There are times when the success of the individuals do not add up to the success of the group.
The marcom (Marketing Communication) group is in charge of the company website. The director reports to the VP of Marketing who has the grandeur vision. Creative talents then proudly present the new design of memorizing beauty. Rave reviews follow and the VP of Marketing basks in glory. But the portal to the product support was broken. No customer could search for the knowledge database or file the support case online. They call the 800 numbers and the increased volume brought down the PBX. Company reputation tanks.
As the company readies to introduce a new product, it finds the internationalization costs high. A financial study shows that certain countries historically do not sell this family of products well. An optimization effort naturally leads to the elimination of the translation costs to sell in those countries. But the VP of Sales in that region had a revenue quota that depends the sales. The company misses its sales target. Stock price falls.
There are just too many examples like the above. Solution #1 is leadership. When the natural prioritization of organizations do not align, someone must make the decision that optimizes for the whole. This decision will reward one group and hurt the other.
We can also carefully construct the incentives, or remove the disincentives. Too frequently, the big boss demands patriotism, that the individuals should sacrifice for the greater good. This is simply unrealistic. There are patriotic employees, but the majority of them place their own best interest ahead of the company.
When designing incentives, it is critical to remember the consequence of not having them is usually far worse.