Ep. 16: Compensation – The ONLY Way to World-Class (2 of 4)

Andrew continues in the DEEP philosophical explanation so often needed for Leaders and Executives to have the courage to implement creative and revolutionary Compensation Systems. Reed drives directly into a discussion of Outliers - Companies that operate with World-Class Quality and Profits - those operating in the 90th percentile statistically over extended periods of time. Reed points out that 100% of the companies MVI has measured over 27 years that operate in the 90th percentile use such methods…without a single one using traditional or average methods. Not even one!

In this episode, Reed also addresses “structuring your compensation system to flex with the fluctuations of revenue” so that a company can lock in, to a large extent, their Profit Standard. He also speaks on the creation of a “System of Mutual Reliance” where all departments and parts of the organization operate as an integrated, cohesive whole. He also shares the MVI success formula - Fewer People Paid Well – and the benefit of liberally SHARING profits with all employees and team members who are 1) Doing the Standards and are 2) Creating Value.

Chapter Markers

(00:00) Intro

(01:09) Outliers vs. The Herd – 50th percentile vs. 90th; benchmarking reality checks.

(04:35) Non-Traditional Pay – 90th-percentile orgs all use creative compensation.

(06:11) Turnarounds via Comp – Incentive + disincentive; get past the fear barrier; stop “Pampers” pay.

(07:58) Profits & Reserves – Build a fat, good bank account; value quality over speed.

(10:14) Service As Proof – Three-ring phone rule; training systems that create delight.

(11:10) Paycheck = Report Card – Compensation teaches standards every payroll.

(12:34) Meaning > Money Alone – Culture, not cash, keeps people.

(13:40) Old Options Don’t Scale – “Hard-ass” management vs. structural comp systems.

(15:20) Nature of Incentives – Organisms move toward payoffs; include non-financial rewards.

(18:14) Fairness & Flight Risk – Salary inequity drives top talent away—fix it in the system.

(26:08) Labor Logic – Labor is #1 cost → design comp first; flex costs with revenue; mutual reliance.

(32:45) Share the Wins – Fewer people paid well; comp builds confidence, signals winning.

(36:22) Plain Talk & Courage – Speak clearly, act deliberately; let the system do its work.

Song: If All the World Were Right - andrew reed & the liberation

Album: If All the World Were Right (Trilogy II Album 1)

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Watch out for the next message, every two weeks on Monday @ 7:01am EST!

“Almost every organization that’s been rescued or completely turned around… It’s come through the compensation system.”