Haute Lumière
Commerce · VI.04 · MMXXVI · daylight
WORKBOOK — THE LUMINOUS GAINSHARE EMPLOYEE
Chapter VI.04 · The Commons That Held
For the person working inside a gainshare arrangement. A gainshare is a commons: the pool of verified improvement is a shared resource, the baseline is the boundary document, verification is the enforcement cost, and the scheme rules are the charter. This workbook reads your own scheme through the chapter's four columns, computes what being verified costs you, and shows you what to ask for.
YOUR GAINSHARE IS A COMMONS
A gainshare has four parts. If any is missing it is a discretionary bonus wearing the word.
- A baseline. What was true before. Agreed, signed, dated.
- A measure. How improvement is computed, precisely enough that two people get the same answer.
- A share. The percentage of verified improvement returning to the people, stated as a number.
- A period and a verifier. When it is computed, and by whom.
Now set that beside the chapter's five survivors and the mapping is exact.
| The commons | Your gainshare |
|---|---|
| The dated boundary document | The signed baseline |
| The rule bound to a visible proxy | The measure, and what it is computed from |
| The forum that meets on a fixed day | The verification period |
| Who enforces, and what it costs | The verifier, and what verification costs |
| What happened the last time it was tested | The last disputed period |
You are not a passenger in this chapter. You are operating a commons from inside it, and everything the survivors did well is something you can ask for by name.
PART ONE — DISCOVERY
Days 1–30: read your own charter as case law
Exercise 1.1 — Fill the four columns on your own scheme (2 hours)
The rule. Write the measure as a formula, from the scheme document, not from memory or from what your manager said in a briefing. The document. What is the date on the baseline? Who signed it? Where is the signed copy held, and can you obtain it today? The enforcement. Who verifies, on what evidence, and how many hours does that take? The test. The last period anybody disagreed about. How was it resolved, and how long did it take?
If the baseline has no date, or the signed copy cannot be produced, that is the single most valuable finding you will make this quarter. A commons without a dated boundary document has arguments about the rule rather than under it, and those arguments do not end.
Exercise 1.2 — The visible proxy, from where you sit (one week)
The chapter's sharpest design point is that surviving commons bind rules to things that cannot be hidden. Apply it to your measure.
What would somebody have to hide in order to make our measure read better than reality — and could they?
You can answer this and the finance function cannot, because you can see the work. Write down every route. A measure with an easy concealment route will be disputed sooner or later, and the dispute will cost you a period. Bringing the routes to the scheme owner before anyone uses one is the strongest position you will ever hold in this arrangement.
Exercise 1.3 — The appreciative team conversation (45 minutes)
"Think of a period here when the improvement was unusually real — not the biggest number, the one we were proudest of. What was in place? What did we do that we do not normally do?"
Conditions, not outcomes. A gainshare pays for repeatable causes; this is how you find them.
PART TWO — THE ARITHMETIC
Days 31–45: compute what verification costs, and on which denominator
Exercise 2.1 — Your own E/V (90 minutes)
Worked, so the shape is unambiguous. A scheme with £850,000 of verified improvement a year and a thirty percent share:
verified improvement = £850,000
share = 30 %
the pool = £255,000
internal audit, 120 h × £70 = £8,400
measurement system upkeep = £15,000
verification meetings, 6 × 2 h × 4 × £45 = £2,160
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E = £25,560Now the move that matters, and it is the reason this exercise exists.
E / verified improvement = 25,560 / 850,000 = 3.01 %
E / the pool = 25,560 / 255,000 = 10.02 %The same cost, two denominators, and they differ by exactly 3.3333× — which is one over the share. Neither is wrong. Both are quoted, by different people, for different purposes, and almost nobody says which they are using.
State your denominator. When somebody tells you verification is expensive, ask what it is a percentage of. When you argue that it is cheap, say what yours is a percentage of. This one habit will make you the most credible person in the room on the subject within a quarter.
Exercise 2.2 — The baseline ratchet, computed (90 minutes)
The question that decides whether a gainshare is worth being in: what happens to the baseline when the gain is realised?
If it resets to the improved level each period, you are on a treadmill: every gain raises the bar you are measured against. Compute what that costs you. Take a £10,000,000 addressable cost base, a team achieving five percent cost reduction each year, and a thirty percent share.
year fixed-baseline pool annual-reset pool
1 150,000.00 150,000.00
2 292,500.00 142,500.00
3 427,875.00 135,375.00
4 556,481.25 128,606.25
5 678,657.19 122,175.94
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five-year total, fixed baseline 2,105,513.44
five-year total, annual reset 678,657.19The same work is worth 3.10× more to you under a five-year fixed baseline than under an annual ratchet. Nothing about the effort changed. One clause did.
A well-designed scheme either holds the baseline for a stated term — three to five years is typical — or ratchets on a published, gradual schedule everyone can see coming. Find out which yours does. If nobody can tell you, that is the finding, and it is worth more than this quarter's pool.
Exercise 2.3 — Certainty against severity, applied to disputes (45 minutes)
The chapter shows that surviving commons use near-certain detection and small sanctions, and that the reverse — rare detection, heavy consequence — produces the same expected cost with 32.12× the variance.
Your scheme has the same choice in a different coat. A scheme that verifies often, lightly and publicly produces small, frequent corrections. A scheme that verifies annually and heavily produces rare, large surprises.
Write down which yours does, and then write down which you would design. Then compute the cost of moving from one to the other: more frequent verification raises E, and you should know by how much before you ask for it.
PART THREE — DESIGN
Days 46–70: make the uncounted countable
Exercise 3.1 — Find one uncounted gain (two weeks)
An uncounted gain is not shared. Making it countable is the highest-leverage thing anybody inside a gainshare can do, and you are better placed to do it than anyone above you.
The chapter's five places, translated to the floor:
| The formal place | What you actually see |
|---|---|
| Waste streams | What is thrown away that somebody would pay for |
| Retention | Why people in your team stay — the real reasons |
| Assets past schedule | The machine or system that works because someone tends it |
| Suppliers | Which supplier answers at six, and which does not |
| Quiet pride | What your team would defend if someone tried to cut it |
For your best candidate, write: what changed, what it is worth, and — the part that decides whether it ever enters the pool — what visible proxy it could be measured by that nobody has to be hired to watch.
Exercise 3.2 — The one-page proposal (2 hours)
What is happening. Two sentences. The proxy. The thing that already gets recorded, or would be recorded by the act itself. The baseline. What it was before, and the date of the evidence. What it is worth annually. With the method named. What measuring it would cost. In hours, and as a percentage of the gain.
That last line is the one that gets it adopted. A proposal that says what its own measurement costs is a proposal from somebody who has thought about the scheme rather than about their own line.
Exercise 3.3 — The escrow question (30 minutes)
Ask, in writing: where do any penalties, clawbacks or disallowances in this scheme go? If they reduce the pool, they are effectively revenue to the firm from disallowing your improvements, and the verifier has an interest in disallowance.
The commons answer is an escrow: corrections go to a restricted fund applied to the resource — here, to the measurement system itself — on a published schedule. Ask for that. It costs the firm nothing and it removes the one structural suspicion that kills schemes.
PART FOUR — DESTINY AND DELIGHT
Days 71–90: make it hold
Exercise 4.1 — Get the measure into the standing pack
Anything reviewed on a schedule persists; anything reviewed by exception does not. The chapter's version of this is the forum that meets on its fixed day with nothing on the agenda. Yours is the verification review that happens in a quiet quarter too.
Exercise 4.2 — Recruit the second owner
One person is a hobby; two is a practice. Recruit them by giving them the credit for the first counted gain. The chapter's survivors all have the property that no living member is load-bearing.
Exercise 4.3 — The log
One line per verification: date, what was measured, what was agreed, how long it took. At the end of a year you can compute a real E rather than an estimated one, and you will be the only person who can.
Exercise 4.4 — Delight (30 minutes)
Note the first time a small discrepancy was raised, checked and settled the same week, by people who then carried on working together. Small, certain, fast, public — and then the day went on.
That is what the Thursday court in Valencia has felt like for seven hundred and eighty-seven years, and it is the thing worth asking for.
KNOW YOUR SCHEME — A CHECKLIST
| Answer | Where it is written | |
|---|---|---|
| The baseline's date | ||
| Who signed it, and where the signed copy is held | ||
| The measure, as a formula | ||
| Gross or net of the cost of achieving it | ||
| The share percentage | ||
| The allocation basis — headcount, hours, salary-weighted, team-assessed | ||
| The verification period and the verifier | ||
| What happens to the baseline when a gain is realised | ||
| Whether there is a floor, a cap or a carry-forward | ||
| Where penalties and disallowances go | ||
| Whether any single member can raise a dispute alone | ||
| What the scheme costs to verify, and on which denominator |
Any blank line is this quarter's work. The last three are the ones almost nobody fills in, and they are the ones the chapter says decide whether a mechanism survives its founders.
WHAT TO ASK FOR, IN ORDER
Five asks, in ascending order of what they cost the firm. Take them in this order; each one makes the next easier to grant.
One — the signed baseline, in your hands. Free to the firm, and it is the boundary document. Until you hold it you are arguing about the rule rather than under it. If it cannot be produced, ask for it to be reconstructed and signed with today's date; a dated baseline agreed now is worth far more than an undocumented one agreed years ago.
Two — the denominator, stated. Ask that every report of the scheme's cost and every report of its yield name what it is a percentage of. Free, and it ends a whole class of argument permanently.
Three — a published ratchet schedule. If the baseline must move, ask that the schedule be published in advance so everyone can see it coming. This costs the firm nothing it was not already planning to take, and it converts an ambush into a plan somebody can work against.
Four — a fixed baseline term. Three to five years. On the arithmetic in Exercise 2.2 this is the single largest lever in the whole arrangement, and it costs the firm nothing in any year the improvement is real, because the firm is still keeping the majority share of a genuine gain.
Five — the escrow. Corrections and disallowances into a restricted fund applied to the measurement system. This is the last ask because it is the one that requires somebody in finance to open an account, and it is worth having the first four in place before you spend that goodwill.
What not to ask for first. A larger share. It is the most expensive thing on the list, the easiest to refuse, and on the numbers above it is worth less than the baseline term — a thirty percent share on a five-year fixed baseline beats a forty percent share that ratchets annually, and you can show the working.
THE CONVERSATION, SCRIPTED
For the meeting where you ask for a fixed baseline.
"I have costed the verification on this scheme. It is about three percent of verified improvement, or ten percent of the pool — those are the same number on different denominators and I have written down which I am using.
The clause I would like to discuss is the baseline. On our own numbers, a five-year fixed baseline against an annual reset is a factor of three in what the same work is worth to the team over five years. I have shown the working.
I am not asking for a larger share. I am asking for a longer baseline, which costs the firm nothing in any year the improvement is real, and I would like us to publish whatever we decide so nobody has to ask again."
Nothing in that is adversarial and every sentence is checkable. That is what operating a commons from the inside sounds like.
APPRECIATIVE QUESTIONS FOR YOUR TEAM
- What have we improved here that nobody counted, and what would it take to make it countable without hiring anyone to watch?
- When has a correction been raised and settled here the same week? What made that possible?
- If our baseline were fixed for five years, what would we start working on that we currently do not?
- Who, other than the scheme owner, would notice first if our measure stopped reflecting reality?
- What would we want this scheme to still be doing when nobody currently on the team is here?