Understanding incentives is one of the biggest levers in decision‑making. While people often communicate noble intentions, it is incentives that quietly shape behavior. When incentives are aligned, leaders move faster and decisions stick.
Pam learns the power of understanding incentives
Pam, a middle school teacher, wanted her school to participate in the Math Olympiad. The management resisted. They believed the Olympiad was unrealistic for students from at‑risk backgrounds with poor attendance. They worried it would drain already limited resources. Pam’s enthusiasm was acknowledged, but she was told to stay focused on teaching.
Pam realized she was hitting a wall. A mentor advised her: “Show how incentives align.” Pam reflected. She had been communicating her intentions, but not connecting to what mattered most to the management.
When she spoke individually with stakeholders, she discovered the school’s struggle to raise funds. The chairman’s reputation was tied to keeping the school afloat. Pam reframed her message: the Olympiad could attract patrons, showcase student potential, and build the school’s reputation. This shift aligned her plan with the management’s incentives. Support followed, and her initiative gained traction.
People are willing to align with positive intentions, but they hesitate when incentives clash or constraints dominate. Pam’s breakthrough came when she tuned her communication to match stakeholder incentives.
For your reflection
- what would enable you to adjust your message so it resonates with the incentives of those around you?
- As a leader, If you want a different outcome, how would you change the incentive structure?
“Incentives drive behavior. Create incentives that reward doing the right thing.” – Elon Musk