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Legendary investor Charlie Munger famously said: “Show me the incentive, and I will show you the outcome.” To that, I would add “and the unintended consequences.” All sales incentive plans are based on Munger’s aphorism, but without that second part, the lesson is left dangerously incomplete. An aggressive sales team can be a fast-growing startup’s greatest asset or its greatest liability. Sales is the only team in the company that operates under a strict incentive plan, which dictates that sales reps hit quota to earn commission or get fired. While this incentive structure is necessary to motivate and retain the best sales people, it also creates a crucible of pressure which can breed bad behaviors. Problems often occur when founders are too trusting of the alignment created by a sales incentive plan. Many founders believe that once the incentive is set up, the Sales team will largely take care of itself without much need for supervision. This “set it and forget it” mentality can lead

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• Tony Kam