Getting the Incentives Right

This is from my weekly email series, The Weekly Mixtape. To get it the right way, please subscribe to the newsletter

One of the tricky things to running any business is getting the incentives right.

Take, for example, this email list. I have to come up with an incentive to get people to sign up. Then I have to give people and incentive to keep subscribed. And, if I’m really doing it right, I should have the right incentives to get people to tell their friends to sign up for the email list as well.

Based on my current numbers, I would say I could do more to get that right mix. I’m aware of that, but taking the time to reassess the incentives and doing better is a lot of work.

This all came to mind when I was recently reading about the accounting powerhouse PwC offering their employees $250 for each week they take off. As a perspective employee, that seems like a great deal: not only can you take a week off, you get a bonus that can cover a relatively inexpensive plane ticket. Sweet!

But let’s take a step back. Their employees are not taking their vacation time. The firm realizes its an issue. And their solution is…to pay their employees what will amount a .4% bonus compared to the average Big 4 accounting firm starting salary?

The only possible reasons the policy gurus thought this would get people take more PTO is because either (a) they don’t actually work at the public accounting firm where they’re setting policy, or (b) they are totally oblivious as to why their colleagues forego that time off.

Yes, some PwC accountants are very much Type A workaholics where a few hundred bucks might get them to take a week off to redecorate their kitchen. But for most they don’t take the time off because they are (often justifiably) concerned their supervisors will rate them down on their next performance review if they’re out of town when a client comes up with some ridiculous request.

The problem, then, is convincing the partners that their staff taking time off is a priority. If an employee believes they’re getting $250 now and losing out on a $10,000 a year raise later, very few are going to take that deal. If, however, the partner were to lose out on $10,000 for each employee who doesn’t clear out their accrued time off, then we’d get the incentives better aligned to getting the accountants off their computers.

But that’s probably too much on this specific problem. To generalize the issue, the tricky thing is finding the actual problem, and giving the right incentive to convince people you can solve that problem.

Many businesses stumble into the right answer and come away massively successful. More often, though are the scores of failed attempts buried in the trash heaps of history.

So when you’re trying to figure out your next step to get people to buy your product or service, or even sign up for your newsletter, think long and hard as to what you have to offer. Why on earth would people come to you?

What makes this all extra tricky is that often you can’t even ask anyone, because it turns out people often don’t know what they want themselves until they see it.

So what can you do? Put yourself in their shoes and really try to figure out why they would want what you offer. Then try to come up with the right basket to get them to give you a chance.

If it doesn’t work, don’t get discouraged. People rarely get it right on the first time. Try again. Hopefully, with enough attempts, you can find the right solution and get people on board.

The Links

• This New York Times article about the YOLO economy is fascinating and something I probably want to write about more. How will people burning out and giving up positions at good paying jobs (like those that literally pay people to take vacations) affect the economy in the long run?
• Watch out Disney Theme Park characters: the robots are coming for your jobs next!

Service Dog Update
We have definitely had a bit of a step back this week. Sherman still is behaving incredibly well when we are doing indoor excursions, but his outdoor walks have been a struggle. A lot more leaping around, including jumping towards passerby’s. I mean, I’m sure he does it as an invitation to play, but the joggers and bicyclists were less pleased at the lunging 40 pound puppy.

It was a tough week for everyone. My wife was in the hospital for a never ending migraine, and while I could have taking Sherman along for some of the long visits, I relegated him to his crate for a bit longer than usual. For a dog that is used to going everywhere for us, it seems like he took his confinement poorly, despite giving him extra attention before and after putting him in his crate.

Or maybe he’s just having another bought of adolescence.

Either way, things are more back to normal now, so hopefully he’ll settle down this week and stop jumping at the kids on the scooters. Even if he has a big doggie grin when he does it, most parents don’t take kindly to a dog jumping on their 2nd grader.