Posts Tagged ‘costs’

Looking Good and Cooperation

August 25, 2015

ants

Getting people to “pitch in” or engage can be a challenge.

Long ago, the “Pigouvian” approach to encouraging social cooperation was articulated by Arthur Pigou, a British economist. His idea was cooperation gets incented with  changes in price. For example, if we make water or energy more expensive or pay people to vaccinate their children. Costs are way to affect actions. Many times, though, people resist change even with higher prices. What we know now is that changing the material costs and benefits of cooperation appears to have limits.

What Promotes Cooperation?

Current research gives us some new ways to promote cooperation: they both build on social consciousness and the desire for a “good image.” They can be mutually reinforcing, too. One way is to raise visibility of people’s choices. An application of this? Donors are often cited in lists that recognize them at special events or in a public ad. Or, a pledge list is posted at a website.

Another option is to provide information about how others are behaving. This plays on a “keeping up with the Joneses” perspective. An example application? A California public utility sends homeowners comparable information about neighbors’ water use. People are eager to know if they are below, average or above. With no fondness, my husband recalls from his childhood a particular priest who published giving records of parishioner families. That example combines both visibility and comparability. Information can alter behavior, especially if toward a common goal.

Not all, but many people cooperate because they are concerned about appearances. Humans are social beings and deeply influenced by each other. People know that when they are observed doing good by others, then it benefits their reputation. This is why “true character” is best determined by what people do when unobserved.  And, it’s also why “herd behavior” can head in a constructive or destructive direction.

Leaders Offer Clear Right Actions

Norms (or the “right actions”) are a powerful influence and act as both an incentive and deterrent. Knowing why social interventions are effective can help guide policies and practices, regardless of sector. Setting defaults for noncooperation is becoming more common. For example, a suggested fee or donation pressures a participant to contribute or they must actively opt out (often, in a publicly observed setting). This same phenomenon occurs at church when the offering bowl is passed down the pew. Or, when a company automatically withholds a designated portion of salary for a benefit matching program and requires intentional action by non-participants. Because norms set clear guidance regarding standards for performance of individuals, disciplined attention to them is a vital lever in your organization (as well as home and community).

Influentials  First, Then Perceptions

Remember this as you seek highly engaged peers, team members, donors and volunteers. Making people feel more accountable supports cooperation. Being observed, making participation visible, and a clear display of “example” has substantial effect. What matters hugely are the “right actions” displayed by influentials. They shout what’s appropriate and what will get applause. It is the foundation for what matters to most people – the opinions of others.

Lisa Wyatt, Ed.D. is chief strategy officer and partner in Phillips Wyatt Knowlton, Inc. PWK is a performance management resource for systems and social change with clients worldwide. Lisa has cross-sector and international experience. She is an author and W.K. Kellogg Leadership Fellow. See: www.pwkinc.com

Smart(er) Measures

July 1, 2015

math

Which of these challenges is most important to solve: teen pregnancy, hunger, diabetes, or drunk driving?

Where should we focus time and money to improve lives and our communities?

Just as sports and commerce have been recast by data, the health field is leading the way for different mental models that help us calculate value in the social sector. In the US last year, more than 600,000 people died from heart disease while about 75,000 died from diabetes. Does that make heart disease eight times worse than diabetes?

We’re well aware death is inevitable. Still, many conditions aren’t terminal but very costly for individuals and society. In fact, the non-fatal conditions account for the vast majority of health costs. With this rationale, health economists have created new measures. One is a unit identified as “disability-adjusted life years” or DALYs. DALYs calculate the years of healthy life. A DALY is generated by identifying the years of life lost when a person dies (compared with a projected average without the condition). Then, the total years lived with a disability are tallied. A DALY is generated based on estimates of how nonfatal conditions detract from perfect health.

Using this new measurement unit, one can rank health problems. For example, in 2012, scientists reported 200,000 more deaths by lung cancer than traffic accidents worldwide. But, when calculated in DALYs, road injuries are far worse. Most lung cancer deaths are among older folks. Those who tend to die in car accidents with frequency are young – in their 20s and 30s. Importantly, road injuries cause about 40 times more disabilities when people survive them. Should we invest in anti-smoking or road safety campaigns?

Mexico has moved to this kind of analysis for treatments. Now, childhood cancer treatments and emergency care for car accidents are high priorities. Australia has also used DALYs to focus on childhood obesity and other issues. The application of DALYs in the US identifies low back pain, depression and anxiety as enormous health concerns. They generate substantial costs because of prevalence along with significant pain and suffering.

New statistics offer different and valuable viewpoints. They can threaten the status quo. Capable leaders use them to support change and progress. DALYs are a great example of how, with new measures, we can enable rational decisions. Isn’t that smarter? In fact, it can affect how we live and die.

Lisa Wyatt, Ed.D. is chief strategy officer and managing partner in Phillips Wyatt Knowlton, Inc. PWK is a performance management resource for systems and social change with clients worldwide. Lisa has cross-sector and international experience. She is an author and W.K. Kellogg Leadership Fellow. See: www.pwkinc.com

Buses, Green Jackets, and Costs

April 29, 2012

Rosa Parks

Through electronic trading, international markets move in nano-seconds. Because of cyber-space, an email sails across the globe in no more than few minutes – often faster. Speed adds value. But social change – inside organizations and communities – requires weeks, months, sometimes years. Often, a slow pace or simply  resistance by powerful interests generates a very high cost.

Too Slow & Public Relations

The relationship between time and cost is connected to change. Public relations is a “foil” that precludes real knowledge and distributes a pre-determined position or message to promote an advantage. It protects image. Experts generally agree when the expense to image or other factor becomes too great, change is likely to occur. Companies use cost to press for fast change. Timely payment on a mortgage, taxes or a credit card – avoids additional fees. Quick and preventive actions relative to your health gets rewarded through lower insurance premiums.

Whose Interest?

Nudge, the book by Thaler and Sunstein, focuses on “choice architecture” and the related behavior science research that guides how we can best gain attention or give a signal for change. In the private sector, getting “ahead” of change, discerning trends, and using them to market advantage is relevant to innovation and success. In any issue involving people, who incurs cost and how much before change happens are  key factors. Plenty of social and political capital is spent keeping the status quo.

A recent newscast about Rosa Parks prompted me to think about the importance of urgency.

History Speaks

In the context of tremendous and persistent inequality, one woman took action that defied powerful norms of an oppressive majority. In Montgomery City, Alabama the first 10 seats on buses were reserved for whites. When Rosa Parks chose her seat, she sat midway down the aisle.

With the bus nearly filled, a white man entered. He expected to be seated in the front area. Consistent with the prevailing law, the bus driver insisted that Parks and three other African Americans give up their seats for him to be proximal to the reserved whites only section. Quietly, Rosa Parks refused. She kept her seat and was arrested and convicted for breaking the “Jim Crow” laws.

At the time, a significant majority, of bus riders were African American. Eventually, the city-wide bus boycott of more than a full year generated extraordinary economic and social costs. Erosion of the racist separate but equal doctrine generated by the Plessy Case in 1896 was launched by the Supreme Court ‘s decision that found segregation unconstitutional in 1956. Sixty years for legal change – and many, many more decades after for social progress. Today, intended and unintended inequities still exist. 

The Green Jacket

Augusta is an all-male club and has been for 80 years. A few exclusive sponsorships are offered for the Masters golf tournament by the Augusta National Golf Club. IBM, a large and prominent corporation has been a consistent sponsor and the CEO is routinely offered a membership in the Club. Virginia Rometty is CEO of IBM. She is a golfer and die-hard fan. Rometty was denied an Augusta green jacket simply because she’s a woman. The Masters, is a famous golf tournament and  contemporary example of institutional sexism. People in power exclude others to retain their dominance. Jews were not invited for decades and blacks were excluded until 1990. For now, males want and seek control for an all-male club. 

Influentials Choose

When (and if) they choose, influential people can increase the speed of change and reduce costs – real dollars, social and opportunity costs. Leaders balance multiple interest in their choices. In the social sector, the aim is most often charity or justice for a vulnerable population. In the private sector, it is for responsible economic performance (and its benefits). Progress is greatly affected by leaders’ actions. Consider how your work might get further faster.

Whose needs are being served by the pace of change in your organization or community?

Lisa Wyatt, Ed. D. is a strategy architect and partner in Phillip Wyatt Knowlton, Inc. PWK is a performance management resource for systems change with clients worldwide. Lisa has cross-sector and international experience. She is an author and W.K. Kellogg Leadership Fellow. See : www.pwkinc.com


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