In the last Field Notes, I promised you the piece most owners get wrong about getting their team to use AI.

I learned it from Charlie Munger, Warren Buffett’s business partner at Berkshire Hathaway.

Munger said two things about incentives that have made me millions and helped me manage hundreds of employees. When you’re solving a problem:

“Never, ever, think about something else when you should be thinking about the power of incentives.”

And my favorite one:

“If you have a dumb incentive system, you get dumb outcomes.”

Charlie didn’t hold back.

What did FedEx’s night shift teach Munger about incentives?

His favorite example of incentives was from FedEx.

FedEx runs on one nightly routine. Planes land at the hub, packages get sorted, planes take off. If the night shift runs late, the whole system backs up. Everyone loses.

And the night shift kept running late. Over and over again.

They tried to motivate the team. They tried lecturing. They tried pushing the team harder. Nothing worked.

Then someone noticed the night shift was paid by the hour. The slower they worked, the more they made.

So FedEx started paying per shift and let everyone go home once the planes were loaded.

You’ll never guess what happened. The delays disappeared almost overnight.

Nobody got more motivated. The incentive structure just stopped rewarding them for being slow.

Are you paying your team “by the hour” for AI?

Most owners rolling out AI are still paying the night shift by the hour.

One of your people uses AI to wipe out 10 hours of repetitive work a week. They come tell you. And you say, “Great. Here’s another 10 hours of work.”

You just taught your whole team to hide every hour AI saves them. Their brain thinks, “More work automated means more work for me to do.”

The same thing happens when you kick off AI in your team with: “Team, find everything you do that AI could handle.”

You THINK you’re asking for ideas. They HEAR: “Please prepare evidence for why we don’t need you anymore.”

Of course they slow-play you. That’s what the incentive is telling them to do.

So change the deal. The person who creates the capacity gets a share of the upside.

Case study: how did an 8-person CPA firm turn AI time savings into revenue?

Here’s a tactical example in a real business.

I work with an 8-person CPA firm doing just over $3M a year. They have more client demand than accountants, and they can’t grow until they find more capacity.

Their senior accountant, “Megan,” makes $120K. Every week she was burning about 20 hours on work around the real accounting:

• 8 hours chasing documents
• 5 hours prepping meeting summaries
• 4 hours reviewing emails and client notes
• 3 hours updating systems and reports

We set them up with a private AI server, so client data never leaves the firm. The first agent handled email and meetings: triaging client requests, drafting replies, gathering documents and building reports.

Six weeks later, 10 of those 20 hours were gone.

Megan’s take: “This is making my life better, and the first drafts say things better than I would have.”

Make the win loud

They posted it in Slack: “AI WIN: Megan got back 9.5 hours a week. She onboarded four new clients and cut response time from 28 hours to 3.”

At the next team meeting, the CEO gave her three minutes to show everyone how she did it. Then he handed her an “AI Accountant” award.

Now everyone in the firm wanted Megan’s secret.

Share the upside

But the applause was the easy part.

10 hours a week is 500 hours a year. The firm was short on capacity, so those hours went straight into revenue. Megan now has room for another $150K a year in client work.

The owner could have filled that time with more work for the same pay. But that’s the hourly night shift, and it would have taught Megan to hide her hours.

Instead, Megan gets 5% of the new client revenue she takes on, as long as she hits her other KPIs. On $150K, that’s $7,500.

What changes when AI pays your people?

Here’s what changed in her head.

Old belief: “If I teach AI to do my job, maybe they need fewer accountants.”

New belief: “If I get great at this, I handle a bigger book, make more money, do less admin and become the obvious pick for manager.”

Now she’s hunting for work AI can take.

• Megan gets less grunt work, more money and a faster path up.
• The business gets more capacity without hiring more accountants.
• Clients get faster answers.

Once AI pays your people, they’ll find the hours for you. Smart incentives drive smart outcomes.

Onwards, Joe

Want help putting this to work?

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