We know exactly how and why companies lose their edge and competitive advantage of being able decide and implement fast, to adapt, to innovate and… Be reasonable.
The hard approach to new requirements
Your company has its niche. It’s gaining market share and suddenly core, entrepreneurial-stage employees cannot be involved in day to day business. You need to be in control over your company at scale. So that’s why we have hard approach in management – you build a skeleton of policies and regulations to ensure that your way and vision will prevail at scale.
Long story short:
Wild requirement appears -> You then create appropriate procedure -> You add next element to existing matrix of processes -> With that you place an incentive either by adding percentage of employees income as premium -> The real impact of that incentive on decision making process equals, through simple linear regression model about 0 -> Frustration and miscommunication grows on both sides of the office (in fact now you have internal politics) -> New wild req. appears…
How is that we forget all we know?
We know, by scientific research, two things on requirements and incentivizing.
1. Financial incentives work only in certain mechanical tasks where procedure is very clear. When we face problem that demands cognitive effort, a bit of creativity or where procedure isn’t exactly clear (and/or can change overtime) the same incentive prevent better outcomes.
2. The first time you successfully change intrinsic, personal motivation with any kind of extrinsic (financial) motivation, you can’t go back. The moment you’ve exchanged personal motivation to create better results with financial rewards dependent on those results you’ve ruined this employee pleasure.
Those are well known facts, proven extensively, and yet when we design our companies we say “fuck all” and do the same thing from 19th century and industrial revolution. No wonder we have burnout rates skyrocketing, disengagement at work and extensive slacking practices. And then no wonder games are so popular, and from work we go home and “work hard on defeating unnecessary obstacles”.
P.S. Google: Candle Problem