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

What matters most? What is your word for 2010?

Seth Godin asked a group of thought-provoking people to provide a word (and a 200 word essay) on what they’re thinking about as the new year rolls in. He’s turned that into a pdf called What Matters Now. Read more about the project at Seth’s blog.

I have embedded a version of the document hosted at  Those viewing via subscription may need to click through to original post here.  I like page 32 “Evangelism”, page 50 “Change” and page 59 “Fascination”.  A good read that I found from the book is Tony Hseih “Poker” (Full article: Everything I learned about Business I learnt from Poker)

The PDF is free. You can view it in the embedded Scribd player above or you can download it here. Inside you will find articles by such writers as:

… and many others. Big thoughts and small actions make a difference. What is your big thought and corresponding small action(s) for 2010?  Feel free to write your word and 200 word essay in the comments…

Weekly roundup of great ideas out there on the web #1

In the spirit of Tom Peters, I am posting a weekly roundup of some great ideas rather than a well thought through blog post this week.  I am now feeling sad to see Ireland lose to France 1-0 in the World Cup Qualifier.  We need a good performance in Paris next week.

Five big lessons from Small Shop Keepers.  I love this simple reflection on some key elements of building a successful business. Too many MBAs and first time entrepreneurs focus on the business plan, raising capital, the “exit” and not enough on the day to day operational details that are key to building a great business.
Another one on small shop keepers – The worlds greatest soda shop (and soda shop owner).  (Take 8 minutes and watch the video – it is inspiring). As you will have learnt from our small shop keepers – if you are small, you must own a niche – and the guy at the end of this link has to be the most passionate and knowledgeable soda drinker in the world.  This link came to me via Seth Godin’s blog post Everyone is Clueless.
I am reminded of a great book when thinking of “owning a niche”.  The advice from the best marketing book that I have ever read – the only statement that you can “sell” as a marketer is “We are the leader in X” – the decision for marketers is “What X?  What category can we dominate?”.  Humans have a salesperson bullshit filter that immediately blocks any statement like “our product has the best blah, blah” – we are immediately cynical – but somehow the statement “Bertoli olive oil, leader in Italy” enters without a blip.

The genius of screwups.  A great blog post from Daniel Coyle on the need for leaders to create an environment in which “falling forward” risks must be rewarded if exceptional performance is desired.  Jack Welch, John Chambers, Jeffrey Katzenberg are all quoted with pithy stuff about the need to encourage people to try new things.  In the words of Jeffrey Katzenberg, CEO of Dreamworks “If you don’t make failure acceptable, you can’t expect [movies that are] original and unique.”  This follows a line of thinking that I have been discussing with my friend Bill Treasurer, author of Courage goes to Work.  (I am working with Bill on a future Advanced Courageous Leadership seminar, any thoughts on the program are most welcome).

Beyond Excellence – S.W.P. “Seriously Weird People”.  Tom Peters suggests reaching out to some Seriously Weird People when you have a new idea or start a new business.  Keep reaching until you find a couple of people who are so far out that they more or less speak gibberish – it may be gibberish, and probably is gibberish – but perhaps, once or twice in a lifetime, it will be someone and some approach that  amounts to a blueprint for doing the work of 10,000 people with 10 people.

The value perception of books will tend to zero.  Google has its Digital Library project and is scanning through the entire human catalogue of written material to make it available digitally.  Amazon has launched the Kindle 2, a device that truly starts to make reading eBooks a pleasure – and almost better than the real thing.  Given these trends, authors and publishers will need to come to terms with a world in which the value perception of the digital content, just as in the world of digital music, tends towards zero.  It may take 10 years or 10 months, but authors will need to become like rock stars – it will be the concerts and public community events that are the future important revenue streams.  A book will just be like a nice business card.

The great news… this blog has made it into Six Minutes’ list of the top Public Speaking Blogs (at number 80, but we are only 3 months old so time, tenacity and a little bit of quality content will get us up there soon).

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