I2I - Incentive Intelligence

Incentive Programs and Building an Amateur Airplane

How many of you understand gravity?  Most of you know if something weighs more than air it falls.  And the more it weighs – the harder it falls.  So you know gravity.  

How many of you know how an airplane stays in the air?  Most of you do I’m sure.  You know that air going over the wing is slower than air going under the wing so it creates more pressure under the wing and therefore you get lift (Bernoulli Principle) – and with this principle a big, heavy, huge, object will for all intents and purposes, defeat gravity.

I’m also guessing that most of you know that in order for a plane to get airborne you need to have the wings moving fast enough to create that lift.

So… the vast majority of you know enough to build an airplane right?  It's simple...

1. Have a wing that creates lift by making the air go faster over the bottom than the top
2. Have an engine that gets the thing moving so the air goes over the wings

Ta Da!  You’re an aeronautical engineer!

I’m kidding of course.  

My point is this – no one would assume they can build a safe and effective airplane with that amount of knowledge.  That’s why we like to have people who went to school and learned the formulas, weight, lift, drag, power, etc.  We want people to design airplanes that work and work well.

Incentive Programs Are The Same

Unfortunately, most incentive programs are put together like an amateur plane.  I’ll walk you through the logic:

1. I sometimes don’t like to do something.
2. If someone offers me a reward for doing something I usually do it.
3. I like money, and Godiva chocolate as rewards
4. I have people working for me that aren’t doing something
5. Therefore, it must be because they don’t like it and they don’t have enough money or chocolate
6. I will run an incentive program that offers them money and chocolate

It Doesn't Work That Way

While some may argue that building an airplane is tough - I'd argue that understanding why people do things is just as tough (probably tougher since there are no "laws of behavior" - guidelines maybe but no laws.)

So for 2010 - take this HUGE piece of advice:

Don’t assume that because you have some basic knowledge of how people are influenced by rewards and the fact you are a person, lead you to believe you have the appropriate knowledge needed to design and run an effective incentive program.

Take a lesson from these guys (email subscribers click through for video) – having basic knowledge is a sure path to poor outcomes!

Video Clips Of Early Flight Attempts. - More amazing video clips are a click away

Prep Work - Dan Pink - A Whole New Mind

 As faithful readers know, I've been on a bit of rant lately about the way in which many are interpreting the new book by Dan Pink - "Drive - The Surprising Truth About What Motivates Us."  I received a pre-release copy prior to Christmas - but had to promise not to post a review until after January 4th.  Not really sure why they put that constraint on me but it just might have something to do with a New Year's Day event he's holding (link here.)

But there is no constraint on reviewing his last book - "A Whole New Mind".  While this book did get quite a bit of play when it came out it didn't get quite the action his new one is getting.  

I figured, it probably wouldn't be a bad idea to get re-acquainted with his previous book while putting my thoughts together on his current effort.

The Premise:

A Whole New Mind is designed to convince the reader that we are moving from the age of the Knowledge Worker - defined by Pink as one who is a "well-educated manipulator of information and employer of expertise" to one where workers will become those that have "the capacity to detect patterns and opportunities, to create artistic and emotional beauty, to craft a satisfying narrative and to combine seemingly unrelated ideas into something new."

This shift will require more "right brain" than "left brain" thinking in order to do it well.  The point being is that our left hemisphere controls logical, sequential, rules-based thinking.  The right hemisphere is designed for simultaneous, pattern-based thinking.  

He explains it well by saying "the right hemisphere is a picture; the left is the thousand words."

Why The Change?

According to Pink three things are driving the need for a "whole new mind."

1. Abundance.  We know have what we want - and in many cases 10 versions of what we want.  Function alone cannot convince us to buy an item because I can get 10 of them that do the same thing.  Focusing on form and design and esthetics separates products - those are all right-brain activities.  Because of abundance we need to focus on other reasons to buy (and to market) products.  Left-brain, logical thinking won't get it done.
    
2. Asia. What he means is outsourcing.  Pink highlights the fact that many jobs that require following rules ie: coding, accounting -  can be done overseas at a fraction of the cost of doing it here at home.  Jobs that rely on simply following and applying rules are easy to move and will continue to move to the lowest cost provider.
    
3. Automation.  Citing software that helps doctors get to a diagnosis through patient inputted answers to questions in a decision algorithms, to online law documents, the grunt work of many "knowledge" professions is being automated.  

He's Right - I didn't find anything radical in this book.  The point is well made - business is changing and a more "holistic" (if I can use that overused word) approach to business is needed.

Why It Matters to You and What It Means to Motivation and Influence

Recruiting

You should be recruiting for more "new mind" thinkers - people who can use both sides of their brain.  Too often we rely on "intelligence testing" and process success to determine who's a good fit.  Tomorrow will belong to those that can do that - AND socially integrate, see patterns in chaos and connect disparate pieces of information in new and innovative ways.  Recruiting needs to change.

Motivating

Right brain is more difficult to quantify.  Programs focused on specific behaviors and specific tasks aren't applicable.  Unfortunately, most, if not all programs, use this approach.  I always recommend behavior-based programs but even that approach will have difficulty quantifying the real effort and activity that makes up right brain work.  A new way for rewarding people will have to be included in the mix.  I'm not saying we have to do away with rewards (see my review on Drive when I can "officially" post it) but I am saying we need to look at some new criteria.

This will have profound effects on pay for performance strategies and other task-driven incentives.  When the activity you want isn't sequential, rules-based and logical - how do you reward for it?  How do you even encourage it?  

Team-Based

Not referenced in the book, but inferred by me, is the fact that as you move from doing sequential, logical tasks into a world of interpretation and understanding contexts around data - diversity of input is required.  I cannot put together disparate pieces of information if I don't have the source information from disparate sources.  

Diversity of inputs is required and that will force more team-based activities.  Teams will drive the diverse content that is the raw material of the right brain.  How do I engage and motivate the team?  What needs to change in my reward strategy to take advantage of that resource?  What behaviors should I reward - if any? 

Net-Net

The ideas in the book are good.  Most of the research is sound (sometimes it does fall into the trap of "many researchers believe" or "many scientists will admit" rather than quoting studies, data, etc.) and it does support his case.  But Pink isn't looking to solve our problems as much as sell a book.

The bottom line is that there will be a shift in the things we do and the way we engage and encourage new behaviors.  Understanding the process is important to understanding how to improve, enhance and encourage new thinking.

At least that's what my left brain is saying.  

My right brain is saying --- oohhh pretty art on the cover of the book. ;-)

Motivation And The Theory Of Everything

If you ask people "if you could be anyone who would you be?" you'll get some interesting answers.  I'm guessing a lot of people would chose someone famous, attractive, rich, pious, etc.  Most wouldn't say Michio Kaku.  But I would.  If not only for the coolness factor of being very, very, smart and being on TV on the Science Channel - but to have that great shock of gray hair ( BTW - I'd do it just for the hair.)

If I could go back in time, I'd study harder.  I'd focus more.  I wouldn't have been mean to the girl who sat next to me in 4th grade.  I'd be a physicist.  

Unfortunately, I'm not a physicist so I can't create a time machine to go back and right the wrongs of my past.  

But I have stayed at a Holiday Inn and I can play one on the internet.  And I'm as good as anyone at bending real theories and ideas into a shape that helps me make a point.

Unified Theory

In physics (and please - those that really understand this stuff don't call me out - just go with the overall flow of the logic) there is something called the Theory of Everything (TOE) and its close cousin the Grand Unification Theory (GUT.)  These theories seek to combine, under one theory, the four fundamental forces that govern our universe: the gravitational force, which keeps us from flying into outer space, the electromagnetic force, which light up our cities and energizes our lasers and our computers, and the strong and weak nuclear forces, which lights up the stars and galaxies.  

But these things don't really connect.  They explain the big stuff - black holes, planets, gravity.  They explain the little stuff - protons, neutrons, bosons, muons (really, I'm not making those names up.)  But none of the theories by themselves explain everything and the math behind them doesn't connect to each other. 

In other words we can explain what happens at a large scale and a small scale but it requires different sets of equations and assumptions.

Motivation Is EXACTLY The Same

When I peel back the onion on motivation theory and other theories that try to explain why people do things I see a similar quandary.  We can, through research, explain what a "population" will do within a distribution - meaning we can get pretty close to knowing how/why MANY people will respond to specific influences and motivational tools.  Not all - but many.  

We can also find out what an individual will do given a specific set of criteria and scenarios.  

However, these two things are disconnected and don't allow us to use one, or the other, by themselves to influence behavior.

The Big and The Small

I can, through conversations and discussions understand what will motivate an individual.  But I cannot apply that thinking to the entire group and expect the result to be positive.  There are too many variations and vagaries between individuals for these motivation keys to apply to the group.

Conversely, I can do a study and predict within a specific distribution what the majority of people will do in a given situation.  But on an individual level these predictions fall apart.

In other words we have the same problem with motivation that we have with physics.

The new "research" on motivation can be used to predict a large portion of the population - but it can't be used to motivate individual behavior.  Individual motivations can be used to motivate a specific person but it can't be used to motivate a group.

This Is Why It Is Hard

Because we have this disconnect between the rules for groups and rules for individuals it is a very difficult task to design effective incentive and motivation programs.  However, many managers take on this role not understanding that their job is to manage both theories - not just pick one and run with it.

Let Me Make It Harder

And just for fun... remember what one person does in your organization influences what others do - and therefore you not only have to know the rules that govern the population, the rules the drive the individual but you have to take into account that these things are connected and don't operate independently.

To demonstrate this idea watch the video below (email subscribers will have to click through to the post) on pendulums.  We can, through physics predict the action of a pendulum.  But add a couple more pendulums to the mix and it falls into chaos.  This is similar to your organization.  Many individuals acting on their own, and in connection with, the others in your organization.  

If you thought it was hard to manage the "big" and the "small" - now add the chaotic. 

That' what I do every day.  

Cheers.  And if we don't talk before  - and Merry Christmas, Happy Holidays, and have a great 2010.

Thinking Different Gives You Different Answers

Too often we get into habits.  Habits of thinking.  Habits of doing.  

We also assume many things are constants when they aren't.  Today on Fistful Of Talent I'm asking folks to think a bit different.  I'm asking readers to challenge some of the things they think are constants in business and do a little "imagineering."

Specifically, I'm asking companies to remove a couple of "givens" that could affect how you look at ways to engage your employee base.  The two things I bring up are company sponsored health insurance and company funded retirement plans.  Right now those are pretty much a given for many jobs.  And I believe, in many cases, these two things contribute a disproportionate amount of importance when employees decide where to work.  I also believe many companies rely heavily on these two issues to ensure employees are attracted to, and remain with, a company.

Excerpt:

"Imagine, if you will, what would happen at your company should insurance and retirement as benefits disappear?  Would you have other reasons for employees to WANT to work there?  How much of your retention and recruiting efforts are focused on and dependant on those particular benefits?  I'm guessing a lot.  I know that when I've interviewed for positions in the past, the conversation spent a lot of time on those particular things."

Jump over and comment.  Appreciate the input.