What Were They Thinking?

C H A P T E R 21

The Real Budget Crisis

Stop Rewarding Forecasting and Negotiating Instead of Real Performance

SO THERE I SAT at a board meeting at a human capital software company, listening to the CEO and the CFO review our business performance. Compared with last year, profits and cash flow were both down a little and worse than that, the growth rate in new orders was also declining. We had competitors who were once smaller in sales but were now larger, which meant, of course, that they were growing faster, although this fact was not discussed as part of the financial review. But hey, we were ahead of plan for both the quarter and the year, so break out the champagne—or more to the point, the bonus dollars for our senior executives.

Is this ...