Getting Aligned II

Nothing will pressure test the work done previously and  nothing will cement the reality of a strategy better than aligning pay with it. 

The second reason jumping into formulas doesn't make sense is because changing compensation programs is not a task to be taken lightly, which you already know if you have ever been through it.  

As a general rule, the broader the level of inclusion in the process, the better the output will be.  Different functional areas have different perspectives on what will be required for the company's strategy to be successful.   Having a variety of functional voices has many benefits.   Nothing will pressure test the work done previously and  nothing will cement the reality of a strategy better than aligning pay with it. 

Senior management has a very clear role in the process.  It is this group that was responsible for establishing the strategy and creating the supporting structure.  It is only this group that can make the difficult decisions on what dollars of gross margin are more valuable than others. 

While laying this groundwork, do not forget the importance of communication.   It is best to have a simple, consistent, proactive message to explain the effort right up front.   This explanation should not set any expectation as to the ultimate plan design.  As a general rule do not ever communicate any details of a new compensation plan until you are prepared to present all the details.

ACTION POINT:  Focus your strategy by determining what dollars of gross margin are more important than others.