with the salesmen gave a large and perverse incentive to push the inferior

machine on customers, who deserved a better result.

 

And then there is the case of Mark Twain’s cat that, after a bad experience with

a hot stove, never again sat on a hot stove, or a cold stove either.

 

We should also heed the general lesson implicit in the injunction of Ben

Franklin in Poor Richard’s Almanack: “If you would persuade, appeal to interest

and not to reason.” This maxim is a wise guide to a great and simple precaution

in life: Never, ever, think about something else when you should be thinking

about the power of incentives. I once saw a very smart house counsel for a major

investment bank lose his job, with no moral fault, because he ignored the lesson

in this maxim of Franklin. This counsel failed to persuade his client because he

told him his moral duty, as correctly conceived by the counsel, without also

telling the client in vivid terms that he was very likely to be clobbered to

smithereens if he didn’t behave as his counsel recommended. As a result, both

client and counsel lost their careers.

 

We should also remember how a foolish and willful ignorance of the superpower of

rewards caused Soviet communists to get their final result as described by one

employee: “They pretend to pay us and we pretend to work.” Perhaps the most

important rule in management is “Get the incentives right.”

 

But there is some limit to a desirable emphasis on incentive superpower. One

case of excess emphasis happened at Harvard, where B. F. Skinner, a psychology