Incentives
Daily Ramble
It’s been many a year since I wrote compensation plans for sales organizations, but the knowledge I gained through the process has had a lasting impact on the way I see the world. If you want to skip the rest of today’s Ramble, here’s the lesson: incentives matter — a lot.
For four years, I had the distinct pleasure of making people both delighted and miserable on an annual basis with an ever-changing sales compensation plan. Working in the residential and commercial solar electric installation business in the late 00s was an era of constant change. It was impossible to keep incentives the same year to year based on the needs of the fast-growing organization I jointly helmed with 3-4 others. It meant that every year I was tasked with rolling out a new compensation structure from the previous year with the twin task of making it a seamless transition and exciting the sales team into greater feats of prowess aligned with company goals. It worked so-so.
The most impressive part of compensation was how it utterly shifted behavior to align with the goals, seen or unseen. The seen goals being the aspects of the plan that I’d desired to encourage through the effort, while the unseen goals were the edge cases that the sales team found and exploited to their advantage. The organization was forever in frustration at these exploits. At the same time, I continually tried to point the blame at myself for missing the exploitable corner case I’d put into the comp plan. It fascinated me to watch how, as an organization, behaviors we hadn’t seen the previous year were suddenly spontaneously occurring. I got a taste of what central planners everywhere experience and get addicted to — the power to impact lives and the delusion that it could be done “correctly.”
But the real lesson to me was how, on the whole, most people follow their noses when it comes to incentives. They just do. It’s a rare human that nobly thumbs their nose at an incentive conflicting with their personal values. That’s neither a good nor a bad thing, just a reality. Most folks, myself including, will say, and believe themselves when saying it, that they would never shift their activities to benefit from a specific reward. In reality, most will. If you don’t think people are being vaccinated right now, at least partially because of Krispy Kreme’s free donut for a year campaign, you might want to refigure your thoughts on being human.
I’ve reflected on my experience with comp plans a lot over the years. I’ve learned to apply the lessons I learned in most interactions where I don’t understand people’s responses. I realized that if I can bird-dog out the hint of an incentive surrounding the response, it’s the most likely reason why someone is doing what they do. And that’s just plain human, even if utterly amoral and nonsensical.
Favorite Thing on the Interwebs Today
If you want to feel like an ant today, watch this.
Bitcoin Price Prediction
Weekend: $48k - $60k
Today: $55k - $62k
Tomorrow: $57k - $65k
The pivot I mentioned Friday did complete its anchoring process. It means that the most recent bottom around $50k is likely to hold as the bulls gather their strength to push Bitcoin to new heights. It may take a couple more days to play out and a retest of the $50k lows before happening, but the trend is back to bullish. I am anticipating for the majority of today, the price will be spent in consolidation above $55k and won’t have enough strength to break through $59k at least until tomorrow. Of course, any majorly bullish news could cause my prediction to fast forward…. I anticipate more bullish news soon with recent, large purchases of Bitcoin being pulled out of exchanges. It’s a good time to have some Bitcoin.
Bitcoin Q & A
Q: How does a Bitcoin miner create the next block in the Bitcoin blockchain?
A: By being the first to solve a mathematical puzzle.
Bitcoin miners are in a race against all other miners to be the first to generate the next block in the Bitcoin blockchain, earning them the block reward and the transaction fees. Each miner selects the set of transactions to include in the block they are mining and rapidly computes a mathematical solution to create the next block, also known as hashing. As soon as it’s solved, the miner broadcasts the new block to the network, where the rest of the network confirms it.
Thanks for reading,
Kent
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