Incentive Literacy

People don’t do what’s right.
They do what’s rewarded.

I know that definitely sounds cynical, but facts are facts, and when we realize this, it also becomes….clarifying. Once we understand incentives, a lot of “confusing” behavior stops being so confusing after-all.

Office politics starts looking like survival math.
Business decisions start looking like scorekeeping.
Social dynamics start looking like people protecting a position.

Not always in a shady way either. I think reading that at first may give off a negative connotation but it’s far from it.  The logic is really quite simple: humans repeat what works.

Incentive literacy is the hidden skill that makes the world make sense.

Every environment has a scoreboard and people play with an eye to that scoreboard.  This doesn’t mean the scoreboard can’t be “dumb” or “make no sense.”  As long as it’s there, people will continue to play to it.

That shouldn’t be seen as a character flaw either.  That’s just a feature of the system we operate as humans.

If a company rewards “looking busy,” people get good at looking busy.
If a team rewards “whoever takes the big shots,” people start hunting big shots.
If a friend group rewards “whoever gets the most laughs,” people become performers.

We all adapt. We all learn what gets us points.

This only becomes dangerous when we begin to pretend the scoreboard isn’t there.  Then we’re surprised when people act exactly how the system trained them to act.

We’ve all seen the player who does the little things. They talk on defense, box out, make the extra pass, etc.  The moment the coach starts praising points more than impact, or doing the little things that lead to winning… things change.

Now that same player starts forcing shots.  Not because they suddenly became selfish, but because the reward structure just shifted.  If their efforts that don’t show up on the box score stops getting rewarded, they now have to do something else to get their reward.

If minutes are earned through scoring, players will prioritize scoring.
If highlight plays get the love, players will chase highlights.
If the team says “we value defense,” but the film session only celebrates buckets… the message is clear. (This is why knowing your role on the team is so important but that’s another story for another day).

Players don’t respond to what coaches say.
They respond to what coaches reward.

Sports often being the microcosm of life that it is, we can see that life presents the same challenges.

A lot of frustration can come from expecting people to behave based on morals while they’re operating based on incentives.

We think:

This isn’t an excuse for bad behavior. It’s a framework for understanding behavior.  When we don’t understand incentives, we personalize everything.

We assume it’s about us.
Half the time, it’s about their scoreboard.

Let’s talk about work/corporate settings for a second.

Two people on the same team. Same role. Same pay.
One gets promoted, the other doesn’t.

The person who doesn’t gets confused because they were "better at the job."  Then you zoom out and realize the promotion wasn’t for “doing the job.”  It was for protecting leadership’s priorities.

Maybe the promoted person:

In a lot of places, performance is only half the equation.  The other half is: who does your success serve?

That’s incentive literacy.

Not “be fake.”
Not “play politics.”
Just “know what game you’re in.”

You can’t win a game you refuse to learn.

Certain groups (not us OG Millennials of course) reward comfort.  They reward familiarity.  They reward whoever reinforces the existing identity.

So if you walk into a room telling the truth that disrupts the vibe, the room won’t clap.  It’ll correct you.  Not because they hate the truth, but because getting to the truth wasn’t the incentive.

Belonging was.

Incentive literacy isn’t about becoming manipulative. It’s about becoming strategic with our effort.

Here are the three questions we should ask in any environment:

Sometimes that means adjusting how we operate.
Sometimes it means switching teams.
Sometimes it means building our own arena.

In all those scenarios, it always starts with seeing the scoreboard clearly.

A lot of what we call “confusing” is just incentives working exactly as designed.

People don’t do what’s right. They do what’s rewarded.

So the move isn’t to get bitter.
The move is to get better and get literate.

Know the scoreboard.
Choose the game.
Then play on purpose.