181 - Creating The Right Incentive - John Laurito

181 – Creating The Right Incentive

In this episode, host John Laurito talks about the concept of incentive and how it affects decision-making. In business or their personal lives, people always consider whether the benefits outweigh the consequences of every action or decision they make. Remember that as a leader, it’s your role to create the right incentive for your team to influence them to do their best in their roles. Have a listen to understand why people do the things they do or don’t do the something they don’t want to do.

[0:00] Intro

[0:24] Why do we do the things that we do?

[0:41] The competing factors of pain and pleasure

[2:35] The concept of incentive and are you creating the right one for your team?

[4:14] Storytime!

[8:40] When there’s no incentive in business

[10:31] Today’s key takeaway

[12:14] Outro

John (Intro): I have been on a quest to learn everything I can about leadership obsessed with what makes the best leaders so good. After running companies small and large for the last 20 years, today I speak on stages all across the world to audiences who are interested in that same question. My name is John Laurito and I’m your host. I invite you to join me on this journey as we explore this topic: What makes the best leaders so good? Welcome to Tomorrow’s Leader

John: All right, welcome to today’s episode of Tomorrow’s Leader, where we dive deep on all things leader-related, related to leading yourself and leading others. I’m John Laurito, your host today and every day. So I wanted to talk today about the concept. We’re going to break this into a couple of different episodes because I want to talk about the concept of why you do the things you do. Why does anybody do the things that they do or not do the things that they don’t do but want to do? And a lot of it comes down to the basic competition, competing factors of pain and pleasure. 

John: There’s a certain amount of pain involved in doing something that will bring a certain level of pleasure or result, a positive result. Or maybe it’s the pain of not doing something versus the pleasure of doing it. Whatever the case may be, it’s a pain, pleasure relationship. And these competing forces that ultimately decide, OK, what we’re going to do. So when I think about, OK, I want to eat better and I see this great pizza, which is one of my favorite foods, and I’m like, oh God, I know that I really want to get in better shape and I really need to lose some weight in this. Pizza is definitely not going to help me, but it looks so good. 

John: So the pleasure of eating that pizza and tasting it, I can taste right now. I could smell it. The pepperoni, gooey cheese. Oh wow. The pleasure is just so high and the pain of not eating it would be so high. Oh my gosh. So there’s so much pleasure in eating it and so much pain and not eating it compared to the feeling of pain afterward. Well, that’s down the road. I’m going to feel that much of the pain of feeling like I’m not in good shape. It’s still fuzzy. It’s so far down the road. The pleasure is right now and the pain of not eating there is right now. So that’s what I’m thinking about. So everybody does. So think about it. 

John: You know you wake up in the morning to go to the gym, just the pain of getting out of bed is tough versus the pleasure. That’s two hours from now when you’re done, while the pain is right now very hard to overcome the pain right now for the pleasure down the road. It’s just very hard. But here’s another thing I want. I’m going to go into that topic and a lot more detail in another episode. But I want to talk about incentive, the concept of are you creating the right incentive for someone else to do something? We talk a lot about influence. And a leader’s job is to influence people, to do things that they would not do otherwise, to do things that they wouldn’t be able to do on their own, and ultimately achieve great things. 

John: That’s what a leader does, are they mobilize people into action. They create a certain level of collaboration and camaraderie and ultimately create cultures that do and organizations that do phenomenal things. But that’s leadership. It’s helping people do things that they wouldn’t normally have done. What does that come down to? Well, a lot of that is

what is the incentive for somebody to do something. So, you know, I’ll give you an example when and it doesn’t matter what it is. I mean, if I have you know, if I’m a kid and my parents are asking me to or telling me to do chores and I’ve got to do the dishes, well, my incentive to do that is probably going to be to avoid negative consequences. 

John: So if I don’t do it, I will get punished. Maybe I’ll get my phone taken away from me, I will get my allowance. Whatever the case is, that’s my incentive. My pleasure for doing it. I don’t have any pleasure. My pleasure. Is the avoidance of the pain OK, that that actually can work now, is that the way to ultimately get somebody to do something long term? Not the best way, because that’s just going to be a pain avoidance thing. But ultimately, do you have the right motivations and positive reinforcement tied to a specific task? 

John: You know, I can’t remember if I told the story or not, but I remember one of the funniest jobs I had in college was I was a security guard for this huge distribution warehouse for one of these was Delmonte or whatever I can Dupont, whatever. I don’t know. 

John: And they had all kinds of stuff in there. They had food. They had, you know, toothpaste. They had all this. I mean, it was like a grocery store and then some and it was a warehouse of all nonperishable stuff. And it was there and trucks would load up and take it to the places, the supermarkets, and whatnot. So my job and I used to work at all kinds of crazy hours, working two double shifts on Saturday and Sunday. So it was like 7 a.m. to 11:00 at night. And so many funny stories about this job. But one of the things I had to do is I had to go through. I figured it was maybe every two hours or hour and a half. I did walk through this long journey basically through this huge scary-ass warehouse, and this was like a picture of two airplane hangars of like 747, like enormous planes, like American Airline types of airplane hangars put together. It was that big. It was enormous. It was probably the largest building I’ve been in, aside from the Boston Convention Center. But it was huge, this big, vast open space with these huge aisles that went up like 30 feet. 

John: And it was dark. I mean, at night there were no lights in there and it was creepy. I’d have to go through. And there were some freezer areas I had to go into. I remember. And it was just this long path that you had to memorize and you had all these different key locations. So I had a key that I had to stick in this little slot. I had to turn it in. And that would document that I was going to that station and what time I went to and I had to go to like 15 different stations with every security check. Needless to say, it was like, you know, at night, especially at 10, 11 o’clock at night, it was on a Saturday. It was pretty scary. I mean, like it was dark. Nobody was in there except for whatever animals might have been in there and any kind of bad guys maybe. 

John: So my job was I had a flashlight and I had a walkie talkie and that was it. And I walk around and hopefully not run to anybody that had some ulterior motives. But I remember getting trained for it and they’re like, OK, so here’s we’re going to do blah, blah, blah. And I ask the question. I’m like, so what do I do? What if I were to see somebody that broke in and is in there like, what do I do? And they’re like, well, you know, you engage them and, you know, order them to leave and blah, blah, blah, and stop them from stealing and this and that. And I’m like, nope, not going to do that. And I’m like, where do you really expect this? There’s a guy in here potentially with a weapon. And here I am, a college kid. I got my whole life in front of me.

John: You’re paying me, whatever, seven bucks an hour and I with my walkie-talkie, what am I supposed to throw my walkie-talkie at them as I have? No, you are going to give me a gun. Do I have, like, a weapon? I mean, like legit. I mean, I’m. No, I’m not, I’m not going to do that. No, I’m not not not going to do it. Not going to do that now. Not gonna do that now at this juncture. Not gonna do that. That’s my Bush, George Bush senior impersonation. But no way am I going to do that. Are you kidding me? Like, why would I now know? So it’s funny. Like, why would somebody expect me to do that just because they said to do it? OK, I guess maybe. Yeah. My college kid, I want my job so. OK, yeah I’ll do that. But there’s no way. 

John: And when that happens then I’m going to do that. I’m out of there. Hey listen, man, you hear what you are trying to steal. Go for it. I’m just going to turn the other way. You do your stuff. I’m going to do my stuff. A couple more stations. I’ll be out of here in a few minutes and wish you luck. Well, honestly, like why I had no incentive to risk my life to protect a few containers of toothpaste. So anyway. But lots of stuff like that. I see businesses that are like that where they’re asking people to do things where there’s just no incentive. I was asking a business owner recently. I said, well, you want this person to do this, which is an important task and it’s something that they need to do pretty much every day. What are they doing that for? Is it extra compensation? Their career path is their promotion. Opportunity is a recognition, is a time off? I mean, was it just, you know, was there financial stuff long term? What is the incentive for them? 

John: And there really wasn’t much. And granted, you can get people to do that short term. Long-term, possibly because of the goodness of their heart. But if it’s too big of a task, they’re just not going to do it or they’re not going to do it well or they’ll just go through the motions as I would have. Yeah, OK. Right. Yeah, sure. No problem. But when push comes to shove, they’re not going to really execute well on the task. No way. Because the incentive is not there. There are all different kinds of ways you can put incentives. Now, I’m a big believer. I’ve always opted to pay the payor and send people more because turnover is really tough on a business and when you have great people, you have to keep them. 

John: So you’re better off in my mind over incenting people. So you keep those great people. But it’s not just that. It’s people who want to feel like they’re making an impact. Maybe what they’re doing will lead to a larger role in the organization. So there’s a promotion opportunity, a different career path. And if you do this well, then this will lead to other things. Hey, that’s it. Great, that’s a fantastic incentive, maybe it’s opportunities, different recognition, or it’s taking on new projects or heading up different stuff, whatever it is, if there’s something attached to it that’s significant, that’s where you’re going to get people really running hard and far for you and doing that and taking it and taking a lot of ownership in it, too. So my big thing today is just asking yourself, what is the incentive? 

John: Just if somebody is not doing something and executing something the way that you’re looking for them to do it, is it the incentive that’s not lined up or do they not? Maybe there is an incentive. They just don’t understand it. So that’s a better way to ask the question. Do they understand the incentive for doing that task? And is it OK enough for me with that security job? There was no incentive to do it other than just to please the boss. No, it was not. That’s not enough for me to risk my life. No way. You know, for your organization, is there enough? Do they understand the incentive? And is there enough or is it just fear of negative consequences?

John: Again, that can be short-lived and that’s not going to be a long-term solution for you. So there’s so much I want to talk about on this topic. I will keep it at that. And maybe we’ll do a part two on this sometime because the incentive to me is such an important topic of how you can influence people to do the right thing. So with that said, I’ll cut it off there. Eleven minutes in. I like to keep these short for your benefit because you’ve got big lives to lead and you got a lot of stuff to do. 

John: So I’m going to chunk your day here and there and leave you with some good thoughts and then you go do your thing. So for now, subscribe, share comments, all that kind of good stuff, and go down below five-star reviews. And don’t forget my book, Tomorrow’s Leader: How the Best Leaders Get Better in a Fast-Changing World is out. It’s out for immediate download on Amazon and you can preorder for hard copies that will be in about a month at your doorstep. So really cool stuff. Very excited about it. Check it out. Thanks, everybody. 

John (Closing): Thanks for joining us on today’s episode of Tomorrow’s Leader. For suggestions, or inquiries, about having me at your next event, or personal coaching, reach me at john@lauritogroup.com Once again, that’s john@lauritogroup.com. Thanks! Lead on!

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