Incentives – Behavior is Always Determined by the Structure of the Compensation Plan
In the Creative Process Workbook, we dissect the role of incentives on behavior. The following axiom will transform your life – behavior is always determined by the structure of the compensation plan. When you know how the incentives are aligned, people’s behavior becomes crystal clear. Why are individuals telling you what they are telling you? What is the purpose of the business and/or organization you are engaged with? Does the expert you hired have your best interests at heart or hers? These questions are critically important to the flow of accurate information.
There are many examples of misaligned incentives. The following are two enlightening illustrations. The FDA has a policy that a pharmaceutical company only needs to have two studies that prove the efficacy of a drug to be able to release it to the public. They fund and manage the research. If they do a dozen studies, and six show negative results, four show no efficacy, and two are positive, the drug will be approved. They then promote it as a wonder drug. Drug addiction and side effects have affected almost everyone directly or indirectly.
Multi-level marketing is another extreme example of misaligned incentives.
The real product they are selling is your dream-come-true lifestyle – the dream includes the time and the money to travel, give to charity, and to make millions helping others make millions. These empty promises are dependent on your recruiting friends and family into the same dream. It would be substantially accurate to say that no one makes money in these businesses except for a few unicorns at the top. The products must be substantially overpriced to pay the many levels of commission. People are therefore incentivized to overpay for an abundance of products they don’t need. This is a common story of broken dreams, marriages, and bank accounts. I have never personally seen a network marketing company that has a sustainable customer acquisition and retention model. These misaligned incentives and inherent instability always lead to calamity. These are usually not bad people they are just in a bad system – the structure of the compensation plans is misaligned.
Nefarious intentions aside, most “experts” have an extreme confirmation bias and may be getting their information from less than reliable sources. Your relationship with information is a personal journey filled with many landmines. Is there a way to navigate this minefield? Expansion Mindset could have some answers for you. At the very least, it asks the right questions. A concept called consciousness processing has never been more important than at this moment in human history.
The Fundamentals of Consciousness Processing
Adam Crane in his book, Mindfitness Training: Neurofeedback and the Process, first discussed the concept of consciousness processing. Our relationship with information is one of the most important and is potentially life-altering. The following offers some salient guidelines on the topic:
- Identify relevant sources of information. Relevance is determined by your personal mission/vision for life. There is very little time to waste on the multitude of mindless distractions offered by our informationally overloaded society. Decide what is important to you and what will move your life forward. Common interests shared by almost everyone are health, finances, and relationships. We must take personal responsibility for these areas in life. Unfortunately, in these three key areas, the information can be the most confusing and inaccurate.
- Identify reliable sources of information can be extremely difficult, as we eluded to above. Humanity Upgrade is committed to this endeavor above all else. We will vet information, bring together thought leaders and multiple points of view into one forum. Ultimately, you must decide. We encourage you to listen to all sides of the conversation with a constant filter for bias, both personal and researcher. The key metric in behavior is to determine the structure of the compensation plan. If the incentives are aligned and encourage the truth, this is typically your best path. This is no simple task. Many people believe what they want to believe, despite the facts. This type of demagoguery must be avoided at all costs.
- Assimilating information effectively and rapidly. Once you identify a reliable source, it is important to expose yourself to it in a way that works best for your learning strategy. One of the great advantages of modern technology is that there are multiple time-efficient methods to consume information. Audio, video, and print are easily and immediately available on any device. Time potentially wasted on long drives, walking the dogs or commuting, for instance, can be repurposed for learning.
- Identify when you need an expert. Dr. Hawking clearly illustrated that it is impossible to learn everything. You must know how to choose an expert and when to defer to him/her. The definition of an expert is transforming in the digital age. These days you can fact check a person giving a lecture in real-time. If an “expert” espouses a complete knowledge of his specialty, beware, this is highly unlikely. Humanity Upgrade will help you find the people and resources that are committed to consciousness processing; those sources that are free of conflicts of interest and faulty incentives.
Apologies. Are You Offended?
Know the truth and the truth will set you free! Make reality your best friend. These are difficult concepts that will no doubt offend many. Not only is information exploding in volume and accessibility, but it is also becoming less and less reliable. Don’t let these insights discourage you or cause you to fall into the distraction trap. Funny cat videos will not move your life forward. With this new knowledge, ask questions, determine the incentives, and take personal responsibility. Focus on the main aspects of your life; health, relationships, and finances.
Consciousness processing may be your most valuable tool in the age of information.
This is Part Two of a two-part series. Find Part One here.