There is a mismatch between what science knows and what business does

Yep, I have been watching more TED talks.  This time…  Daniel Pink. Thanks to Tim for the link.

Daniel Pink describes a 1945 Karl Duncker social science experiment called the Candle Problem.  Subjects are shown into a room and given the objects as seen in the image to the right and are asked to attach the candle to the wall so that the wax does not drip onto the table. People start by trying all sorts of ways of melting the candle base and sticking it to the wall with the thumb tacks.

The solution is here.  but… think just a little bit before you go there 😉

The interesting part of the experiment comes when Doctor Karl introduced incentives.  Group A are first told that that they will be timed to establish averages for how long it takes to solve the problem.  Group B are told that they will be timed and the top 25% will receive $5, and the top, fastest time of the day will receive $20.

How should it work?  Which group should be fastest?  This experiment has been replicated multiple times over 40 years.  The results are always the same.  One of the groups is a degree worse, averaging three and a half minutes worse than the other.

Incentives should work…  Bonuses, performance pay… “If – then” rewards

But they don’t work here.  Group B, the incentivised lot, are three and a half minutes worse.

Three and a half minutes worse than the non-incentivized Group A.  Why does this happen?  How could this be?  How can these incentives not work?

The candle problem requires lateral, creative thinking… it is non-obvious.  If you have looked at the solution, it is not directly clear.

“There is a mismatch between what science knows and what business does” Daniel Pink. 

What type of work is being outsourced to “cheaper” locations?  It is the process driven, clear step by step type work.  What type of work is not being outsourced?  Creative, non-obvious, lateral thinking type work.

Direct incentives don’t deliver improved performance in creative, non-obvious problem, lateral thinking type work. What does?  I recommend you watch the video and see Dan tell you the three things that really do improve performance in the type of work that most professional people are engaged in:

  1. Autonomy
  2. Mastery
  3. Purpose

Author: Conor Neill

Hi, I’m Conor Neill, an Entrepreneur and Teacher at IESE Business School. I speak about Moving People to Action.

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