One of the most important tasks of every manager is to define how you measure success. You’ve probably heard the phrase: You get what you measure for. More importantly, you get what you reward.
If you reward your team for success, they will try to behave more like what was rewarded. So be careful what you measure and what you reward. If you get it wrong, your team will likely fail.
This all seems obvious, but in fact it is very complicated. This is because the way most leaders define success misses one of the most important points. In an interview with Stanford University’s View from the Top, Google CEO Sundar Pichai explained it this way:
You have to encourage innovation… You know, one of the counterintuitive things is that companies tend to become more conservative as they grow. You have a lot of money, you have a lot of resources, but companies tend to make more conservative decisions.
As a result, Pichai says his job is to “encourage the company to take risks and innovate and be okay with failure — and to reward the effort, not the result.”
The last part is really important. In fact, these four words are one of the most important lessons for any leader. As Pichai points out, this can be difficult because “people reward results.”
If you judge people only by results, they will do whatever is necessary to avoid negative consequences. They play it safe and go back to what they already know. They will continue to give you what you always got, no more or less.
The thing is, avoiding a negative outcome is not a great measure of success. Avoiding negative consequences does not lead to greatness.
On the other hand, if you want people to work really hard, reward them for it. If you want people to take risks, try new things, and find new ways of doing things, encourage them to try.
These things don’t always lead to what we traditionally call success. Sometimes they are messy. Sometimes they fail. Sometimes the effort costs you a lot of money. The point is, trying something new isn’t necessarily a bad thing.
If you try to do something worthwhile, you will fail many times anyway. You will break things and you will figure out how to put them back together. You can encourage people to learn all of these and reward them for their efforts.
Of course, that doesn’t mean you don’t expect too much from your team. That doesn’t mean the results don’t matter. It simply means that the result you’re looking for might be less obvious than a 5 percent year-over-year increase in your stock price.
It really depends on the type of culture – and ultimately the type of business you want to build. If you want incremental growth and a small but steady increase in quarterly earnings, that’s fine, but don’t expect anything revolutionary.
However, if you want to build a team that is willing to work hard, reward them for their efforts. Reward them when they try and fail and when they learn and succeed. After all, it’s the best possible outcome anyway.
The opinions expressed here by Inc.com columnists are their own and not those of Inc.com.