Business Incentive Quotes

People will typically be more enthusiastic where they feel a sense of belonging and see themselves as part of a community than they will in a workplace in which each person is left to his own devices

Pick a leader who will make their citizens proud. One who will stir the hearts of the people, so that the sons and daughters of a given nation strive to emulate their leader's greatness. Only then will a nation be truly great, when a leader inspires and produces citizens worthy of becoming future leaders, honorable decision makers and peacemakers. And in these times, a great leader must be extremely brave. Their leadership must be steered only by their conscience, not a bribe.

Pick a leader who will keep jobs in your country by offering companies incentives to hire only within their borders, not one who allows corporations to outsource jobs for cheaper labor when there is a national employment crisis. Choose a leader who will invest in building bridges, not walls. Books, not weapons. Morality, not corruption. Intellectualism and wisdom, not ignorance. Stability, not fear and terror. Peace, not chaos. Love, not hate. Convergence, not segregation. Tolerance, not discrimination. Fairness, not hypocrisy. Substance, not superficiality. Character, not immaturity. Transparency, not secrecy. Justice, not lawlessness. Environmental improvement and preservation, not destruction. Truth, not lies.

In a word, we may reasonably hope for the virtual abolition of education when I'm as good as you has fully had its way. All incentives to learn and all penalties for not learning will vanish.The few who might want to learn will be prevented; who are they to overtop their fellows? And anyway the teachers--or should I say, nurses?--will be far too busy reassuring the dunces and patting them on the back to waste any time on real teaching. We shall no longer have to plan and toil to spread imperturable conceit and incurable ignorance among men. The little vermin themselves will do it for us.

There are three basic flavours of incentive: economic, social and moral.

With limited accountability, misaligned incentives, and lagging legislation, today’s governance systems and structures do not align with the sustainability of humanity or the planet that hosts us.

Pick a leader who will not only bail out banks and airlines, but also families from losing their homes -- or jobs due to their companies moving to other countries. Pick a leader who will fund schools, not limit spending on education and allow libraries to close. Pick a leader who chooses diplomacy over war. An honest broker in foreign relations. A leader with integrity, one who says what they mean, keeps their word and does not lie to their people. Pick a leader who is strong and confident, yet humble. Intelligent, but not sly. A leader who encourages diversity, not racism. One who understands the needs of the farmer, the teacher, the doctor, and the environmentalist -- not only the banker, the oil tycoon, the weapons developer, or the insurance and pharmaceutical lobbyist.

Opportunities arise by moving from silos to systems and rethinking the structures that incentivize our actions.

Like any other tool for facilitating the completion of a questionable task, rewards offer a "how" answer to what is really a "why" question.

Misaligned incentives can foster herd mentality.

We have made money our god and called it the good life. We have trained our children to go for jobs hat bring the quickest corporate advancements at the highest financial levels. We have taught them careerism but not ministry and wonder why ministers are going out of fashion. We fear coddling the poor with food stamps while we call tax breaks for the rich business incentives. We make human community the responsibility of government institutions while homelessness, hunger, and drugs seep from the centers of our cities like poison from open sores for which we do not seek either the cause or the cure. We have created a bare and sterile world of strangers where exploitation is a necessary virtue. We have reduced life to the lowest of values so that the people who have much will not face the prospect of having less. Underlying all of it, we have made women the litter bearers of a society where disadvantage clings to the bottom of the institutional ladder and men funnel to the top, where men are privileged and women are conscripted for the comfort of the human race. We define women as essential to the development of the home but unnecessary to the development of society. We make them poor and render them powerless and shuttle them from man to man. We sell their bodies and question the value of their souls. We call them unique and say they have special natures, which we then ignore in their specialness. We decide that what is true of men is true of women and then say that women are not as smart as men, as strong as men, or as capable as men. We render half the human race invisible and call it natural. We tolerate war and massacre, mayhem and holocaust to right the wrongs that men say need righting and then tell women to bear up and accept their fate in silence when the crime is against them. What’s worse, we have applauded it all—the militarism, the profiteering, and the sexisms—in the name of patriotism, capitalism, and even religion. We consider it a social problem, not a spiritual one. We think it has something to do with modern society and fail to imagine that it may be something wrong with the modern soul. We treat it as a state of mind rather than a state of heart. Clearly, there is something we are failing to see.

If we can find short-term incentives that are consistent with our long-term objectives, it is much easier to make the right decisions in the moment.

Small shifts at the appropriate levels can produce greater changes throughout systems. Incentives are strong leverage points because they represent the rules of the system and its boundaries.

He had been taught as a child that Urras was a festering mass of inequity, iniquity, and waste. But all the people he met, and all the people he saw, in the smallest country village, were well dressed, well fed, and contrary to his expectations, industrious. They did not stand about sullenly waiting to be ordered to do things. Just like Anaresti, they were simply busy getting things done. It puzzled him. He had assumed that if you removed a human being's natural incentive to work -- his initiative, his spontaneous creative energy -- and replaced it with external motivation and coercion, he would become a lazy and careless worker. But no careless workers kept those lovely farmlands, or made the superb cars and comfortable trains. The lure and compulsion of profit was evidently a much more effective replacement of the natural initiative than he had been led to believe.

Our prevailing system of management has destroyed our people. People are born with intrinsic motivation, self-respect, dignity, curiosity to learn, joy in learning. The forces of destruction begin with toddlers—a prize for the best Halloween costume, grades in school, gold stars—and on up through the university. On the job, people, teams, and divisions are ranked, reward for the top, punishment for the bottom. Management by Objectives, quotas, incentive pay, business plans, put together separately, division by division, cause further loss, unknown and unknowable.

Good management has a lot to do with incentives and decentives. It's about making sure the company has systems in place that incentivize desired behaviors and decentivize undesirable behavior.

From the earliest days at Apple, I realized that we thrived when we created intellectual property. If people copied or stole our software, we’d be out of business. If it weren’t protected, there’d be no incentive for us to make new software or product designs. If protection of intellectual property begins to disappear, creative companies will disappear or never get started. But there’s a simpler reason: It’s wrong to steal. It hurts other people. And it hurts your own character.

18 NEVER PAY YOUR LAWYER BY THE HOUR Incentive Super-Response Tendency To control a rat infestation, French colonial rulers in Hanoi in the nineteenth century passed a law: for every dead rat handed in to the authorities, the catcher would receive a reward. Yes, many rats were destroyed, but many were also bred specially for this purpose. In 1947, when the Dead Sea scrolls were discovered, archaeologists set a finder’s fee for each new parchment. Instead of lots of extra scrolls being found, they were simply torn apart to increase the reward. Similarly, in China in the nineteenth century, an incentive was offered for finding dinosaur bones. Farmers located a few on their land, broke them into pieces and cashed in. Modern incentives are no better: company boards promise bonuses for achieved targets. And what happens? Managers invest more energy in trying to lower the targets than in growing the business. These are examples of the incentive super-response tendency. Credited to Charlie Munger, this titanic name describes a rather trivial observation: people respond to incentives by doing what is in their best interests. What is noteworthy is, first, how quickly and radically people’s behaviour changes when incentives come into play or are altered and, second, the fact that people respond to the incentives themselves and not the grander intentions behind them.

That said, I dare to hope that one day the online advertising business model will die in a fucking dumpster fire; that the news media will no longer have incentives to optimize content for emotional impact but, rather, for informational utility; that technology will seek not to exploit our psychological fragility but, rather, to counterbalance it; that information will be worth something again; that anything will be worth something again.

The Industrial Revolution started and made its biggest strides in England because of her uniquely inclusive economic institutions. These in turn were built on foundations laid by the inclusive political institutions brought about by the Glorious Revolution. It was the Glorious Revolution that strengthened and rationalized property rights, improved financial markets, undermined state-sanctioned monopolies in foreign trade, and removed the barriers to the expansion of industry. It was the Glorious Revolution that made the political system open and responsive to the economic needs and aspirations of society. These inclusive economic institutions gave men of talent and vision such as James Watt the opportunity and incentive to develop their skills and ideas and influence the system in ways that benefited them and the nation. Naturally these men, once they had become successful, had the same urges as any other person. They wanted to block others from entering their businesses and competing against them and feared the process of creative destruction that might put them out of business, as they had previously bankrupted others.

While families had incentives to curtail women’s work outside the home, employers had countervailing incentives to try to tap this large potential source of workers. Early New England mill owners, for example, tried to reassure parents of the safety and propriety of letting their daughters work in their businesses by having all-female workforces, often overseen by older women who in effect were chaperons, especially when the young women lived away from home.

People act in ways to maximize their self-interest within a company, so create incentives that align employee's objectives with the organization's mission statement. Reward compliance with core values as much as profitability, especially in the face of competitive pressures.

I think my political transformation began with my exposure to the business-as-usual attitude of many civil service bureaucrats during the war; then came the attempted Communist take-over of the picture business, which a lot of my liberal friends refused to admit ever happened; next, I had a brief experience living in a country that promised the kind of womb-to-tomb utopian benevolence a lot of these liberal friends wanted to bring to America. In 1949, I spent four months in England filming The Hasty Heart while the Labor Party was in power. I saw firsthand how the welfare state sapped incentive to work from many people in a wonderful and dynamic country.

acts of violence may be easier to explain through constructs like relative deprivation in aid programming, perceived injustice among ethnic groups or business networks, local and tribal rivalries, perverse economic incentives, and traditional modes of warfare (none of which are specific to counterinsurgency theory, or even to theories of conflict at all) rather than through a counterinsurgency lens.

Because when the law implicitly or explicitly limits internal competition and bars new entrants, businesses have little, if any, incentive to innovate. As a result, regulated businesses—which include public utilities, air travel, defense, health care, and food and drugs—have fallen dangerously far behind in adopting exponential technologies. Once the disruptors do find a way in, collapse is that much more sudden.

Another Presidential election was less than two years off. There would have to be fast work to ward off disaster. Far-sighted people, North and South, even foresaw the laboring people soon forsaking both of the old parties and going Socialist. Politicians and business men shuddered at the thought of such a tragedy and saw horrible visions of old-age pensions, eight-hour laws, unemployment insurance, workingmen’s compensation, minimum-wage legislation, abolition of child labor, dissemination of birth-control information, monthly vacations for female workers, two-month vacations for prospective mothers, both with pay, and the probable killing of individual initiative and incentive by taking the ownership of national capital out of the hands of two million people and putting it into the hands of one hundred and twenty million.

Encouraging consumers to think more seriously about the financial, environmental, and personal costs of their consumption would be a major step in addressing the crisis of quality and the environmental and social impacts of too much stuff. Better yet, it would spur businesses to seek economic incentives to design and market better products. Today's secondhand economy, faltering in search of quality, should have more than it can handle.

Blogs are assailed on all sides, by the crushing economics of the business, dishonest sources, inhuman deadlines, pageview quotas, inaccurate information, greedy publishers, poor training, the demands of the audience, and so much more. These incentives are real, whether you're at The Huffington Post or some tiny blog. Taken individually, the resulting output is obvious: bad stories, incomplete stories, wrong stories, unimportant stories.

A more recent concern relates to “financialization” and associated short-termism. Financialization is the growing importance of norms, metrics, and incentives from the financial sector to the wider economy. Some of the concerns expressed are that, for example, managers are increasingly awarded stock options to align their incentives with those of shareholders; companies are often explicitly managed to increase short-term shareholder value; and financial engineering, such as share buybacks and earnings management, has become a more important part of senior managers’ jobs. The end result is that rather than finance serving business, business serves finance: the tail wags the dog. What John Kay described as “obliquity,” the idea that making money was a consequence of, or a second-order benefit of, serving one’s customers and building good businesses, is driven out (Kay 2010).

The transformation of a business-as-usual culture into one focused on innovation and driven by design involves activities, decisions, and attitudes. Workshops help expose people to design thinking as a new approach. Pilot projects help market the benefits of design thinking within the organization. Leadership focuses the program of change and gives people permission to learn and experiment. Assembling interdisciplinary teams ensures that the effort is broadly based. Dedicated spaces such as the P&G Innovation Gym provide a resource for longer-term thinking and ensure that the effort will be sustained. Measurement of impacts, both quantitative and qualitative, helps make the business case and ensures that resources are appropriately allocated. It may make sense to establish incentives for business units to collaborate in new ways so that younger talent sees innovation as a path to success rather than as a career risk.

The key issue in economics is not aligning incentives with some putative public good but aligning knowledge with power. Business investments have both a financial and an epistemic yield. Capitalism catalytically joins the two. Capitalist economies grow because they award wealth to its creators, who have already proved that they can increase it. Their tests yield knowledge because they are falsifiable; they can be exposed as wrong. Businesses are subject to failure.

Open source philosophies once promised to democratize access to cutting-edge technologies radically. Yet for AI, the eventual outcome of the high-stakes battle between open and closed systems remains highly uncertain. Powerful incentives pull major corporate powers to co-opt open source efforts for greater profit and control, however subtly such dynamics might unfold. Yet independent open communities intrinsically chafe against restrictions and centralized control over capacity to innovate. Both sides are digging in for a long fight.

Government courts seek to stay in power and maintain their influence. They depend on other parts of government for their budgets and have no incentive to go against the general agenda. Once this relationship is established, it is easy for politicians to pass laws that go completely against any rational sense of justice and have the courts behind them. Courts become part of the machine, convicting us of victimless crimes to keep police busy, keeping the politicians and their sponsors happy, and providing a flow of bodies to the prisons.

A prison is perhaps the easiest place to see the power of bad incentives. And yet in many walks of life, we find otherwise normal men and women caught in the same trap and busily making the world much less good than it could be. Elected officials ignore long-term problems because they must pander to the short-term interests of voters. People working for insurance companies rely on technicalities to deny desperately ill patients the care they need. CEOs and investment bankers run extraordinary risks—both for their businesses and for the economy as a whole—because they reap the rewards of success without suffering the penalties of failure. District attorneys continue to prosecute people they know to be innocent because their careers depend on winning cases. Our government fights a war on drugs that creates the very problem of black-market profits and violence that it pretends to solve. We need systems that are wiser than we are. We need institutions and cultural norms that make us more honest and ethical than we tend to be. The project of building them is distinct from—and, in my view, even more important than—an individual’s refining his personal ethical code.

Drive: The Surprising Truth About What Motivates Us, Daniel Pink reviews the research on human motivation for the past forty years and concludes that most businesses are ignoring what the scientific evidence clearly suggests they should do.7 They continue to manage by relying heavily on extrinsic motivators, symbolized by the proverbial carrot-and-stick approach—the use of incentives and threats. But extrinsic motivators are only effective when the work lacks inherent meaning and the potential for creativity and satisfaction, such as with assembly lines where simple rote tasks must be repeated without end.

There was no reason why Fox, which, by the time I joined, had been in business for nearly a decade and had been number one in the ratings for more than two years, should still have been running such a rinky-dink operation, with broken-down tape machines, control rooms that smelled like a sewer whenever it rained more than half an inch, chronic intentional understaffing, and a workforce composed of barely trained, underpaid children like myself. But that was the business model, and the ratings were good enough—and the on-air product was just this side of mistake-free enough—that there was no incentive for the bosses to change it.

Know then that the arbitrary appropriation by the government of men’s property results in the loss of all incentive to gain, when men realize that what they have accumulated will be taken away firom them. A loss of incentive will lead to a slackening in enterprise, the slackening being proportional to the extent and degree of confiscation. Thus if confiscation is widespread, covering all forms of economic activity, there will be a general slackening, owing to the feeling that no branch offers any longer any hope of gain. If however confiscation be mild, there will be only a relatively slight falling off in economic activity. Now the state of a society and the prosperity of business depend on the intensity of human efforts and the search for gain; should, therefore, men slacken in their economic activity the markets would slump and the state of society deteriorate. People would forsake that country and migrate elsewhere in search of gain, the result being a general depopulation and the desertion of cities. And this deterioration in society would be followed by a weakening of the State, for the State is as the Form whose condition follows that of its Matter, Society. . . Oppression ruins society, while the ruin of society leads to the weakening and destruction of the State.

Within a few centuries, the new capitalist spirit challenged the basic Christian ethic: the boundless ego of Sir Gales Overreach and his fellows in the marketplace had no room for charity or love in any of their ancient senses. The capitalist scheme of values in fact transformed five of the seven deadly sins of Christianity-pride, envy, greed, avarice, and lust-into positive social virtues, treating them as necessary incentives to all economic enterprise; while the cardinal virtues, beginning with love and humility, were rejected as 'bad for business,' except in the degree that they made the working class more docile and more amenable to cold-blooded exploitation.

received a message on LinkedIn from an IBM executive who wrote, “Pat, I’ve been at IBM for a while and I have been following your content for a few years. I make good money, but I really want to be an entrepreneur. However, I have a wife and three kids and I’m kind of worried about them. What should I do?” We emailed back and forth for a while, and I asked him questions about who he wanted to be. He began to see that intrapreneurship looked like the ideal choice for him. This is when you’re part of a company and create a new business unit, lead a new initiative, or work out incentives that reward you for driving growth and innovation. In some cases, it might just mean being so indispensable that a company has to pay you equity to retain you.

The mated males are biased. They want more females here for their own females. Many of the single males will likely have an issue, since it is tradition.” “Well if the single males want more females here, that’s the only way to do it. They’re only hurting themselves.” His fingers flexed slightly against hers. “Why do you think females would come here, anyway?” “Why wouldn’t they? I knew nothing about this sector and even after my tour I still don’t know much about it. Maybe if there was an attraction here— other than the males— it would bring more females.” He straightened and pushed up so that his hands caged her against the headboard. “This facility puts out the best warriors and we do some of the most intense and covert off-world missions. We will not have attractions here like a… carnival.” She blinked, realizing he’d misunderstood her. Unable to stop herself, a giggle escaped. She cupped the side of his face. Midnight black stubble already covered his jaw. She shivered, remembering the feel of it against her inner thighs not too long ago. “I didn’t mean that kind of attraction. I mean, give the females an incentive, like luxury housing or the chance to run a business here. There are so many business opportunities here for women. So far I’ve only seen one clothing shop and one bakery run by females.” He was silent a long moment as he watched her. “I think I might be biased too.” “How so?” “Because I want to change the law simply to please you.” The way he said it was almost grudging.

For if single women are looking for government to create a "hubby state" for them, what is certainly true is that their male counterparts have a long enjoy the fruits of a related "wifey state," in which the nation and its government supported male independence in a variety of ways. Men, and especially married wealthy white men, have a long relied on government assistance. It's a government that has historically supported white men's home and business ownership through grants, loans, incentives, and tax breaks. It has allowed them to accrue wealth and offer them shortcuts and bonuses for passing it down to their children. Government established white men's right to vote and thus exert control over the government at the nation's founding and has protected their enfranchisement. It has also bolstered the economic and professional prospects of men by depressing the economic prospects of women: by failing to offer women equivalent economic and civic protections, thus helping to create conditions whereby women were forced to be dependent on those men, creating a gendered class of laborers who took low paying or unpaid jobs doing the domestic and childcare work that further enabled men to dominate public spheres. But the growth of a massive population of women who are living outside those dependent circumstances puts new pressures on the government: to remake conditions in a way that will be more hospitable to female independence, to a citizenry now made up of plenty of women living economically, professionally, sexually, and socially liberated lives.

Because incentives trigger a primitive, engrained response, they produce a number of unintended consequences. First, they strongly reinforce self-aggrandizement, so much so that people can dedicate highly creative energy toward the counterproductive purpose of gaming the system. Second, they focus people’s attention on the incentive, rather than on customers. Third, they reduce the sense of agency and locus of control in workers, placing it instead in the hands of those who are creating the incentives and providing the rewards. This not only undermines the ability to be self-managing, it also infantilizes people. Thus it is small wonder, given the ubiquity of this practice, that Americans struggle to see themselves as engaged, empowered participants in their own democratic institutions.

Singapore's tragedy is not the absence of idealism, but that it systematically rewards the individualistic majority and discourages the socially-conscious minority. This is at odds with Singapore's self-image as a communitarian Asian society, an image conjured up largely to justify the protection of family values and paternalistic government. In truth, the overwhelming ethos is to mind your own business. Singapore's embrace of the market forces - based on the PAP's clear appreciation of the fact that people's desire to live in comfort is the most powerful force for civilisation's progress - has provided rich incentives for Singaporeans to work hard, and create wealth. But its exercise of illiberal controls to maintain ownership of the public sphere adds up to a heavy tax on thinking socially and acting politically. The public has been privatised.

Back in 1995, Munger had given a talk at Harvard Business School called “The Psychology of Human Misjudgment.” If you wanted to predict how people would behave, Munger said, you only had to look at their incentives. FedEx couldn’t get its night shift to finish on time; they tried everything to speed it up but nothing worked—until they stopped paying night shift workers by the hour and started to pay them by the shift. Xerox created a new, better machine only to have it sell less well than the inferior older ones—until they figured out the salesmen got a bigger commission for selling the older one. “Well, you can say, ‘Everybody knows that,’” said Munger. “I think I’ve been in the top five percent of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.” Munger’s

I exhaled in a breath of despondent irritation. “But that means I’ll have two jobs, the design side of things plus this,” I jabbed an unhappy finger at the screen. “This yuckiness. That doesn’t sound fair.” It wasn’t, come to think of it. Jared’s mouth slanted to the corner and I expounded on my point. “You run the business side, Kevin and Elspeth do designs, yet I’m doing designs plus the business shit now? That sucks.” Jared smirked. “You’re cute.” “Thank you.” I agreed with the sentiment. “As are you, but my cuteness has no bearing on this.” “I know,” he wrapped his arms around my waist and leaned back in the chair. “But I wanted to throw it out there. You’re very cute when you try to shirk your responsibilities.” “Does this new role come with a pay raise?” I drawled. Jared let one of his hands slide to my ass where he landed a light pat. “Wages are fixed for the near future, besides you get extra payments in kind almost every single day. What would Kevin and Elspeth say if they knew about the additional incentives I give you?

Managerial abilities, bureaucratic skills, technical expertise, and political talent are all necessary, but they can be applied only to goals that have already been defined by military policies, broad and narrow. And those policies can be only as good as strategy, operational art of war, tactical thought, and plain military craft that have gone into their making. At present, the defects of structure submerge or distort strategy and operational art, they out rightly suppress tactical ingenuity, and they displace the traditional insights and rules of military craft in favor of bureaucratic preferences, administrative convenience, and abstract notions of efficiency derived from the world of business management. First there is the defective structure for making of military decisions under the futile supervision of the civilian Defense Department; then come the deeply flawed defense policies and military choices, replete with unnecessary costs and hidden risks; finally there come the undoubted managerial abilities, bureaucratic skills, technical expertise, and political talents, all applied to achieve those flawed policies and to implement those flawed choices. By this same sequence was the fatally incomplete Maginot Line built, as were all the Maginot Lines of history, each made no better by good government, technical talent, careful accounting, or sheer hard work. Hence the futility of all the managerial innovations tried in the Pentagon over the years. In the purchasing of weapons, for example, “total package” procurement, cost plus incentive contracting, “firm fixed price” purchasing have all been introduced with much fanfare, only to be abandoned, retried, and repudiated once again. And each time a new Secretary of Defense arrives, with him come the latest batch of managerial innovations, many of them aimed at reducing fraud, waste, and mismanagement-the classic trio endlessly denounced in Congress, even though they account for mere percentage points in the total budget, and have no relevance at all to the failures of combat. The persistence of the Administrator’s Delusion has long kept the Pentagon on a treadmill of futile procedural “reforms” that have no impact at all on the military substance of our defense. It is through strategy, operational art, tactical ingenuity, and military craft that the large savings can be made, and the nation’s military strength greatly increased, but achieving long-overdue structural innovations, from the central headquarters to the combat forces, from the overhead of bases and installations to the current purchase of new weapons. Then, and only then, will it be useful to pursue fraud, waste, and mismanagement, if only to save a few dollars more after the billions have already been saved. At present, by contrast, the Defense Department administers ineffectively, while the public, Congress, and the media apply their energies to such petty matters as overpriced spare parts for a given device in a given weapon of a given ship, overlooking at the same time the multibillion dollar question of money spent for the Navy as a whole instead of the Army – whose weakness diminishes our diplomatic weight in peacetime, and which could one day cause us to resort to nuclear weapons in the face of imminent debacle. If we had a central military authority and a Defense Department capable of strategy, we should cheerfully tolerate much fraud, waste, and mismanagement; but so long as there are competing military bureaucracies organically incapable of strategic combat, neither safety nor economy will be ensured, even if we could totally eliminate every last cent of fraud, waste, and mismanagement.

If there are costs to becoming legal, there are also bound to be costs to remaining outside the law. We found that operating outside the world of legal work and business was surprisingly expensive. In Peru, for example, the cost of operating a business extralegally includes paying 10 to 15 per cent of its annual income in bribes and commissions to authorities. Add to such payoffs the costs of avoiding penalties, making transfers outside legal channels and operating from dispersed locations and without credit, and the life of the extralegal entrepreneur turns out to be far more costly and full of daily hassles than that of the legal businessman. Perhaps the most significant cost was caused by the absence of institutions that create incentives for people to seize economic and social opportunities to specialize within the market place. We found that people who could not operate within the law also could not hold property efficiently or enforce contracts through the courts; nor could they reduce uncertainty through limited liability systems and insurance policies, or create stock companies to attract additional capital and share risk. Being unable to raise money for investment, they could not achieve economies of scale or protect their innovations through royalties and patents.

Here’s the four point battle plan, which we’ll return to at the end of the book: Disregard the Doomsayers: The misguided belief that “it’s too late” to act has been co-opted by fossil fuel interests and those advocating for them. It’s just another way of legitimizing business-as-usual and a continued reliance on fossil fuels. We must reject the overt doom and gloom that we increasingly encounter in today’s climate discourse. A Child Shall Lead Them: The youngest generation is fighting tooth and nail to save their planet, and there is a moral authority and clarity in their message that none but the most jaded ears can fail to hear. They are the game-changers that climate advocates have been waiting for. We should model our actions after theirs and learn from their methods and their idealism. Educate, Educate, Educate: Most hard-core climate-change deniers are unmovable. They view climate change through the prism of right-wing ideology and are impervious to facts. Don’t waste your time and effort trying to convince them. But there are many honest, confused folks out there who are caught in the crossfire, victims of the climate-change disinformation campaign. We must help them out. Then they will be in a position to join us in battle. Changing the System Requires Systemic Change: The fossil fuel disinformation machine wants to make it about the car you choose to drive, the food you choose to eat, and the lifestyle you choose to live rather than about the larger system and incentives. We need policies that will incentivize the needed shift away from fossil fuel burning toward a clean, green global economy. So-called leaders who resist the call for action must be removed from office.

DON’T LET YOUR CULTURE BECOME TOXIC SUCCESSFUL START-UPS often begin with a culture where people challenge one another directly and even fiercely, but also show they care personally. That’s because they start small, involve people who get to know each other really well, and are fighting for survival. However, as the business grows and new people join the firm, it’s impossible to know everyone’s name, let alone to have strong relationships with everyone. The kind of super-direct challenges that are easy when people know each other well become difficult. Not wanting to lose the friendly culture of the early days, many hesitate to speak up when they see problems, backing off of Challenge Directly and retreating to Ruinous Empathy. Because Obnoxious Aggression is more effective than Ruinous Empathy, that kind of behavior has an advantage; people who behave badly begin to win, rising in the company. When confronted with a powerful jerk, many people retreat to Manipulative Insincerity, more out of instinctive self-protectiveness than intentional wrongdoing. In this kind of environment, there’s an incentive to retreat to Manipulative Insincerity in front of those who are more senior to them, and resort to Obnoxious Aggression with those who are less powerful. The culture becomes toxic—many kissing up and kicking down, few willing to speak truth to power. This kind of behavior won’t kill a company right away. Instead, it leads to a slow, painful death of innovation, and lives of quiet desperation. That’s the bad news. The good news is that many companies large and small are now taking active measures to shift to a culture in which caring personally and challenging directly go hand in hand. When people learn to do both simultaneously, bad behavior no longer gives anyone an advantage. Bad behavior is punished not rewarded, the truth comes out, and the environment is more conducive to both success and happiness.

The quality of our thinking is largely influenced by the mental models in our heads. While we want accurate models, we also want a wide variety of models to uncover what’s really happening. The key here is variety. Most of us study something specific and don’t get exposure to the big ideas of other disciplines. We don’t develop the multidisciplinary mindset that we need to accurately see a problem. And because we don’t have the right models to understand the situation, we overuse the models we do have and use them even when they don’t belong. You’ve likely experienced this first hand. An engineer will often think in terms of systems by default. A psychologist will think in terms of incentives. A business person might think in terms of opportunity cost and risk-reward. Through their disciplines, each of these people sees part of the situation, the part of the world that makes sense to them. None of them, however, see the entire situation unless they are thinking in a multidisciplinary way. In short, they have blind spots. Big blind spots. And they’re not aware of their blind spots. [...] Relying on only a few models is like having a 400-horsepower brain that’s only generating 50 horsepower of output. To increase your mental efficiency and reach your 400-horsepower potential, you need to use a latticework of mental models. Exactly the same sort of pattern that graces backyards everywhere, a lattice is a series of points that connect to and reinforce each other. The Great Models can be understood in the same way—models influence and interact with each other to create a structure that can be used to evaluate and understand ideas. [...] Without a latticework of the Great Models our decisions become harder, slower, and less creative. But by using a mental models approach, we can complement our specializations by being curious about how the rest of the world works. A quick glance at the Nobel Prize winners list show that many of them, obviously extreme specialists in something, had multidisciplinary interests that supported their achievements. [...] The more high-quality mental models you have in your mental toolbox, the more likely you will have the ones needed to understand the problem. And understanding is everything. The better you understand, the better the potential actions you can take. The better the potential actions, the fewer problems you’ll encounter down the road. Better models make better decisions.

Six Steps to Getting Started Right Now As we saw from the stories in Chapter 1, you don’t need a lot of money or special training to operate a business. You just need a product or service, a group of people who want to buy it, and a way to get paid. We’ll look at each of these things in more detail throughout the book, but you don’t have to wait to get started. Here are the six steps you need to take: 1. Decide on your product or service. 2. Set up a website, even a very basic one (you can get a free one from WordPress.org). 3. Develop an offer (an offer is distinct from a product or service; see Chapter 7 for help). 4. Ensure you have a way to get paid (get a free PayPal account to start). 5. Announce your offer to the world (see Chapter 9 for more on this). 6. Learn from steps 1 through 5, then repeat. Almost all microbusiness building follows this sequence of events. Of course, we’ll be discussing specifics as we go along, but it’s always better to start from where you are than to wait for everything to be perfect. If you have an existing business and are thinking about how to apply the concepts from this book, focus on either getting money in the bank or developing new products or services. These are the most important tasks of your business-not administration, maintenance, or anything else that takes time without creating wealth or value. If you’re not sure what to do, think about any of these ideas: Can you contact your customer list with a special offer or incentive? Can you introduce a new product or service to complement your existing portfolio? If you’re a coach or consultant, can you offer a special deal for clients who prepay? Is there a new way you can attract subscribers, clients, or customers? But one way or another . . . just do something.

truth is, you don’t need Super Bowl ads. Instead, as a company of one, you can be more effective by writing guest articles for websites and blogs, creating incentive programs for existing clients, or appearing in podcasts that cover your industry.

Look at stocks as part ownership of a business. 2. Look at Mr. Market—volatile stock price fluctuations—as your friend rather than your enemy. View risk as the possibility of permanent loss of purchasing power, and uncertainty as the unpredictability regarding the degree of variability in the possible range of outcomes. 3. Remember the three most important words in investing: “margin of safety.” 4. Evaluate any news item or event only in terms of its impact on (a) future interest rates and (b) the intrinsic value of the business, which is the discounted value of the cash that can be taken out during its remaining life, adjusted for the uncertainty around receiving those cash flows. 5. Think in terms of opportunity costs when evaluating new ideas and keep a very high hurdle rate for incoming investments. Be unreasonable. When you look at a business and get a strong desire from within saying, “I wish I owned this business,” that is the kind of business in which you should be investing. A great investment idea doesn’t need hours to analyze. More often than not, it is love at first sight. 6. Think probabilistically rather than deterministically, because the future is never certain and it is really a set of branching probability streams. At the same time, avoid the risk of ruin, when making decisions, by focusing on consequences rather than just on raw probabilities in isolation. Some risks are just not worth taking, whatever the potential upside may be. 7. Never underestimate the power of incentives in any given situation. 8. When making decisions, involve both the left side of your brain (logic, analysis, and math) and the right side (intuition, creativity, and emotions). 9. Engage in visual thinking, which helps us to better understand complex information, organize our thoughts, and improve our ability to think and communicate. 10. Invert, always invert. You can avoid a lot of pain by visualizing your life after you have lost a lot of money trading or speculating using derivatives or leverage. If the visuals unnerve you, don’t do anything that could get you remotely close to reaching such a situation. 11. Vicariously learn from others throughout life. Embrace everlasting humility to succeed in this endeavor. 12. Embrace the power of long-term compounding. All the great things in life come from compound interest.

Furthermore, for a platform business, user commitment and active usage, not sign-ups or acquisitions, are the true indicators of customer adoption. That’s why platforms must attract users by structuring incentives for participation—preferably incentives that are organically connected to the interactions made possible by the platform. Traditionally, the marketing function was divorced from the product. In network businesses, marketing needs to be baked into the platform.

Quick communication discourages reflection and thoughtfulness and is notoriously error prone; cheap communication provides little or no incentive to get the message right the first time; and easy communication has fooled us into thinking that interactions require little or no effort.

Remember, ethical fading is about self-delusion. Anyone, regardless of their personal moral compass, can succumb to it. The leaders we point out and vilify for running their businesses unethically and then accepting a handsome reward for doing so don’t think they’ve done anything wrong. And if you don’t think you are doing anything wrong, what incentive do you have to do things differently?

It is a fundamental mistake when companies with leadership problems, with inconsistent or exhausting management use incentives or well-being measures as a last resort instead of changing their leadership style or culture.

The Joy of Self-Care It can be a joy to take care of yourself and you deserve it. You already know that you deserve to take a shower and brush your teeth. In fact, more self-care is deserved than that. You need to pay attention to your body, mind, and spirit. If you take time out every day to take care of yourself, you will be more productive, a brighter light and a support in the world. Gradual Morning Movement Get up early enough to have time to do a routine in the morning. At least, take a moment to rest before getting out of bed. Grab a couple of takes. Allow yourself in bed to wake up. Perform a few simple laps. Make sure you have time to eat a good breakfast when you get out of bed, clean and floss your teeth, and go out for a breath of fresh air before getting on with your busy day. Enjoying yourself before you prepare your day is good for you. It is said you are blocked from enlightened bliss by discontent and too much seriousness and are signals that you are attached to your physical body and the world's cares. Lightening is healthy for body, mind, and spirit all around. You can still participate in the world with more lightness and non-attachment to the results, and care about the state of affairs. In other words, do your world's best job without incentive aspirations. Let the job be where you find happiness. Let self-care be the same. Please take care of yourself. Eating the Rainbow When shopping for food, pick up food in all the rainbow colors. Look for recipes online if there's a food of a certain color and it's new to you. Ask friends and colleagues if they have any season and swap favorite recipes. Please try new things and see how many different colors in one day you can eat. For the Good of All You help yourself and those around you when you take care of yourself. You are a light for others by being healthy, and a model of how good health might look and feel. As you get healthy, others will wonder how you've done that. Taking pleasure in taking care of yourself makes it possible for others to see that it is possible and feel good doing the same thing. And, you have the energy and ability to give back when you're healthy.

Here’s how it worked: The federal government would cap the amount of greenhouse gas companies could emit, leaving it up to each company to figure out how to hit those targets. Companies exceeding their limit would pay a penalty. Companies that stayed below their limit could sell their unused pollution “credits” to less-efficient businesses. By setting a price on pollution and creating a market for environmentally friendly behavior, a cap-and-trade approach gave corporations an incentive to develop and adopt the latest green technologies; and with each technological advance, the government could lower the caps even further, encouraging a steady and virtuous cycle of innovation.

The lawyer's job is to make the infringer's counterfeiting activity sufficiently risky that the counterfeiter has no incentive to continue, or that they switch to other businesses not affecting the lawyer’s clients.

The larger truth that I failed to see turned out to be another of those paradoxes—like the discounters’ principle of the less you charge, the more you’ll earn. And here it is: the more you share profits with your associates—whether it’s in salaries or incentives or bonuses or stock discounts—the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit in this business lies, not in trying to drag strangers into your stores for one-time purchases based on splashy sales or expensive advertising. Satisfied, loyal, repeat customers are at the heart of Wal-Mart’s spectacular profit margins,

of climate change. What was needed was a massive nudge in the right direction. In the past, the stick of regulation and the rod of taxation were the methods that environmentalists believed could break the fossil fuel economy. But the Inflation Reduction Act doesn’t rely on such punitive tactics, because Manchin culled them from the bill. Instead, it imagined that the United States could become the global leader of a booming climate economy, if the government provided tax credits and subsidies, a lucrative set of incentives. There was a cost associated with the bill. By the Congressional Budget Office’s score, it offered $386 billion in tax credits to encourage the production of wind turbines, solar panels, geothermal plants, and battery storage. Tax credits would reduce the cost of electric vehicles so that they would become the car of choice for Middle America. But $386 billion was an estimate, not a price tag, since the legislation didn’t cap the amount of money available in tax credits. If utilities wanted to build more wind turbines or if demand for electric vehicles surged, the government would keep spending. When Credit Suisse studied the program, it estimated that so many businesses and consumers will avail themselves of the tax credits that the government could spend nearly $800 billion. If Credit Suisse is correct, then the tax credits will unleash $1.7 trillion in private sector spending on green technologies. Within six years, solar and wind energy produced by the US will be the cheapest in the world. Alternative energies will cross a threshold: it will become financially irresponsible not to use them. Even though Joe Biden played a negligible role in the final negotiations, the Inflation Reduction Act exudes his preferences. He romanticizes the idea of factories building stuff. It is a vision of the Goliath of American manufacturing, seemingly moribund, sprung back to life. At the same time that the legislation helps to stall climate change, it allows the United States to dominate the industries of the future. This was a bill that, in the end, climate activists and a broad swath of industry could love. Indeed, strikingly few business lobbies, other than finance and pharma, tried to stymie the bill in its final stages. It was a far cry from the death struggles over energy legislation in the Clinton and Obama administrations, when industry scuppered transformational legislation. The Inflation Reduction Act will allow the United States to prevent its own decline. And not just economic decline. Without such a meaningful program, the United States would have had no standing to prod other countries to respond more aggressively to climate change. It would have been a marginal player in shaping the response to the planet’s greatest challenge. The bill was an investment in moral authority.

Three American business school professors decided to find out. In a first-of-its-kind study, they analyzed more than 26,000 earnings calls from more than 2,100 public companies over six and a half years using linguistic algorithms similar to the ones employed in the Twitter study. They examined whether the time of day influenced the emotional tenor of these critical conversations—and, as a consequence, perhaps even the price of the company’s stock. Calls held first thing in the morning turned out to be reasonably upbeat and positive. But as the day progressed, the “tone grew more negative and less resolute.” Around lunchtime, mood rebounded slightly, probably because call participants recharged their mental and emotional batteries, the professors conjectured. But in the afternoon, negativity deepened again, with mood recovering only after the market’s closing bell. Moreover, this pattern held “even after controlling for factors such as industry norms, financial distress, growth opportunities, and the news that companies were reporting.”8 In other words, even when the researchers factored in economic news (a slowdown in China that hindered a company’s exports) or firm fundamentals (a company that reported abysmal quarterly earnings), afternoon calls “were more negative, irritable, and combative” than morning calls.9 Perhaps more important, especially for investors, the time of the call and the subsequent mood it engendered influenced companies’ stock prices. Shares declined in response to negative tone—again, even after adjusting for actual good news or bad news—“leading to temporary stock mispricing for firms hosting earnings calls later in the day.” While the share prices eventually righted themselves, these results are remarkable. As the researchers note, “call participants represent the near embodiment of the idealized homo economicus.” Both the analysts and the executives know the stakes. It’s not merely the people on the call who are listening. It’s the entire market. The wrong word, a clumsy answer, or an unconvincing response can send a stock’s price spiraling downward, imperiling the company’s prospects and the executives’ paychecks. These hardheaded businesspeople have every incentive to act rationally, and I’m sure they believe they do. But economic rationality is no match for a biological clock forged during a few million years of evolution. Even “sophisticated economic agents acting in real and highly incentivized settings are influenced by diurnal rhythms in the performance of their professional duties.

IBM’s marketing train wreck and Apple’s bewildering product lineup were fueled by a similar cause: decentralized businesses each had enough power to add stuff, but not enough to stop others from doing so, too. This is a twist on Hardin’s tragedy of the commons. Each business had incentives for adding yet another campaign or product, but each addition hurt IBM and Apple by confusing customers and wasting money. Although management gurus often bad-mouth leaders who exercise “command and control,” as Lou Gerstner and Steve Jobs did, sometimes that’s just what a broken organization needs.

In the course of the 1960s, the left adopted almost wholesale the arguments of the right,” observed Daniel Patrick Moynihan, a domestic policy adviser to all three of the decade’s presidents. “This was not a rude act of usurpation, but rather a symmetrical, almost elegant, process of transfer.” Exaggerating for effect—but not to the point of inaccuracy—Moynihan remembered that by decade’s end, “an advanced student at an elite eastern college could be depended on to avow many of the more striking views of the Liberty League and its equivalents in the hate-Roosevelt era; for example that the growth of federal power was the greatest threat to democracy, that foreign entanglements were the work of demented plutocrats, that government snooping (by the Social Security Administration or the United States Continental Army Command) was destroying freedom, that the largest number of functions should be entrusted to the smallest jurisdictions, and so across the spectrum of this viewpoint.”2 Driven primarily by the expanding war in Vietnam, this new current on the left took up individualistic and anti-statist themes that were once the province of the right. Another part of this convergence was the rise of the economics profession. The new economics appeared a success on its own terms; growth had picked up across the Kennedy years. By 1965, GNP had increased for five straight years. Unemployment was down to 4.9 percent, and would soon drop below the 4 percent goal of full employment. As James Tobin reflected, “economists were riding the crest of a wave of enthusiasm and self-confidence. They seemed, after all, to have some tools of analysis and policy other people didn’t have, and their policy seemed to be working.”3 With institutional economics a vanquished force, most economists accepted the tenets of the neoclassical revolution: individuals making rational choices subject to the incentives created by supply and demand. Approaching policy with an economic lens cut across established political lines, which were often the creation of brokered coalitions, habit, or historical precedent. Economic analysis was at once disruptive, since it failed to honor these accidental accretions, and familiar, since it spoke a market language resonant with business-friendly political culture.4 Amid this ideological confluence, Friedman continued his dour rumblings and warnings. Ignoring the positive trends in basic indicators of economic health, from inflation to unemployment to GDP, he argued fiscal demand management was misguided, warned Bretton Woods was about to collapse, predicted imminent inflation, and castigated the Federal Reserve’s basic approach. Friedman’s quixotic quest—and the media attention it generated—infuriated many of his peers. Friedman, it seemed, was bent on fixing economic theories and institutions that were not broken.

the psychological structures and incentive systems that we are trying to help the client change affect us as well.

The rich will never be taxed. More and more often we see governments use the tax laws to provide incentives to business owners and investors to create jobs and housing. These incentives reduce the taxes of the rich. So the only place for the government to drive tax revenue is from the middle class.

Convention also dictates that ‘big is beautiful’, but every time one of our ventures gets too big we divide it up into smaller units. I go to the deputy managing director, the deputy sales director and the deputy marketing director and say, ‘Congratulations. You’re now the MD, the sales director and the marketing director of a new company.’ Each time we’ve done this, the people involved haven’t had much more work to do, but necessarily they have a greater incentive to perform and a greater zest for their work.

Raising from Series A/B firms for a seed Bringing a Series A/B firm in for a seed round is risky business. They’ll want to talk to you to get an early look and learn about what you’re up to. But don’t get too excited! In fact, I’d recommend avoiding those conversations entirely. Whatever capital they commit will be trivial relative to their total balance sheet. No Series A/B firm is serious unless they lead your A or B, and, if for some reason they decide not to do so, you’re screwed because that’s a red flag for other investors. This is called “signaling risk.” Basically, by investing in your seed, they intend to block out others from your next round. It’s a win-win for them because they either lead your next round from a privileged position or, they pass and you’re the one who’s screwed as a founder. So, your incentives are completely misaligned! You may have heard success stories, but that’s a sampling bias — you’ll rarely hear about the companies that do not get the follow-on term sheet. Note: A fund investing in your company at the seed stage is completely irrelevant to their willingness to write a check to lead your Series A or B. The only thing that determines their willingness to invest is your traction and momentum. Letting them in makes them no more willing to invest, and anyone who tries to convince you otherwise is deceiving you. There might be relationship benefits, but you can build on the relationship without letting them on your cap table!

Key 9: Prioritize and incent innovation

Skin in the game’ is an important psychological tool to harness if you want to accelerate your learning curve in any area of your life. Having skin in the game raises the stakes of your learning by building deeper psychological incentives to perform a behaviour. The ‘skin’ can be anything from money to a personal public commitment.

As BusinessWeek put it during the heart of a bear market long ago, “For investors…low stock prices remain a disincentive to buy.” But if the value of the business is solid, a declining stock price should be an incentive to buy, because it enables you to get more shares for less. And if the stock price drops below the business value, you have that rare opportunity that Graham called a “margin of safety”—the assurance that you can increase your stake for less than what it is actually worth.

In the hallowed halls of businesses (and business schools) around the world, B. F. Skinner is the hidden king. Skinner was one of the major intellectual forces behind the “behaviorist” movement in psychology—the idea that biological systems always respond a certain way to certain stimuli. Control the stimuli and you can control the behavior. “Condition” the organism with rewards and punishments, and the organism will learn how to behave. Over the decades, behaviorism has fallen out of vogue in psychology—research has made it clear that there’s far more to behavior than the carrot and the stick. But that understanding hasn’t extended to business practice—in corporations and business-school classrooms around the world, the search continues for the magic incentive that will make people do what businesses want.

Robert Zion, the social psychologist, once described cognitive psychology as ‘social psychology with all the interesting variables set to zero’. The point he was making is that humans are a deeply social species (which may mean that research into human behaviour or choices in artificial experiments where there is no social context isn’t really all that useful). In the real world, social context is absolutely critical. For instance, as the anthropologist Pierre Bourdieu observes, gift giving is viewed as a good thing in most human societies, but it only takes a very small change in context to make a gift an insult rather than a blessing; returning a present to the person who has given it to you, for example, is one of the rudest things you can do. Similarly, offering people money when they do something you like makes perfect sense according to economic theory and is called an incentive, but this does not mean you should try to pay your spouse for sex.*

Both American and British law had long given special protection to shipowners whose vessels, through negligent handling, caused damage to others. The risks of sending ships to sea were so great that some special incentive was needed, if maritime nations were to grow and prosper. Moreover, on land the factory owner could at least theoretically oversee the acts of his employees, but the shipowner had no such control over his captain and crew. By the very nature of the business he was usually out of touch, and it seemed unfair to hold him to the same degree of responsibility when something went wrong. Therefore, as long as he did not have “privity or knowledge” of the negligence, his liability would be limited.

Mental health is an enormous business; in the United States, more money is spent on mental health conditions than any other medical specialty, with an estimated $201 billion spent in 2013 alone and an estimated increase to $280 billion by 2020 (Substance Abuse and Mental Health Services Administration, 2014). More than half of the budget for the American Psychiatric Association is income received directly from pharmaceutical companies, and drug-makers are the most frequent and largest donors of mental health advocacy groups (see, e.g., Harris, 2009). Speaking and consulting gigs for the pharmaceutical industry can earn psychiatrists up to $1 million or more in direct fees per year,4 and at least 70% of the professionals making up the task force for the DSM were tied to pharmaceutical companies (Cosgrove & Krimsky, 2012), raising concerns about corporate interests reflected in practice and policy and accusations of disease mongering (Moynihan, Heath, & Henry, 2002). The incentive for ensuring the medical and biological framework for conceptualizing problems in living is huge.

Here are four examples of Lead Magnets I use: A checklist that can be used to properly perform something I explained in a video. A template for determining, say, a business’s profit margin. An advanced guide that goes further into the details of a subject of one of my videos. A unique book that provides substantial value but is offered for free. For me, it is 11 Side Hustle Ideas to Make $500/Day from Your Phone. The appropriate opt-in incentive depends on your content. Here are other types of examples: A DIY carpenter could offer plans to make a corner table. A marketing YouTuber could offer scripts of what to say on sales phone calls. A landscaping expert might offer recommendations for which kinds of grass to use around the United States. YouTuber Nick True at Mapped Out Money, who makes video tutorials that teach the best practices for using the personal budgeting software YNAB, found that he gets the highest sign-up rates when he offers a checklist that relates to the video. His followers really like having a resource that they can use to put his advice into practice. Jess Dante of Love and London runs a YouTube channel helping viewers plan their trips to London by suggesting lesser-known restaurants and stores to visit. Her superstar opt-in incentive is a free London 101 Guide with everything a first-time visitor needs to know. It’s been downloaded more than 45,000 times. Where you make your call to action will also have an impact on your success building your email list. You can make your call to action in a variety of places or ways inside your videos. One of the best ways is to give a short, relevant tease of the bonus or resource you’re offering within the YouTube video and tell people where they can learn more. CHALLENGE Create a Lead Magnet. It’s time to create your first Lead Magnet using the process we’ve just outlined above. You can use your piece of content from the previous chapter as a base or start something new. Don’t spend more than two hours on the first iteration. If you want to turn it into a big thing later on, great. But start SMALL. Go to MillionDollarWeekend.com to get Lead Magnet templates! (See what I did there?)

In institutional settings, we need to be alert to the wide divergence between what is good for the company and what is good for the individual. Ironically, the kind of incentives we put in place to encourage people to perform may lead to them to be unwilling to take any risks that have a potential personal downside – even when this would be the best approach for the company overall. For example, preferring a definite 5 per cent gain in sales to a 50 per cent chance of a 20 per cent gain. Why else do you think Management Consultancies are so rich?

I believe in the power of business to positively shape the world. It was the business opportunity offered by the legalization of cannabis that provided the practical incentives to destigmatize its use and reverse decades of injustice and harmful propaganda. Whether it is cannabis legalization or emerging products, technologies or industries, we must embrace disruption. Change is good, change is opportunity. Change is evolution.

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The reason that Nogales, Arizona, is much richer than Nogales, Sonora, is simple; it is because of the very different institutions on the two sides of the border, which create very different incentives for the inhabitants of Nogales, Arizona, versus Nogales, Sonora. The United States is also far richer today than either Mexico or Peru because of the way its institutions, both economic and political, shape the incentives of businesses, individuals, and politicians. Each society functions with a set of economic and political rules created and enforced by the state and the citizens collectively. Economic institutions shape economic incentives: the incentives to become educated, to save and invest, to innovate and adopt new technologies, and so on. It is the political process that determines what economic institutions people live under, and it is the political institutions that determine how this process works. For example, it is the political institutions of a nation that determine the ability of citizens to control politicians and influence how they behave. This in turn determines whether politicians are agents of the citizens, albeit imperfect, or are able to abuse the power entrusted to them, or that they have usurped, to amass their own fortunes and to pursue their own agendas, ones detrimental to those of the citizens. Political institutions include but are not limited to written constitutions and to whether the society is a democracy. They include the power and capacity of the state to regulate and govern society. It is also necessary to consider more broadly the factors that determine how political power is distributed in society, particularly the ability of different groups to act collectively to pursue their objectives or to stop other people from pursuing theirs.

Our team of specialists is well trained, certified and highly skilled to fix your auto body repair and remove any car dent you may have. With over 30 years of experience providing car collision repair, car detailing, used car inspections, or any car body repair services necessary, we guarantee our workmanship will make your car look good as new as quickly as possible. Another procedure which we are skilled at is paintless dent removal. It is a cost effective way to repair minor dents and dings in which the car paint or metal have not been stretched. The reason it is so cost effective is because there is no need for filling or painting the car. It takes an experienced hand to do paintless dent repair, because in the wrong hands it can create more dents and scratches to the car. We have built a reputation and trust with our clients in Irvine, Mission Viejo, Laguna Hills, Laguna Woods, Lake Forest, Laguna Niguel, Rancho Santa Margarita, Coto de Caza and countless Orange County families and car fleets. For this reason, we have earned their repeat business and referrals of clients, friends and families. As a result, we reward our clients with incentives to say thank you for their continued support. So don’t drive around in a damaged car. Let Mission Viejo Auto Collision do what we do best and restore your car to its mint condition in no time. Contact us at (949) 951-7503 for your next auto body repair in Orange County.

Obama’s failure to act has been blamed on his inexperience, his unfamiliarity with finance and business, and a personal tendency to avoid conflict (or, to be blunt, on his being a coward). Some, including my colleague Charles Morris, also feel that the political system is now so gridlocked and dysfunctional that transformative policy changes are simply no longer feasible by anyone, so that Obama really couldn’t have done anything even if he had tried. If so, then we’re really screwed. But if anyone had a shot, it was Barack Obama in 2009, and he didn’t try. Admittedly, it would have taken real personal courage, and it would have been a hard fight—Wall Street would not have just rolled over. The logic and incentive structures of America’s political duopoly are such that in taking the path of least resistance, Obama was surely acting in his, and his party’s, rational self-interest. But whatever Obama’s personal motivations, America (and indeed the whole world) will pay dearly for his failure for a long time.

FOCUSING TOO MUCH ON THE NUMBERS In the second example, I managed the team to a set of numbers that did not fully capture what I wanted. I wanted a great product that customers would love with high quality and on time—in that order. Unfortunately, the metrics that I set did not capture those priorities. At a basic level, metrics are incentives. By measuring quality, features, and schedule and discussing them at every staff meeting, my people focused intensely on those metrics to the exclusion of other goals. The metrics did not describe the real goals and I distracted the team as a result. Interestingly, I see this same problem play out in many consumer Internet startups. I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product. It’s important to supplement a great product vision with a strong discipline around the metrics, but if you substitute metrics for product vision, you will not get what you want.

The larger truth that I failed to see turned out to be another of those paradoxes—like the discounters’ principle of the less you charge, the more you’ll earn. And here it is: the more you share profits with your associates—whether it’s in salaries or incentives or bonuses or stock discounts—the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit in this business lies, not in trying to drag strangers into your stores for one-time purchases based on splashy sales or expensive advertising. Satisfied, loyal, repeat customers are at the heart of Wal-Mart’s spectacular profit margins, and those customers are loyal to us because our associates treat them better than salespeople in other stores do. So, in the whole Wal-Mart scheme of things, the most important contact ever made is between the associate in the store and the customer. I

Interesting point is we discuss a lot about compensation and incentives of other people who are no way related and connected with you or business. On top of it we pass judgment. What type of behaviour is this?

Government-subsidized private sector job creation is one way forward. Recently, the federal government sponsored a promising short-term subsidized jobs program through something called the TANF Emergency Fund. States that chose to participate were allowed to use TANF dollars to provide employers (mostly in the private sector) with incentives to hire unemployed workers, targeting those on TANF or those who were in a spell of extended unemployment. Each state was given considerable leeway to design the program however it saw fit, often in close collaboration with employers. Across the District of Columbia and the thirty-nine states that took part in the program, employers created more than 260,000 jobs with an investment of only $1.3 billion dollars. Roughly two-thirds of participating employers said they created positions that would not have existed otherwise, and the businesses that took part expressed, on the whole, eagerness to participate in such a program in the future. Further, many participants remained employed after the subsidy ended, and those who had experienced significant trouble finding work especially made gains. Researchers who studied the program noted that it garnered “strong support from employers, workers, and state and local officials from across the political spectrum.” Creating a subsidized jobs program modeled on the TANF Emergency Fund would be one way to improve the circumstances of America’s $2-a-day poor.

With that focus on quality and discipline, NI has been profitable nearly every year, a record that Buffett claimed has left others in the dust. The key has been having incentives in place to get the right employee behavior. And for that, you must think the business through. Munger

Free women of color were permitted to inherit, own property, businesses, and slaves; it was not expected that they would marry. The comparative economic and sexual liberty experienced by these libre women provided them some incentive to steer clear of what free Maria Gentilly, who, after a husband squandered her estate, sued to recover it in the 1790s,17 called “the yoke of matrimony.

Frequently, Development will take responsibility for responding to changes in the market, deploying features and changes into production as quickly as possible. IT Operations will take responsibility for providing customers with IT service that is stable, reliable, and secure, making it difficult or even impossible for anyone to introduce production changes that could jeopardize production. Configured this way, Development and IT Operations have diametrically opposed goals and incentives.

PayPal’s big challenge was to get new customers. They tried advertising. It was too expensive. They tried BD [business development] deals with big banks. Bureaucratic hilarity ensued. … the PayPal team reached an important conclusion: BD didn’t work. They needed organic, viral growth. They needed to give people money. So that’s what they did. New customers got $10 for signing up, and existing ones got $10 for referrals. Growth went exponential, and PayPal wound up paying $20 for each new customer. It felt like things were working and not working at the same time; 7 to 10 percent daily growth and 100 million users was good. No revenues and an exponentially growing cost structure were not. Things felt a little unstable. PayPal needed buzz so it could raise more capital and continue on. (Ultimately, this worked out. That does not mean it’s the best way to run a company. Indeed, it probably isn’t.)2 Thiel’s account captures both the desperation of those early days and the almost random experimentation the company resorted to in an effort to get PayPal off the ground. But in the end, the strategy worked. PayPal dramatically increased its base of consumers by incentivizing new sign-ups. Most important, the PayPal team realized that getting users to sign up wasn’t enough; they needed them to try the payment service, recognize its value to them, and become regular users. In other words, user commitment was more important than user acquisition. So PayPal designed the incentives to tip new customers into the ranks of active users. Not only did the incentive payments make joining PayPal feel riskless and attractive, they also virtually guaranteed that new users would start participating in transactions—if only to spend the $10 they’d been gifted in their accounts. PayPal’s explosive growth triggered a number of positive feedback loops. Once users experienced the convenience of PayPal, they often insisted on paying by this method when shopping online, thereby encouraging sellers to sign up. New users spread the word further, recommending PayPal to their friends. Sellers, in turn, began displaying PayPal logos on their product pages to inform buyers that they were prepared to honor this method of online payment. The sight of those logos informed more buyers of PayPal’s existence and encouraged them to sign up. PayPal also introduced a referral fee for sellers, incentivizing them to bring in still more sellers and buyers. Through these feedback loops, the PayPal network went to work on its own behalf—it served the needs of users (buyers and sellers) while spurring its own growth.

for a platform business, user commitment and active usage, not sign-ups or acquisitions, are the true indicators of customer adoption. That’s why platforms must attract users by structuring incentives for participation—preferably incentives that are organically connected to the interactions made possible by the platform. Traditionally, the marketing function was divorced from the product. In network businesses, marketing needs to be baked into the platform.

Product immediately after exercise insurance solutions No investment insurance purchase in a very simple Prostatis action, even though he is trained only exception in the industry. There are many new threats that can lure the unwary with remote media policy is clearly insufficient for your needs. It is important to do your due diligence and scientific evidence, ask yourself just before the market does not provide a sound purchasing decisions. This short article will help you, just accept, shoulders that decisive action must begin with knowledge. Those most critical factors giving a positive self basically want to cover the first edition. That's pretty strong earnings, unemployment, and some cannot Prostatis even be informed. Talk to your employer and give generally positive, they are not. Relevance Tab justified confidence that the business aspects, really, that this, after all, attractive to employers incentives, long-term employees, and where the only specialized services for industry and again the other for employees of highest quality that are more difficult problem to treat, made only more secure, since it is to find a person. Although the direction of transmission of buying Prostatis insurance on their own, more attention is considerable, certainly in the sense that the plan to "complete" and "renewable insurance." This suggests that other, as you continue to receive payment of costs should not be fully covered by commercial insurance. Not even know that the level of demand in the economy Although in good condition I, and the company has taken the right path, and then joined a vague clause to complete the plan in principle and in its way through, you can also apply safeguards Generally they produce, the plan rescission period is 10 days during the working sets, make sure it's perfect, then throw the cards, if not immediately. The scenario is especially the Prostatis fact that it contains the option to change the terms and other demanding applications. Currently, for many years a large number of hits includes hands. As "absolutely certain legal requirements" specialized insurance services for investment in more selective inside to be taken, especially in the stop position of education on the basis of a different plan that incorporates the experience, regardless evaluation or situations require the exercise includes products and services for the same price evaluation face to face selling. Similarly, principles and manipulated so as the experience of many destructive aspect of the current market containing the entire industry. An insurance company to a higher potential, to ensure that purchasers or plans worth more to feel a little pressure, the result is inevitable that insurance is available against people who have contact to practice for a few days . Basically it is to maintain the power to print money to unrealistic levels.

Directors and management need to spearhead the strategy shift from transactions to relationships and create the culture, structure, and incentives necessary to execute the strategy. What

Work through the politics. Even political problems are soluble. Most people in business are rational, at least in their business conduct. They react to incentives. Therefore, when you face political opposition, it usually means that your solution has negative implications for someone in the organization. So politics is just people acting in their own interests. To work through the politics, you must think about how your solution affects the players in an organization. You must then build a consensus for change that takes account of the different incentives and organizational factors driving the politics.

Most neoclassical economists would argue that state-owned firms will inevitably be less efficient than private ones because the state lacks the proper incentives to run enterprises efficiently. The state does not have to fear bankruptcy, since it can keep businesses going out of tax dollars or, at worst, by printing money. It also has strong incentives to use the firm for political ends like job creation and patronage. These deficiencies of public ownership have been the underlying justification for the global move toward privatization over the past decade. But state-owned enterprises can be run more or less efficiently, and any final judgment as to the efficiency price paid for nationalization has to be measured against the entrepreneurial capabilities of that society’s private sector. In France, nationalized companies have often been allowed considerable managerial discretion and operate not much differently from their private sector counterparts.36

Are you creating a way for your middle tier customers to buy your products by giving them discounts and incentives? 

As Charlie Munger has said, “I think I’ve been in the top 5% of my age cohort almost my entire adult life in understanding the power of incentives, and yet I’ve always underestimated that power. Never a year passes but I get some surprise that pushes a little further my appreciation of incentive superpower.” An example from FedEx is one of his favorite cases in point. As he explains, the integrity of the FedEx system relies heavily on the ability to unload and then quickly reload packages at one central location within an allotted time. Years ago, the company was having a terrible problem getting its workers to get all the boxes off and then back on the planes in time. They tried numerous different things that didn’t work, until someone had the brilliant idea of paying the workers by the shift as opposed to by the hour. Poof, the problem was solved.2 FedEx’s old pay-by-the-hour system rewarded those who took longer to get the job done. They were incentivized to take longer. By switching to pay-by-the-shift, workers were motivated to work faster and without error so they could go home, yet still earn the wages of a full shift. For the workers, finishing early amounted to a higher effective hourly wage. By aligning the business’s interests with the worker’s incentives, FedEx got the outcome it and its workers both desired. The

I started reading. Was I hallucinating? Had I really once loved this book? And were these truly the views of groovy Berkeley, California, women in the 1970s? Interspersed between paeans to the glory of homemade bread and recipes for cashew gravy were meditations on the nature of women that struck me as so essentialist and retrograde that they might have come from a fundamentalist religious sect. “I would never go on record as saying ‘a woman’s place is in the home,’” wrote one of the authors. “But to my mind the most effective front for social change, the critical point where our efforts will count the most, is not in business or profession … but in the home and community, where the problems start.” In the home, kneading a big batch of cracked wheat bread, was where women—the “nurturant” sex—belonged: “No paycheck comes at the end of the month,” the authors wrote, “and no promotion: the incentive here is much less obvious, and much more worthy of you as a human being.

As a legal and economic instrument, the zone presides over a cocktail of enticements and legal exemptions that are sometimes mixed together with domestic civil laws, sometimes manipulated by business to create international law, and sometimes adopted by the nation in its entirety. Incentives vary in every location but might include: holidays from income or sales taxes, dedicated utilities like electricity or broadband, deregulation of labor laws, prohibition of labor unions and strikes, deregulation of environmental laws, streamlined customs and access to cheap imported or domestic labor, cheap land and foreign ownership of property, exemption from import/export duties, foreign language services, or relaxed licensing requirements.