Principle
A commercial value creation plan is executed by the same people, inside the same incentive structure, that produced the findings the plan is intended to correct. Unless the plan changes the structure before it asks for the behaviour, it is a document requesting that rational people begin acting against their own interests, and it will be received exactly as such.
Behaviour
The plan is constructed during diligence and refined immediately after close. It is analytically sound. It identifies pipeline hygiene, forecast discipline, coaching capability, and pricing governance as priorities, and it assigns each to an owner with a timeline. It is presented to the commercial leadership team, who receive it seriously and commit to it sincerely.
Nothing in the compensation structure has changed. Nothing in the reporting cadence has changed. The rep who is now asked to disqualify weak deals early is still measured on pipeline volume. The manager asked to spend forty per cent of their time on live coaching still has the same forecast submission deadline and the same number of internal meetings. The plan requires new behaviour and the system continues to reward the old behaviour, and where those two conflict the system wins, because the system pays.
By month six the palatable elements have been implemented and reported. By month twelve the plan is described as behind schedule, and the explanation offered is capacity, or market conditions, or insufficient commitment from a particular function. The explanation is never that the plan asked people to act against their incentives and they declined.
It is a document requesting that rational people begin acting against their own interests, and it will be received exactly as such.
Evidence
Take each behavioural change the plan requires and identify the specific mechanism through which the individual performing it will be better off. Where no such mechanism exists, the change is being requested rather than incentivised, and its implementation depends entirely on goodwill, which does not survive contact with a quota.
Examine the sequencing. A plan that changes compensation in month nine and requests behavioural change in month one has assumed eight months of unincentivised compliance. A plan that changes compensation first, and requests nothing until the new structure is live, has bought its behavioural change rather than asked for it.
Establish who loses. Every genuine commercial reform creates an identifiable loser: a rep whose territory shrinks, a manager whose role changes, a product champion whose line is deprioritised. A plan with no identifiable losers is a plan that has avoided every consequential decision, and it will produce correspondingly little.
Psychology
Plans are written by people who will not execute them, for people who did not write them, and the gap between those two populations is where value creation goes to die. The author experiences the plan as obviously correct because they have spent weeks reasoning toward it. The executor encounters it as an instruction to do something difficult for which they will not be rewarded.
Commercial leadership will nonetheless commit to it, sincerely and immediately, because declining a new owner's plan in the first month is not a survivable position. Sincere commitment and behavioural change are entirely different things, and the first is available at no cost while the second requires that somebody's incentives change first.
Commercial Risk
The first ninety days determine whether a commercial plan will be executed, and the determination is made not by the quality of the plan but by whether the structure was changed before the behaviour was requested. Plans that lead with structure achieve behavioural change in the second quarter. Plans that lead with behaviour achieve it in the fifth, if at all, having burned the credibility of the plan in the interim.
This is the most consequential and most avoidable failure in commercial value creation. It costs nothing to sequence a plan correctly. It costs an entire holding period to sequence it incorrectly, and the diagnosis when it fails will name the market, the team, or the timeline, and will not name the sequence.
Investment Committee Note