Q: How do I steer human behavior?
A: With carefully designed incentives.
I heard a story of a parent working to potty-train their toddler. They offered a skittle candy every time their young son went potty. Soon this enterprising youngster began going several times an hour. He’d hop on the toilet, tinkle a few drops, and ask for a skittle. Five minutes later he’d do it again.
“Show me the incentives – and I’ll show you the outcome”
Charlie Munger
But it’s not just kids. The greatest business leaders in the world engineer incentives to align values and motivate employees to produce desired outcomes.
If you’re looking for a great resource on how to think about creating good incentives check out this post by George Mack.
This is a must for every employer, supervisor, or parent.
Actionable Question: Where are my current incentives backfiring on me?
Best,
Andrew Nemeth