Complacency and Incentives

We know complacency is a bad thing, but we are all guilty of it. But while we may not always look both ways before crossing a road, hopefully few of us are complacent to extent that major repercussions are created. But the nature of complacency means we aren’t always aware when we are doing it.

Incentives are an important part of business. These don’t have to be financial, but they have to be aligned to the long-term objectives of the organisation. When they aren’t, trouble can be caused.

A couple of things have left me pondering over complacency and incentives recently. The first is the rather obvious example of the financial crisis. Despite studying economics as part of my degree, the situation is far too big and complex for me to even begin to grasp – I’ve only recently got my head around what an ISA is.

But when you see terms like “too big to fail” and “golden parachutes” bandied around, you know that something is wrong. Short-termism appears to have been prioritised over long-term growth due to the bonus schemes of the interested parties, and people such as Umair Haque are arguing that capitalism as we know it should be destroyed. But, again, this is not something I fully understand.

I know a bit more about football (association, though my gridiron knowledge is slowly improving), and the team I support has just been relegated. And they fully deserved it.

Ever since Bobby Robson was fired for finishing 5th, the team has been a joke. Overpaid and over-the-hill players were brought in to accompany Newcastle’s innate ability to recruit inept players from foreign leagues. With their huge contracts (15 players are reputedly on more than £50,000 per week – and these contracts are usually after tax) dwarfing any win bonus, and with seemingly little pride on show, there was little incentive for the players to perform (see also: Winston Bogarde). Particularly since they are guaranteed to earn the same amount of money even after relegation.

The players were complacent; they believed their own hype and viewed their wages as symbols of their skills. When the rot set in, nothing could be done to motivate the players to increase their efforts.

I (hopefully) don’t have been problem. As has been noted, this blog has been quieter recently. Aside from weekends away, this is because I’m working longer hours, and my job is a bigger priority than this blog. This isn’t a complaint – I’m having a great time. But in a company of 12 people that largely undertakes ad hoc commissions, there is no safety net and nowhere to hide. If we don’t perform, we don’t earn.

I’m not complacent because my incentive is to contribute to keeping the company in business, and thus keep a job.

How many of the companies undergoing traumatic experiences at the moment have been complacent in the past? As companies look to restructure, they should also look to why people want to work for them. Is it the money, or the desire to succeed? Is it aligned with the company objectives, or isn’t it?

sk

Image credit: http://www.flickr.com/photos/29487767@N02/

http://www.flickr.com/photos/29487767@N02/

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Links – 8th February 2009

I know it’s overkill, but the snow excitement is yet to abate. I didn’t create this snowman, but he is so exceptional that he deserves all the publicity going.

Picture by me

Anyway, things I would recommend reading include:

• Live | Work have an absolutely brilliant post on Service Thinking – a must-read

• Umair Haque’s Smart Growth Manifesto proposes a focus on outcomes rather than incomes, connections rather than transactions, people not product, and creativity not productivity. Very thought-provoking – another must-read

• Brian Morrissey argues that banner advertising is in crisis. I wouldn’t go as far, but the industry is in danger of total commoditisation. There needs to be more inventiveness and context – the New York Times/Apple example is a great case study

• Asi Sharabi channels Sturgeon’s Law to sober up from digital. Some digital campaigns may be great, just as some TV campaigns are great and some press campaigns are great. But a lot of advertising isn’t great. There is a great observation in there about social media helping brands become more humane.

• Dave Trott’s blog is fast becoming one of my favourites – a regular must-read. I particularly love this tip on great management.

• A look at how marketing isn’t marketed very well – based on the article “Branded for Good” (Harvard Business Review)

• Silicon Alley Insider set up a Twitter contest, inviting people to propose a business model for the service. They chose a market research tool as the winner. Commenters were unimpressed – largely, I think, because the proposed revenues were quite modest. (Via Tom)

• Dom from Twitter gives the story on how the service was born

• A great synthesis on IBM’s recent research into social networks and social capital (Headshift)

• Chris Anderson lays out the thesis for his upcoming book “Free” in the Wall Street Journal

• Harvard Business Review’s breakthrough ideas for 2009

• Fred Wilson comments on Facebook opening the API for status updates by asking “Hasn’t it always been about status?”

• The Compare the Market/Meerkat campaign has been getting a lot of attention online (and rightly so). Amelia Torode, a Planner at the agency responsible, summarises the success

• And finally, Neil Perkin’s presentation on community created by the community has justifiably gone down a storm. He requested readers submit a slide, and received 30 replies (including one from myself). It highlights about both group thinking and individual ideas can be harnessed for maximum effect by some sort of moderator/curator/director/benevolent dictator. Great stuff. Click through the link above to get the transcript of the deck.

Additional links and pictures can be found at my tumblr

Hangover permitting, I’ll be at the coffee morning on Friday

sk

Links – 17th January 2009

Aside from links, this blog probably won’t be updated for a week or so. I’m trying to stick to my quality over quantity aim, and my schedule is pretty full at the moment.

Marketing

Paul Isakson posits that weird and wonderful advertising works because of the prompt that our brain receives, irrespective of what the actual message is

Advertising has been about persuading people to purchase things they don’t need. So, with overconsumption being scaled back, Brian Morrissey wonders how the industry will react

Demanding a read/write city – why interactions such as graffiti should be encouraged (Anti-Advertising Agency)

The best and worst logo redesigns of 2008 (Brand New)

Fred Wilson predicts that display advertising will become so cheap that it will outperform search. I somewhat disagree – prices may fall, and effectiveness may improve but publishers can justify premiums due to the surrounding content and context. Network display is more likely to be filtered out. However, the piece is worth reading

Technology

The Feltron 2008 Annual Report – Nicholas Felton has collated a huge amount of data about his life, and published it.Are the benefits of this self-analysis worth the expended effort? I’m not convinced but the report is fascinating, and his interest has led to the development of daytum

CJR has a fascinating two part interview with Clay Shirky

Russell Davies has some excellent ideas in his new schtick

Graeme Wood’s post on the future of television and TV advertising dovetails nicely with my post on targeted TV ads

Business

Umair Haque has a brilliant guide to 21st century economics – he argues that we have to reinvent the global economy

The mistakes that are made in the hiring of NFL coaches (via Ben)

Music

Do the BBC’s Sound of 2009 and other such polls encourage a narrow and homogenised outlook on upcoming music? (Sweeping the Nation)

Interesting look at the remuneration (or lack of) with perceived promotions e.g. I didn’t know that US radio didn’t pay royalties as it claims it is free marketing

Websites

Stack – a great idea for magazine subscriptions – a pick and mix from leading independent titles

I Wear Your Shirt – another social media get-sort-of-rich quick scheme. Pay (fee rises at $1 per transaction) for a guy to wear your t-shirt and promote it online

For the time-pressed, particular recommendation goes to Clay, Russell, Umair and Graeme

sk