No Skin in the Game, No Soul: Why Leaders Need to Feel the Heat
The big topics of this Simply Human Newsletter - accountability, skin in the game, taking risks
👋 Hey,
Ever heard the saying, "put your money where your mouth is"? That's kind of what this "skin in the game" idea is all about, made popular by this smart guy Nassim Nicholas Taleb. Basically, it means if you're calling the shots, you should also feel the heat if things go wrong. It's not just about getting bonuses when things are good; it's about fairness and actually knowing what's up. If you stand to gain, you should also stand to lose – simple as that.
This idea is pretty useful for figuring out why sometimes the big bosses and regular folks at companies don't really sweat the small stuff, like how the company's doing overall, being green, or even if their coworkers are happy. If their own skin isn't in the game – meaning they don't personally win or lose based on these things – they might just not care as much. It can lead to decisions that look good right now but screw things up later, just so someone can get a quick win.
Think about the folks at the top in huge companies. They can get so caught up in their corner offices that they don't see how their decisions play out in the real world. All those layers of management can kind of protect them from the mess. So, they might focus on quick cash grabs and stock prices (which boost their bonuses) instead of thinking about the long haul, like being sustainable or keeping employees happy. If their own wallets were tied to the company's long-term health, they'd probably think twice about decisions that could trash the place later on. It's like that "Bob Rubin Trade" thing – you get the good stuff, but someone else eats the bad stuff. Not cool.
Without any personal risk, leaders might take crazy chances or ignore the long-term damage to the environment, the company's reputation, and how everyone's feeling at work.
And you get these "Intellectual Yet Idiot" types who have all the fancy theories but no clue how things work on the ground, making dumb decisions that hurt the company without them even realizing it.
Then you've got the regular employees who might feel like just another cog in the machine. If they don't see how the company's long-term success benefits them personally, why would they go the extra mile on stuff like company performance or recycling initiatives? It's easy to feel disconnected. Take the poor shop worker getting yelled at about bad fruit they had no say in buying – that's a classic case of no skin in the game. Sure, they need their job, but they can't really change the big stuff or directly profit from the company being super sustainable. This lack of ownership can lead to people not caring about being green or supporting their colleagues. If it doesn't affect them directly, why bother?
So, how do you fix this "no sweat, no care" problem? Companies need to make sure everyone feels like they have something to gain (and lose). For the big bosses, this means linking their paychecks and bonuses to more than just short-term profits. How about tying some of it to hitting environmental goals or keeping employees happy? And if their decisions cause a major screw-up down the line, they should have to pay some of that bonus back – that'll get their attention! Being open about the company's impact on the environment and society and making leaders actually responsible for it will also help.
For everyone else, give them a real stake in the game. Things like employee stock options or profit-sharing plans that aren't just about the money but also about hitting sustainability or employee satisfaction targets can turn them into actual owners. Getting teams to work together and rewarding them for hitting goals in performance, sustainability, and creating a good workplace can also make a big difference. And just giving people more say in their day-to-day work can make them feel more connected to the results.
Bottom Line: Everyone Needs to Feel It!
This "skin in the game" thing basically explains why companies can sometimes make dumb decisions about the future, the planet, and their own people. When the folks in charge and the regular employees don't feel the direct impact of their actions (or lack thereof) in these areas, apathy kicks in. But if companies get smart and create systems where everyone has a real stake – whether it's money, reputation, or just feeling like they matter – they can build stronger, more sustainable, and ultimately more successful businesses. It's not just the right thing to do; it's the smart thing to do.
📑🧠Read more on this topic: The Accountability Gap: Why We Don't Take Ownership
Our commitment is to find alternatives to a human -centric accountability. This is what the Simply Human Tribe is also about.
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Made with 💚 by the Simply Human Tribe [Zuleka Kaysan and Ivan Palomino]
