Thursday, January 8, 2015

Perverse Incentives

Does it seem like you hit a brick wall every time you ever seem try to make that change or push ahead?

What is it then, that's running a counter campaign against your objectives?

Are there incentives that are outweighing the choices that your customers, stakeholders or employees are making. Not just in a commercial sense but even in what they seem to value. Incentives that may run counter culture even to what is outwardly expressed or observed.

If you are experiencing this sort of environment then step back and think about what it is that causes you to buy a product or or undertake an activity that may be against your better judgement. What was the trigger or incentive that goes on in that space for you?

It may not have even been a conscious thing, but it influenced your decisions at the time?

These are "perverse Incentives”.

If you haven't heard of them you certainly will have experienced them. They are happening every day in every way, and unless you are seeking them out and understand how they influence you and your stakeholders then you can keep doing what you do with no effect.

Perverse incentives may also be emotional or cultural and may not follow logic. They will also be affected by personal beliefs, so understanding the core default responses by others is essential in influencing or harnessing change.

Some may come from outside sources that may materialise momentarily or through social constructs or connections that have no direct contact with your business or its products.

It's the reason you change your buying habit purely because the product you don’t want, comes with something you do! It's why affluence lessens giving, and social disadvantage strengthens it. 

Its why certain communities respond to volunteerism, and others don't.
It's why a supported community will actually become less resilient.
If you understand how an adrenaline fix and a sense of purpose experienced in people responding to significant events, you will understand how this can discourage attention to preventing them taking place.

Look at how people totally remote from events want to emotionally engage with them.

If you train all your life to go to war and never see a battle then what is the outcome. Is your readiness state providing an inverse climate for other vulnerabilities or behaviours?

You may not think so at first but look below the surface and tease out the butterfly effect. On your product or service? Your people? Your service providers?

Retail marketers and strategic advisors understand this more than others but many organisational leaders often overlook these as they endeavour to drive change or introduce innovation into the business. They also write off activities or alternatively, pursue them pointlessly, because they have not understood the perverse influence that is currently in control.

Whilst some perverse incentives are enduring, others are constantly changing. So if you think you’ve found them, keep looking.

Its not all about the obvious.

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