From the US Government – Incentives Are Bad – No, They’re Good, No They’re…

Okay – didn't I read somewhere that incentives for the top dogs at AIG were a bad thing?  Didn't I hear Dan Pink say incentives are the bane of business innovation?  Didn't I see countless tweets and posts on how we need to do away with extrinsic reward programs, hold hands and sing Kumbaya to drive business performance?  

Yeah – you heard it too?  Hmmm….

So what do you think of this headline:  

The White House Looks Towards Incentivized Prizes as a Strategy for American Innovation

Yeah… thought so.  

The link above is for a post that then connects to the full post on the Office of Science & Technology Policy blog.

From the OSTP post:

In his Strategy for American Innovation, released in September, President Obama directed agencies to increase their use of incentive prizes as a tool for stimulating technological innovation. The White House is enthusiastic about prizes for a number of reasons:

• Prizes are the ultimate “pay for performance” approach – the government only pays if someone is successful.
• Prizes allow the government to establish an ambitious goal without specifying the best means to accomplish that goal.
• Prizes can catalyze private sector investment that is many times the value of the “purse.”
• Prizes attract new ideas and new entrants that would never respond to a traditional RFP.
• The competition itself can capture the public imagination – and change the public’s attitudes about what is possible.

You know me – I'm a big proponent of incentives and rewards – when structured and applied correctly.  But this flies in the face of recent "announcements" about awards.  Specifically:

• Incentives for innovation and collaboration decrease performance in those areas (see Dan Pink response here)
• Prizes as pay for performance – especially in large amounts create  undesirable behaviors in the pursuit of the goal

I've posted before on the X-Prize and how I see that being a great catalyst of change.  And in truth I pretty much agree with a lot of the points above.  

What I don't agree with is the situational application of these ideas – if it is applied to something the government wants it's good – if we apply it without their blessing it is bad.  

Can you have it both ways?  I guess so.  (BTW – not a big fan of the word "incentivize" either.)