Incentives, innovation, community

I just posted about Umair’s suggestion about a mega-version of the netflix prize. I’ve been involved with some of NESTA’s many open innovation projects (here’s Roland on one of their latest.)

It occurs to me that I and others sometimes make a default assumption about incentives and competition when setting these things up.

This morning I’ve been reflecting on various things I’ve blogged about before challenging these assumptions. Here’s the breadcrumb trail.

1. I think back to Dan Pink’s TED talk. My summary when I watched it first was:

He reports studies that show that offering incentives will increase performance for routine tasks. But for activities that require creativity or problem solving, the bigger the reward, the worse the performance.

2. Way back in 2004, Curt Rosengren spotted this stunning research.

In one experiment chimpanzees were given canvas and paint and immediately began to apply themselves to make balanced patterns of color, somewhat reminicent of certain forms of modern art, such as abstract expressionism. The significant point about this experiment is that the animals became so interested in painting and it absorbed them so completely that they had comparatively little interest left for food, sex, or the other activities that normally hold them strongly.

Then in part 2, they started rewarding the chimps for their paintings. Guess what?

Very soon their work began to degenerate until they produced the bare minimum that would satisfy the experimenter. A similar behavior can be observed in young children as they become “self-conscious” of the kind of painting the believe they are “supposed” to do. This is generally indicated to them by subtle and implicit rewards, such as praise and approval, and by the need to conform to what other children around them are doing.

3. In 2006, I linked to this Economist article (now paywaled) about Eric Von Hippel. Here’s a key snippet: (I can’t resist pointing out that you can read this little bit for free at my own blog while the Economist thinks it’s smarter to deter you from reading it at source)

At the heart of most thinking about innovation is the belief that people expect to be paid for their creative work: hence the need to protect and reward the creation of intellectual property. One really exciting thing about user-led innovation is that customers seem willing to donate their creativity freely, says Mr Von Hippel.

4. In February, I pointed to Sig asking

Does a small shareholder in a large corporation feel the ownership? Would you feel the ownership if some little clique of managers has taken charge of the whole thing, informing you occasionally through Wall Street Journal or an annual report while jetting around on your penny?

and suggesting

True ownership on the other hand has meaning, balances short and long term purposes and yields true pleasure. It binds, it drives, it makes sense, in short it’s basically human – but only ownership that transcends the legal meaning of the word.

5. This in turn reminded me of what I wrote about work I did with James on user-led innovation.

James made the point the other day that part of the new paradigm for marketing is to really allow the possibility that your customers are intelligent. It’s worth listening to them because they actually know more about their needs* than you do. You know your product… they know about their lives. If you want to spend a fortune trying to be more clever than your customers, well good luck. On the whole it might be cheaper and easier to assume they have some idea about what they need and want. And then ask yourself if you’d like to hear their feedback straight, or muddled up with the hired voices of a few carnival barkers your agency has recruited? *BTW this knowledge may not be explicit so it won’t come out in focus groups.

I’m basically challenging the whole research model of incentivising researchers to incentivise customers to hypothesise about your brand/product.

6. I also dug up this great post from Rob in 2004: Trust – Identity, Social Capital, Motivation and Blogging You really should read it all but here’s a taster, referencing Alfie Kohn’s stunning book, Punished by Rewards

So as work has got more boring, most have brought in more rewards. Kohn’s central idea is that extrinsic rewards put the focus on the reward and not the substance. We work at school to get a grade on a test not to learn. We work to get the bonus rather than to serve the customer – as we push harder to get the reward we annoy the customer. After all we are not working for them but to get our bonus and they can tell.

Rob talks at length about alternative ideas of community. And just the other day, Rob told the remarkable story of how the town of Todmorden is working to become self-sufficient in food.

In under two years, Todmorden has transformed the way it produces its food and the way residents think about the environment. Compared with 18 months ago, a third more townspeople now grow their own veg; almost seven in 10 now buy local produce regularly, an
d 15 times as many people are keeping chickens…

Ok, breadcrumb trail complete.

Of course, I’m not saying incentives are always wrong, and I’m certainly not dissing open innovation projects that use them, especially when the incentive is really money to support the further development of the idea.

But let’s be careful with those incentives folks, we may actually be wasting our money and destroying creativity rather then supporting it. And do incentives and competition create community or undermine it? And I refer back to Roland at NESTA’s mantra: Conversations first, then relationships, then transactions

1 thought on “Incentives, innovation, community

  1. The Social Enterprise

    Incentives in social media

    I found myself explaining to a client the other day why incentives don’t work very well for encouraging people to get involved in social media. Indeed, incentives can have the very opposite effect so must be handled with extreme…

    Reply

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