Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
10 Aug 2025 · 2 min
0:00
In this episode of Double Your Profit, the host argues that the simplest and most powerful way to drive business growth is to align compensation with desired outcomes. He critiques the common practice of paying salespeople only a base salary, pointing out that without commissions the sales team lacks incentive to increase sales. Citing Charlie Munger’s “show me the incentive, I’ll show you the result,” he explains that compensation structures shape company culture: what is rewarded is repeated, what isn’t is ignored. He illustrates the point with a personal anecdote about a friend who, while launching a new market, had no compensation plan tied to that growth, leading to neglect of the initiative. The host concludes with a direct call to action, urging listeners to immediately design a commission structure and share it in the comments.
Chapters
Dudes, welcome back to Double Your Profit. We're having a lot of fun over here. Today we're talking about tying comp to what matters. I'm going to be honest, this is probably the easiest and dumbest thing that we're going to talk about in this whole series. I want to give you an example that happens pretty frequently when I'm talking to people. I'll hear someone say, man, I wish we had more sales. And then we start trying to understand, what's your comp structure look like for your salespeople? They say base salary. I'm like, what about the commission? They're like, what commission? And The next question is, what the fuck are you doing? You are not incentivizing the behavior that you are asking for. Look, if you want something, you need to build it a game so that you get what you want. This is the easiest lever to pull inside your business, and I don't understand why people don't pull this faster. If you have a salesperson without any commission, just pause the video and like go build a commission structure and then come back. Charlie Munger said, show me the incentive, I'll show you the result. If there's no incentive, There's no result. The second layer down from this is you end up creating a culture of what you want. So compensation is a tool to drive the behaviors you want at scale. If I build a compensation structure that has no commission so that they can scale and grow their own lives, then as I bring on more people into that team, they're also going to underperform because they're not driven to succeed. They have no reason to put in that additional effort. What gets rewarded gets repeated. And what doesn't get rewarded gets ignored. I was actually— I was on a bike ride on Monday and that came up. This was a good friend of mine and we were just riding along and she's responsible for dropping a new department for her business. They're driving into a new geography and she's responsible for both her core activities as well as driving growth in this new market. Guess what doesn't have an incentive yet? The new market, the big new thing that they're investing all these resources into. Guess who didn't put a compensation structure on that? And guess who was biking with me at 11 in the morning on a Monday joking about how she should care about this thing over here, but because she wasn't being incentivized to care about it, she didn't. Reward what you want, and what you don't reward will be ignored. Comment below with the comp structure you put in place while watching this video, and don't be dumb— go put a comp structure in place.
