up and running always takes a toll on scope and budget.

This is where I offer some encouragement.  The Journey brings its own rewards.  Often times, we focus so hard on the finish line and lose sight of what we’re learning every day.  Take this list of tasks:

·         Processes

o   Document system workflow for compensation calculations.

o   Document business operations workflow for compensation calculations.

o   Define ideal skill sets and headcount for IT and business operations.

·         Comp Plans

o   Obtain catalog of current plan documentation.

o   Devise method for managing plan change version control. 

o   Agree to SLA for turnaround on plan changes.

o   Define all key data sources and data elements needed for current and future plan calculations.

·         Reporting

o   Discover true business critical end user reports and their requirements.

o   Investigate need for ad-hoc analysis reporting.

o   Define all key data sources and data elements needed for current and future compensation reporting.

·         Testing

o   Create test cases and methodically test calculation scenarios.

o   Identify gaps in automated functionality and devise adjustment procedures that satisfy SOX.

All of these tasks are part of a typical systems implementation.  Notice that none of them actually require the building of a new system.  Yet, not many organizations can afford to spend time doing all of these tasks without the pretense of a large new system development.  What is the value in doing all of these things?  In many organizations these would be monumentally valuable especially if you start uncovering gross errors or if your lack of documentation is hurting your ability to handle turnover.

My point is to appreciate the Unintended Benefits of your project—not all unintended consequences need be negative.  If you can find a way to predict these benefits, then an ROI case can be made; regardless, at the end of the day going through this process can improve your organization if you take proper advantage.

-Jason Kearns