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Collins, who offered his remarks at the SHRM Annual Conference and Exposition in Atlanta, says that one theme runs through every study his team has done—the biggest question is “who should be on the bus.”

The 20-Mile March

Every leader needs a 20-mile march, says Collins. His reference is to polar explorers Amundsen and Scott and their race to the South Pole. Both faced the same circumstances, but only Amundsen came back alive. Leadership choices made the difference.

Amundsen set a goal of 20 miles every day, day in and day out. Scott elected to march when the weather was good. On a good day, Amundsen’s people would ask to continue beyond 20 miles, but he said no. That is discipline, says Collins.

A modern day example of discipline is South West Air, the best-performing stock of the 70s through 90s, says Collins. Riding their great early success, the airline was besieged by 100 cities clamoring for their business; they chose 4. That’s discipline, says Collins.

What’s your 20-mile march? He asks.

The Success Triad

Collins points to a triad of behaviors that seem to mark success:

• Fanatic discipline (as displayed by Amundsen and Southwest)
• Productive paranoia (“We’ve predicted 11 of the last 3 recessions.”)
• Empirical creativity. (Amundsen and Scott both planned to use ponies, but Amundsen went and talked to Eskimos who said, no, use dogs. With 30 mile-per-hour winds, minus 30 temperatures, you get sweating ponies and that means frozen ponies.)

Creativity and discipline—a magic elixir, Collins says.

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But What About the Role of Luck?

Collins is often asked, Isn’t luck a major factor in what makes organizations successful? Collins and his team decided to quantify “luck” and then do research to find out what role it played in determining which organizations would be successful.

Their research suggests that over time, luck has not been a significant factor in corporate success.

Collins uses Bill Gates as an example. He went to a private school with computer access, knew basic, was there at just the right time, etc. So was that luck that let him found Microsoft? No says Collins. There were a lot of people with the same access and the same knowledge. What about the PhD electrical engineering students at all of the top colleges who had similar opportunities and greater computer knowledge?

They could have dropped out and founded a company, but they didn’t, Collins says.

So luck wasn’t a factor for most successful organizations, and you can’t count on luck to keep your compensation program successful.

Internal equity? New ranges? “Special” arrangements? Pay-for-performance? Wage and hour compliance?—challenges abound for every compensation manager. Every day brings new problem from within the organization and on top of that pile on whatever the agencies and courts throw in your way.

You need a go-to resource, and our editors recommend the “everything-HR-in-one website,” HR.BLR.com. As an example of what you will find, here are some policy recommendations concerning red-circle rates, excerpted from the website:

Red-circle rates are another story. Obviously, cutting the pay of an employee will not do much to gain acceptance for the new wage program, so alternatives have to be considered.

• One alternative is to “grandfather” the employee; this means allowing the employee to stay above the maximum until the person is promoted, terminated, or retired.
• Another approach is to freeze the employee at that red-circle rate until adjustments to the rate range finally capture the employee’s rate back into the structure.
• Still another approach is to increase the employee’s wage by only half of the adjustments made to the range, again, until the rate is captured.

A similar problem occurs with employees who are under- or overpaid in relation to actual performance. As defined, the minimum, midpoint, and maximum rates are each definitions of pay for specific levels of performance. So an employee performing 80 percent of the job duties at 80 percent efficiency under normal supervision and who is paid above the midpoint may have a pay rate similar to a red-circle rate except that it is within the rate range.

 In this case, counseling and performance evaluation feedback are needed to bring performance in line with pay.

We should point out that this is just one of hundreds of analyses, checklists, training materials, job descriptions, and sample policies on the site.

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