How To Change Behavior

  • "We have to give them a pep talk!"
  • "Let's scold them to not do X!"
  • "We need to put up motivational posters to get better performance! Yay! High-five!"

How does the most prosperous institution in the world (the United States of America) change behavior for the greater good?

It starts with this:

  • Change the incentives.

For instance:

  • To get people investing? Lower the Fed rates.
  • To stop financial corruption? 20 years in prison.
  • To increase innovation? Freakish rewards in prize $.

You can talk/scold/motivate people to do X; but, if incentives aren't aligned such that doing X personally benefits them, they'll probably avoid X.

(Even if the behavior changes in the short-term, the non-institutionalized motivation dwindles over time, and folks revert back to their normal ways).

The Big Sales Example

Say you wants to bag big clients. What do you do?

  • Start with a big prize ($ or no $) for appointments/sales with Fortune 500 companies.

Now, what if the big prize doesn't seem to motivate your team?

  • Make the prize even bigger.  Still doesn't work? Even bigger.

(If the incentives become unprofitable, then you probably have the wrong person in the position to do X.)


Say the big prizes are working off the heeeeeeeeezzzzzyy, and you're getting too many Fortune 500 client that you could handle. What do you do?

  • Lower the incentives. Take stuff away from the big prize. You'll see motivation to bag big clients gradually decline, letting you/your-team sufficiently service your clients.

You just played BEN $&@^%^ BERNANKE of your own domain. Woohoooooo! High five!

Align your incentives, and change behavior for the greater good.


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Posted on February 25

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