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The DutyLife's show is all about providing and helping aspiring entrepreneurs,entrepreneurs,business owners,CEO,CFO,Marketing Managers,Policy Makers,Individuals- how to make decision under incomplete information , incomplete understanding and how to build system where mistake can occur without threaten the system and most importantly control recycle and use as fuel from improvement.
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Never Ask a Barber If You Need head Cut
3 days ago
“Never Ask a Barber If You Need head Cut” Warren Buffett Incentive super- response tendency .In the 19th To reduce and eradicate the infestation of rat in Hanoi Vietnam, the French colonial rulers passed a law: For every dead rat handed in to the authorities, the catcher would receive a reward. Obviously a lot of rats were destroyed but in the meantime many were bred specifically for this purpose. Yes in the 21th century, modern incentives are not better: Company boards promises to CEOs bonuses for achieved targets. Guess what happens? Company managers invest more energy in trying to lower the targets than growing the company. Put in another way the company is sitting on ticking time bomb (unless the CEO is founder, hence has something to lose) example These are example of incentive super- response tendency. This was coin for the first time by Charlie Munger the legendary business partner of Warren Buffett. Incentive super- response tendency. is the fact people response to the incentives by doing what is in their best interests. What is more striking here is the behaviour of people change immediately when any promise of incentives comes into play and secondly people respond to the incentives themselves and not to the real intention behind them. Real good incentive systems comprise both the intent and the reward. Just as cab driver both something to lose and to gain if he/she is good and a bad driver. Bad incentive systems overlook and sometimes even make worst the ultimate aim. For example censoring book, makes its contents more famous and most importantly rewarding Here are 4 big ideas to be taken away. If you want to influence the behaviour of people or organisations? You could always preach about values and visions, your ability to tell stories or you could appeal reason. But incentive work better.by its needs not to be necessary monetary (financially), anything is useable such as good grades to Nobel prizes or special treatment afterlife So for example if you are dealing with consultants, architects, accountants – meaning experts can b