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  • The Level Up Letter - Vol. 13 - The Road To Hell Is Paved With Good...Incentives??

The Level Up Letter - Vol. 13 - The Road To Hell Is Paved With Good...Incentives??

How incentives drive behavior

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Better Board Meeting
March 15, 2024

THE LEVEL UP LETTER

Hi All!
Here is your weekly Level Up Letter.
Whether we notice them or not, there are driving factors behind everything we do. This week we’re focused on incentives.

We hope it helps create an awareness of the incentives that are driving you and the people around you as you go about your week. Please feel free to share with anyone you think might find it interesting. Enjoy!

QUOTE OF THE WEEK

THE COBRA EFFECT

2nd and 3rd order effects or The Law Of Unintended Consequences

For almost 90 years Britain ruled over India.

During this time there was a rise in the number of venomous Cobras. As a fix for the problem, the British offered a bounty. Cash for every dead cobra in hand. Seems like a solid incentive right?

Well, instead of going out and capturing wild cobras, people started breeding them. It was an easy way for people to make money in an environment of poverty. The incentive from the British actually poured fuel onto the fire.

The British quickly killed the cash program. The breeders, no longer having any need for the snakes, released them into the wild. 10x-ing the problem!

So what can we take away from this?
Incentives always have downstream effects.

Before you offer a bonus, commission, equity, make a hire, or put a plan into action you always want to think about the downstream effects.

Here are a few things to consider:

  • Is this a short-term or long-term solution?

  • What’s my/their motivation? (what’s driving you/them)

  • How can I/they cheat the system?

  • How can I mitigate failure?

  • Can I reverse or modify the incentive?

WHAT INCENTIVES DRIVE YOU?

If you want to change a behavior you have to change the incentives. In our mastermind groups we talk about using the Carrot, Stick or Other to help keep the motivation going. Nobody only uses one or the other. You have to figure out what will work best for you in each situation. Do you want to move towards pleasure or away from pain? Or do you need a third “other” option?

Positive Reinforcement: (The Carrot)
What would make the pain of change and doing the same thing over and over again, worth it to you?

Is that money? Is it a treat? Is it time away? Is it a trip?
Whatever it is, make it big enough to be a motivator, but also have a check and balance so you can’t cheat. Does walking 2 miles count or is that a cheat for your workout? Might even need a coach or some accountabilibuddies to keep you honest (wink wink, nudge, nudge)

Negative Reinforcement: (The Stick)

What would drive you to do the thing you’re avoiding, if not doing it meant something even worse happened?

A great example we’ve seen of this is a guy keeping a $100 bill on his desk next to a lighter. If he didn’t do his workout, he had to light the $100 bill on fire.

Think of the 2nd tier consequences, this would only work if A) You valued the $100 enough to not lose it B) You had the constitution to actually set it on fire.

If you wanted to take it a step further you could give it to a friend you know would light it on fire if you didn’t send them a screen grab of your workout.

Other:
Sometimes neither is what you actually need. You need someone to text you everyday. You need to build it into your calendar with a trainer. You need an introduction to a mentor….or our favorite, you need to surround yourself with other people that are putting in the work. Sometimes you don’t know, what you don’t know and you need to test and iterate until you find out what works for you.

CHALLENGE FOR THE WEEK

Write down all the incentives you notice driving behavior. Could be yours, your family, your friends, or your coworkers. We just want you to take note of the incentives that are driving the world around you.
Please share any you find interesting with us! [email protected]

HOW ARE WE DOING?

We love hearing from you all, and we’re always looking for feedback. How are we doing with the Level Up Letter? Is there anything you want more or less of? Which aspects of the newsletter do you enjoy the most?

Hit reply and say hello. Would love to hear from you!

Andy & Jason