In July of this year, I became a ProfitWorks Certified Coach™. I am honored to be among the first seven coaches nationally certified in the ProfitWorks SolutionⓇ founded by Alex Freytag, an expert EOS Implementer™, EOSⓇ Community Leader, and EOS ConferenceⓇ co-founder.
Through his work with entrepreneurs, Alex recognized that many companies have a bonus or incentive program not connected to a company-wide goal that employees must collectively achieve. Those types of discretionary awards don’t require any skin in the game. Over time, that leads to employees feeling entitled to rewards rather than making decisions and taking actions that help their company accomplish its revenue or profit goals. So, Alex created the ProfitWorks Solution to help leaders develop an incentive plan that shapes employee behavior to improve their organization’s financial performance.
As a ProfitWorks Certified Coach™, I am trained to help business leaders design employee incentive plans that inspire and motivate team members to help their companies achieve their financial goals. I love working with numbers as well as teaching people about cash flow and developing their business acumen, so this certification is a natural fit for me.
At the Center of It All
The ProfitWorks model illustrates how a company’s operating system, incentive plan, profitability education, and ongoing training interconnect.
Organizations need:
- An operating system – An organization needs an operating system, like EOS, that creates a clear vision and fosters a healthy company culture.
- A No-Entitlement Incentive PlanⓇ – As a ProfitWorks Certified Coach, I'll be working with business owners and their managers to develop and execute a self-funded incentive plan that provides rewards when a profit target is achieved.
- Education, Tools, Reinforcement – Many businesses’ employees—even at the leadership level—don’t understand how their decisions play into the company’s profitability. So it’s critical to educate them on how to make a profit, give them tools (such as the EOS Accountability Chart™, EOS Rocks, and To-Do Lists from weekly Level 10 Meetings™), and provide ongoing development of their fiscal knowledge.
Common Employee Incentive Plan Mishaps and Best Practices
Leaders often make one or more of the following mistakes with their incentive plan.
They…
- Make it too complicated.
- Administer it on a discretionary basis.
- Create plans in departmental silos versus focusing on overall company performance.
- Make the goals to achieve a reward too unattainable.
- Fail to educate employees, leaving them feeling disconnected from the plan.
- Offer incentives that are too small to motivate employees.
So what does work? Creating a plan that shapes employee behavior and motivates them to take ownership is key.
- Choose a profit target that sets a trigger for when employees are rewarded—e.g. If the company achieves over 10% net profit, it will distribute a certain amount of the profits to its employees while reinvesting the rest into the business.
- Consider the Positive Tension theory (see image below) that assumes people are most highly motivated when the probability of success is 50% and there is an adequate amount of tension (not too little and not too much) involved in meeting the goals required to earn a reward.
Used with permission from ProfitWorks, LLC
The Process
If you bring me on as your ProfitWorks coach, here’s what the process looks like:
- Discovery Meeting – During this time with you, I'll learn more about your business, share details about the ProfitWorks Solution model, and answer your questions about the process.
- No-Entitlement Incentive Plan Design – If you decide to move forward with the solution after our discovery meeting, we’ll work together to design an incentive plan ideal for your organization.
- Launch – I help your organization train your employees, increase their business literacy, and provide you with the support tools and resources you need to successfully maintain your plan and keep employees engaged.
How the ProfitWorks Solution Can Advance Your Business
Here’s an example of the results one company achieved after implementing the ProfitWorks Solution. Naturally, results vary from one organization to another, but this illustrates how significantly a No-Entitlement Incentive Plan can impact a business’s financial health.
Used with permission from ProfitWorks, LLC
Doing More and Adding Value
The ProfitWorks certification allows me to expand how I use my knowledge and skills to help business leaders position their organizations for ongoing success. Businesses of any size and in any industry can benefit significantly from the ProfitWorks Solution. I welcome anyone—including my fellow EOS Implementers with clients who can benefit from the solution—to reach out to me to learn more.
