Incentive Intelligence

All Motivation – All Week – Motivation Show

Starting today I’ll be skulking around Chicago for the next 4 days.  The annual Motivation Show is in town and I’m making the annual pilgrimage to motivation mecca.

According to “inside sources” there should be over 8,000 people (some say as high as 10,000 – some say lower – but who cares – it’s a bunch!) – either as exhibitors or looky-loos.  I’m in the latter category.  

I am not exhibiting.  I am speaking at two different places…

Tuesday - I’m talking social media at the IRF education day summit.  Only one of many speakers – but I’m sure it will be the best (kidding – they are all good.)

Wednesday - I have a solo gig called “Responding to the Assault on Incentives” where I’ll walk through how to talk to clients and your own folks about incentives and their effectiveness and need – even in today’s more “enlightened” business world (think zappos and “if-then” awards coexisting.)

Then – during my free time…

I’m really hoping to do more (some) video this year of the show floor with some interviews and commentary to post either at vimeo or youtube.  I keep saying I’m going to do this but it always turns out to be harder than all the articles on video blogging say it is.  Maybe I’m just video-challenged.

I’ll be tweeting – hopefully during my presos with the help of a PowerPoint plug-in – and during the times I’m wandering the floor.  I’ll for sure be using the “official” hashtag #moti – but I’ll throw in a #good, #bad, #ugly tag now and then as I run across stuff.  Unfortunately for you all – my snark instincts go on high alert at the show so expect me to tweet out some rather snide remarks.  If I don’t it’s ‘cuz I’m either busy or I just didn’t find anything you’d find interesting.

Pay attention on Wednesday afternoon!

I (we) have an announcement – one that smart incentive companies will jump on – and not-so-smart ones will deride.  But I’ve got thick skin and I know when I’m right (even when I’m wrong.)  I think it could change the industry (or is that just hyperbole to get you to watch for my announcement – probably both.)

So – as you read this – I’m “en-route” to Chicago – the city of big shoulders, hog-butcher to the world, and for a few days in October - home of cheesy swag, gift cards, chocolate pillow gifts in the shape of corporate logos and all other manner and madness associated with “motivation.”  Abe Maslow would be proud.

It should be fun… it should be funny… it should be interesting.

See you in Chicago!

Cash VS Non-Cash Awards – It’s not a Debate. It’s A Choice. A Lazy One.

The incentive industry has pushed the “debate” on whether a company should use cash versus non-cash awards to drive behavior.  The industry’s point of view is that non-cash (merchandise, travel, other awards) create trophy value, disconnect the award and the program from compensation, is more effective (less cost for same result) and creates an “experience” that is remembered long after the award is “consumed.”

And they are right.

Research shows that all these things are inherent in non-cash awards.

(BTW – I’m not just talking incentive industry research.  Research by Ariely and others have shown that cash creates a transactional relationship between the work and the reward.  Cash creates mercenaries who want more cash.  For some research check out... The Age-Old Question: Cash versus Merchandise?, Cash Incentives vs. Merchandise – The Pros and Cons, Cash vs. noncash awards, Cash or Non-Cash awards … and How Much Is Enough?  And some of my posts:  Non-cash and pay for performance, The Upside of Irrationality, Incentives vs. commissions. )

Proponents of cash awards always talk in terms of “choice.”  Cash is the ultimate in flexibility.  If you give out cash awards the participant can get any of the things that non-cash programs offer – PLUS – anything else.  Cash is fungible and universal (is that the same thing?)  From a planning perspective it is a “pure” incentive.  Everyone wants it.  No one ever has more than they want of it.  It’s is easy to manipulate and transform into what participants really want.

And to a degree they are right.

Cash is a Choice

The bottom line though, is the facts are the facts... 

Non-cash, for both the sponsoring company and the participant – are better awards.  Yet we still see the headlines about the “debate” around which is better (see post here from @globoforce for the post that sparked this thinking.)

There is no debate.  Let me be very clear and say that again.  

There is no debate.  There is only a choice.

Companies choose cash because of the following reasons – and it has nothing to do with driving behavior or building relationships.  

Companies choose cash because… wait for it…. They are lazy.  

The Path of Least Resistance

Sorry potential client A – if you’re thinking of using cash as an award don’t try to rationalize it from a performance standpoint.  Cash doesn’t compare.  

The reasons you’re looking at cash is because:

1.  Cash is the easiest thing to use in an incentive

The systems are typically in place to issue cash to employees or vendors or channel partners.  Accounting can cut a check to almost anyone with existing systems.  Most of your administrative work can be done through existing systems.  It’s easier.

2.  You don’t want to put up with the requests from the audience for cash 

Every program that uses non-cash as an award includes some portion of the audience that “wants” cash.  Heck we all do.  But the point of your program isn’t to give the audience what they “want,”  the point of your program is to find that balance between what your COMPANY wants and needs and what your AUDIENCE wants and needs.  Like most 3-year olds – they want ice cream for breakfast even though it may not be want they should have or what they need.  Cash is ice cream to your audiences.  They ALWAYS want it but it may not be the best thing for you, your brand and truthfully – for them either.  

Face it – you’re offering cash because you’re too lazy to have the conversation with your audience when this issue comes up.

3.   It is easy to promote

$100 is a $100.  Everyone knows what a $100 buys.  I can put a picture of Ben Franklin in an email, send it out and viola!  Everyone is motivated.  Promoting non-cash awards takes some skill and creativity.  Connecting performance and effort to something that could have a variable value to your audience means you might have to do more than one email, more than one mailing, more than one discussion.  You might just have to work a couple of angles because Participant A wants a TV and participant B wants a trip to Bali.  It’s harder to create a communication campaign that creates an individual visual of the award in everyone’s mind and connects their efforts to that award.  You’re doing cash ‘cuz you don’t want to do communication.

4.  Nobody got fired for buying IBM  

That was an old saw when IBM was the king of the hill in computer hardware.  Cash is the new IBM.  Your boss is motivated by cash (you know he/she gets a big bonus!) therefore, they think everyone else is motivated by cash.  You don’t want to have a long, intelligent discussion about cash vs. non-cash with your boss because it will end up making him/her seem irrational in their pursuit of the all mighty dollar.  As my Dad used to say – “if the boss likes green ties, wear green ties.”  If the boss thinks cash is best.  Use cash.  You don’t really want to be successful and impactful.  You just want to be good enough not to get fired.  Go with cash.  No discussion there.

So… 

Bottom line.  Cash vs. Non-cash isn’t a debate.  It’s a choice.  The easy one.

But one you shouldn’t make lightly (though most do.)

The Perfect 10 Incentive Program – Ask Dudley Moore

Dudley Moore starred in a movie a few years back (actually 31 years ago –whoa!) called “10.”  The movie documented the comic travails of Moore as he followed his “perfect 10” woman around the world.  Unfortunately, the vision of this perfect woman he had created in his mind died the moment he had the opportunity to consummate his fantasy.  The movie wasn’t Oscar worthy but made huge stars of both Mr. Moore and his co-star Bo Derek.  The image at right is now iconic and oft parodied.  You know you've arrived when you become a parody-worthy (keeping my fingers crossed.)

The point being is that there are no perfect “10’s.”  Whether in love or in your incentive program. 

Most companies keep trying however.  A good number of the programs I end up analyzing for clients are a klugy compilations of every piece of twitter advice pushed at them from the four corners of the blogsphere. 

Unfortunately, the end result in the pursuit of the perfect program is a Frankenstein monster with so many pieces, parts, bells, whistles and add-ons that most participants don’t, can’t or won’t even understand the rules.

Programs Don’t Work For Everyone

Amateurs in the program design space (and I count both client sponsors and some incentive practitioners) believe they can design a program where all the participants will participate, earn awards, be recognized and walk away with warm and fuzzies for the sponsor.

Not happening.

Programs – by definition are for the “audience” not the individual.  The goal of any program is to target a certain segment of the audience that can best influence the outcome of your particular business objective.  Only 1-on-1 management with individuals can truly get into the motivational space of each person – and that’s just not an efficient use of an overall incentive program (don’t misunderstand – both should be used but that is a much longer discussion – call me.)

A program is not a panacea for performance issues – but it is an effective tool for guiding behaviors when designed correctly.  But in the pursuit of the perfect “10” program most companies end up falling way short of where they could if they’d just heed these cautions…

Simplify, Simplify

David Thoreau had it right.  Find the simple solution – complexity breeds confusion.  Confusion breeds inaction.  If I don’t know what to do – I’ll do nothing rather than risk doing something wrong.  Find the core element/behavior that can drive your goals and focus on that.  Trying to reward everything in a program will not only create a measurement and management nightmare but reduce the overall effectiveness of the program.

Incentive VS Recognition

Understand the difference.  Running a program that rewards the top 20% is not an incentive program – it’s a recognition “program.”  These programs don’t create any motivation – except in the top 20%.  The day you announce the top 20% program 80% of your audience checks out.  They know who’ll earn the award before the second day of the program.  

And let me ask this silly little question – who has the most room to grow sales (or other metric) – those that are giving you their best every day (your top 20%) or those that aren’t?  In other words – your top performers probably are giving you all they got – their incremental increase in total will be less than the incremental increase from a larger group that isn’t doing all they can.  Focus where results can be had – not where results are already occurring.

Millions of Award Choices

Hey – I like choice too… but putting too many choices in front of people without the attendant choice-making support system is sure to cause choice paralysis.  Dropping a 1,000,000 item catalog – or a gift card – in front of your audience without helping them determine what they are working hard for is just too much.  Create a way for participants to build wish lists.  Create a connection between their effort and a real and imaginable outcome.  Just providing a slurry of award options creates too much noise and not enough signal.  How do you communicate with that set up?  “Earn awards for your performance.” Or … “Earn that big screen tv you want for the World Cup because I know you’re a big fan of Spain.”  Help your participants target their award choice – don’t just dump it on them and make them find the pony.

Work Toward a Perfect “5”

Like Dudley Moore in “10” – it all sounded so good at first but once he was able to attain his “perfect 10” he found she wasn’t.  

Same with your program.  Target a much more attainable and effective outcome by scaling back your expectations.  Shoot for a 5 – you’ll be happier and so will your audience members.