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Cedric Chin
@ejames_c
This is actually a good example of a tweet thread that contains ideas that are all correct but are not actually useful. I can assure you, as an org designer, this is NOT how good org designers actually think about incentives.
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Sahil Bloom
@SahilBloom
Incentives are everything. Here’s a framework for establishing incentives (that actually create desired outcomes):
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Cedric Chin
@ejames_c
To establish some credibility: I built a debate club in high school, which imploded. I thought, "hmm, this seems like a useful skill to learn". I then built the NUS Hackers, which has persisted for 8 years now, and remains the best place to hire software engineers in Singapore.
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Cedric Chin
@ejames_c
And then I went to Vietnam, built out an engineering office there, and tweaked the departments adjacent to our office, and now, 3 years later, the org has retained 75% of the people I hired, and are still run using many of the same policies/incentives I designed.
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Cedric Chin
@ejames_c
To be fair to Bloom, perhaps the incentive design he talks about applies to deal-making. Or perhaps the ideas are meant in an atomised, theoretical way. But every idea in there is almost certainly going to trip you up in bad ways if you tried to apply them to your org.
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Cedric Chin
@ejames_c
The basic tools when it comes to org design looks like this: 1. You have an accurate model of the people you are dealing with. This is context dependent. Salespeople respond to incentives differently from engineers. 2. You have the ability to think in terms of systems.
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Cedric Chin
@ejames_c
3. Finally, you have an accurate understanding of how culture works. The shape of the expertise is like this: you design through a step-by-step unfolding. Over time, you design policies, shape culture, and nudge behaviour through meetings, one-on-ones, and actions.
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Cedric Chin
@ejames_c
The most important nuance is to recognise bad behaviours early and nip them in the bud by course-correcting. It is useless to talk about the cobra effect, or about Goodwin's law, or about skin in the game if you don't have these skills pinned down. In fact, it is not necessary.
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Cedric Chin
@ejames_c
Because you are able to model the behaviour of the humans you are dealing with, you understand the system you are modifying, and you understand how to mould culture, none of these issues will come up. These are just frameworks that sound intelligent but are not useful.
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Cedric Chin
@ejames_c
"Wait, but Cedric, Goodwin's law is a thing! Other intelligent people talk about it!" Yes, but the way you defeat Goodwin's law is not by talking about Goodwin's law. Bloom talks about Amazon in his tweet thread. Amazon actually deals with Goodwin's law quite well.
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