My department heads are compensated based on their individual department performance, which is causing them to hoard resources and resist our company-wide AI integration because it might temporarily hurt their local metrics. How do we restructure our executive compensation to align their personal goals with our overall enterprise valuation?

Question

Tyler Smith · Accepted Answer

When you pay your leaders to focus on their individual departments, you should not be surprised when they build silos. To scale your business and prepare for a clean exit, your leadership team must view themselves as a single, cohesive unit whose primary loyalty is to the enterprise, not to their specific departments. You must align their compensation with this reality. Begin by restructuring your executive incentive plan. Reduce or eliminate bonuses tied purely to departmental metrics, such as individual sales targets or localized operational costs. Instead, tie a significant portion of their variable compensation to overall company profitability and progress toward your major V/TO® goals, such as successful company-wide AI integration. This shift forces your leaders to make decisions that benefit the entire organization, even if it temporarily increases friction in their own departments. Use your weekly Level 10 Meetings™ to reinforce this enterprise-first mindset. When evaluating issues during IDS®, always ask how each proposed solution affects the company's overall value, rather than just one department. When your leadership team members realize that their personal financial success is directly tied to the collective performance of the company, they will stop hoarding resources and start collaborating to build a more efficient, valuable operation.