The Sudden Rise of Social Conscience; OR; How incentives work

30 Mar

Incentive

– Yesterday, a neighbour came to me and asked – do you remember the name of the lady who was running a “clean up your neighborhood” drive? My daughter has to do some community service for her higher studies so we are actively looking for causes.

– Our community is involved in a lot of good causes in the surroundings – schools, pet shelters, adult vocational training, health, hygiene and life skills for the under privileged, scholarships for bright students — many many such causes. It has even given birth to a trust, which was created to manage the funds generated due to an annual run/ walkathon. A lot of middle and high school kids help out in many ways – some by tutoring the domestic helpers’ kids; some by teaching govt. school kids to dance and sing and thus prepare them for various functions like Independence day etc…The organisers, ALWAYS,at the end give away certificates of participation, and one mentioned to me that they may not have had so many kids participating if it wasn’t for the community service “credits” they notch up

band

– My daughter, who is part of a band, recently performed at a fund raiser – this was organised by a 10th std. girl – at a 5-star hotel. She did it because her “education counselling services” mentor advised her to organise a fund raiser to support some charity in the “health” arena. It was really well done – nice location, great performances by middle and high school kids, and the beneficiary kids, a DJ playing dance beats later. (But, as the founder of the beneficiary organisation observed, the “rich” kids, (including mine), didn’t really even talk to the kids of the beneficiary NGO!

– March marks the end of the financial year in India – most companies are scrambling to meet quotas – revenue/ profitability/ spend budgeted. Many companies are therefore desperately looking for projects to fund – specially with respect to the 2% of their profits on CSR that the new companies act has mandated.

In general, atleast in urban India nowadays, there is a much higher emphasis on CSR and community service, than there used to be when we were growing up. This rise of “share of voice” and mind towards Social causes, I suspect has been primarily led by powerful mandates – in the case of children seeking admissions in university, by the universities mandating comm-service credits; in the case of corporates abroad e.g. in the US, by higher weightage in deals etc to companies showing comm-service, and now in India , by the much talked about but little understood by now famous Companies Act of 2013.

Essentially, what it means, that a lot of things in life boil down to incentives – pets are trained using incentives, babies are raised using incentives, organisational goals are realised using incentives, and now, Social good is done using incentives!

In today’s world, where there is a great degree of buzz about Customer Centricity, and how the customer should really be at the centre of business (obvious no brainer, one wd say, but in actual fact it doesnt happen!), the reason why this generally agreed upon tenet is not really implemented is because there aren’t enough organisational incentives to change the whole culture around! We all know how Jeff Bezos keeps an empty seat representing the customer at his board meetings – and gives incentives for customer centricity. Just like Google and 3M made such names for themselves for innovation, basically because they have incentive structures designed accordingly!

We need incentives for every little thing – my games of tetris and farm heroes progress at the rapid pace that they do, basically because of incentives – dont need to be material, or public…just higher levels achieved is by itself an incentive! In this context, do read my previous post on goal setting and gamification which is basically incentives in a different form

Another previous post on carrot vs. stick, and the power of positive incentives vs. penalty is also an interesting thought.

Incentive design itself, however, is a complex phenomenon. In some cases, a NEGATIVE incentive works – (parents of teenagers will agree) – so, I only have to say “I dislike something”, for my daughter to LOVE it!

Having said all of this, to me, its great that incentives for social cause do exist, because without it, we wouldn’t see our born-with-silver-spoons-in-their-mouth children be as sensitive to environment around them and people who dont have the priveleges that they have.

Similarly, nearly $1.5 billion wouldn’t flow into the NGO world, if Sachin Pilot hadn’t created the clause. Interestingly, it wasn’t so much the money – as the uptick in visibility and consciousness that it promoted, that was the great impact!

Long live incentives for social cause!

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