The Incentive Pyramid

When something keeps going wrong despite smart people and good intentions, stop looking for the missing memo. The memo is not missing. The incentive is.

People are not stupid and they are rarely lazy. They are responding — precisely, rationally — to what the system actually rewards, which is almost never what the mission statement claims.

Read the rewards, not the rhetoric

A pyramid of incentives sits under every organisation. At the base, what gets you paid. Above it, what gets you promoted. Above that, what gets you status. The higher you climb, the less it is written down and the more it governs behaviour.

The mistake is to argue with the rhetoric. You will lose. The rhetoric is downstream of the rewards, and the rewards win every time there is a conflict.

Design, don’t exhort

The leverage is not in more communication. It is in moving one layer of the pyramid so the easy, selfish thing and the right thing point the same way.

Johnny’s verdict

Before you launch another initiative, ask the cynical question: what is the cheapest way for a rational person to look like they complied without actually doing it? Close that gap first. Everything else is theatre.