On Incentives as a Preferred Instrument of Corporate and Public Policy

On Incentives as a Preferred Instrument
of Corporate and Public Policy

by Win Wenger

Chapter 3 - Incentive Analysis as a Problem-Solving, Creative Solution-Finding Method

Chapter 4 - Where These and Other Problem-Solving Methods Come From

Chapter 5 - Incentive/Equilibrium Analysis

Chapter 6 - Adjusting Incentives as a Main Way to Get Desired Things Done, Preferred Over Conventional Administrative and Governmental Methods

Chapter 7 - Toward An Overall Cost-Benefit Analysis to Coordinate Actions, and to Reduce the Costs of Managing While Increasing the Benefits

Chapter 8 - Some Specific Ways to Use or Adjust Incentives

Appendix - Funding of Science Research

Notes

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Chapter 1
Introduction

Example from a list of hundreds of possible incentives for improving conditions without constraining or damaging individual freedom and/or initiative:

Create a 1% tax on all capital newly borrowed in pursuit of hostile takeovers.

Because of the close competition of other, more productive opportunity costs - i.e., uses of capital - this would meaningfully shift more resources into productive investment and use, and away from non-productive and even destructive "internecine warfare" among wolving management groups.
This proposed simple 1% tax would slow speculation, without preventing necessary transfer of productive resources from less efficient to more efficient uses.
This would be a gentle and yet most comprehensive reform of the savings and loan, banking, insurance and other financial institutions, rendered necessary by their trillion dollar error of loading up on junk bonds, as an alternative to the massive governmental controls and takeovers and rejiggering of power and financial arrangements and resources which have taken most of these institutions out of their traditional local-community-support, locally managed roles.
This simple, inexpensive measure would curb the most damaging phenomenon ever let loose in the American economy and society.
This simple tax, with no cost to the Treasury and indeed an immediate if marginal increment of improvement on the Federal deficit, would restore some needed stability to highly productive sectors of the economy, and allow continuity and corporate productive pride to become restored.
At no cost to either productive suppliers OR consumers, this simple step would free up an immense amount of American capital for productive investment, both here and in fledgling democracies whose window of opportunity may be closing for lack of capital support, capital which now is consumed in hostile takeovers or in defending against possible and actual hostile takeovers.

By far the hugest (ahem) transfer of resources and assets in American and/or world history has been accomplished in two stages.

Recessionary and then realty-depressing policies which collapsed market values at the most crucial time, converting a possible billion-dollar shortfall in savings-&-loan institutions into a trillion-dollar short-fall and buyout. (Much of that value, Gentle-but-I-hope-not-too-gentle Reader, went somewhere!) Obviously, the appropriate policy to follow while sorting through and buying out the mess of the collapsing S&Ls should have been an expansionary economic policy, to support values and minimize the costs to the Treasury and to the public, until the episode was complete. The opposite policies instead were pursued, expanding the losses to Treasury and public from a billion or so dollars three orders of magnitude upward toward a trillion dollars! This strange coincidence of the relevant policies is, indeed, remarkable.
The subsequent rules and power shifts which enabled the enforced transfer of wealth assets on an even larger scale, which is why your friendly neighborhood bank or S&L is now the outlet of some distant colossus.

Where are Woodward and Bernstein or other courageous investigators when we most truly need them? It might be a fascinating exercise to determine how many of the close associates of those now holding most of those transferred assets, were also the close associates of those who determined and carried out that remarkable confluence of coincidental economic policies.... —Or how deep and how far back some of these matters indeed run...

One has the distinct impression that the related and remaining financial industries had, indeed, a la golden goose, been taken past the brink by these policies and were nearing the point of a yet far more comprehensive general collapse, before "time was bought" for the American economy in the form of NAPA and GATT, which may give us even some temporary prosperity for a decade or so before the next remarkable transfer of wealth assets is gotten underway. (Editorial note: this was written a decade before 2001.)

Appetites tend toward infinity—and certainly at a greater pace than do resources—and if not appropriately limited or curbed can strip the land of all its further productive possibilities.

One objection to this initial argument is the often-raised objection that it is nearly impossible to pursue an expansionary economic policy without inflating prices. In response, one may question how expansionary an economic policy had to be to match the inflationary impact of running up the Federal deficit by a trillion dollars through the coincidence of restraint policies, realty decline and the S&L crisis. A better response, though—better because it allows us to move away from unproductively pointing fingers, and toward suggestions which could be very productive of improved value—is that there are indeed ways to expand the economy without inflation, to nurture a whole brood or flock of golden gooses if you will. For starters, read within this brief monograph to see how we can readily encourage a 6%, 8%, even 10% annual economic growth rate while simultaneously enjoying stable or even declining prices!

—And how we can also develop a qualitative economic growth rate....and inexpensively preserve and restore the natural environment, and other aspects of a fully human quality of life.

Hundreds of incentive-directed suggestions—-the one which opened these pages above, the several dozen below, and many others—-each individually appear to be good ideas and can be debated thus. However, each of these is also reflective of a larger set of common principles which at some point must be addressed. These common principles apply within firms, agencies, corporations, communities and even neighborhoods, as well as on state, national and even global levels. These principles suggest a way of managing resources which is less costly and more efficient than are conventional supervisory, managerial and governmental techniques. Further, these common principles point directly to ways to restore major corporate or public goals whose difficulty of achievement by other means had caused their pursuit to fade. These goals range from corporate growth goals to levels of public health, and bear on the dilemma of homelessness, the embarrassingly faltering American space program, standards of environmental quality, and development of oceanic resources, to name but a few such elements.

We Americans have failed as yet to come to any meaningful grips with key matters which severely threaten not only our livelihoods but our very survival. We've postponed even looking at these because the scope is so great, the apparent costs of remedy so high, and because the problem is so much bigger than we or I that necessarily someone wiser and more powerful or responsible will somehow come along to take care of it for us. That latter attitude is as un-American as it's possible to get!—and the cascade of crisis and decline in not only American world position but in absolute living standards, moreover, make it appear that truly no one is responsibly at the wheel, effectively in charge. No undisclosed possible power group behind the scenes is taking care of us and saving us from ourselves, any more than our uninformed democracy is.

—Yet many or most of these greater problem issues are easily and inexpensively solved! Examples you will see within are our nuclear wastes problem and the little-noticed but nearly fatal distortions in our scientific and medical research efforts. Other problem issues are more costly to address, but still are fairly readily solved, such as the fading ozone layer, the immense cleanups needed around some of our older nuclear facilities especially those which were part of the defense program, the approaching sudden-death of the lungs of Earth, our oceans.

True, each of these problems, if addressed the usual way, could consume more resources than the present Federal budget in toto, and literally mean an end to remaining individual freedoms though even that could be preferable to the results of leaving such problems alone until too late.

Yet addressed by the means suggested in the pages following, the cost of such matters can be readily reduced to far more easily managed proportions and the degree to which the indicated situations can be fully remedied can be uncompro-misingly high.

Beyond these specific concerns:

Once this set of principles and general approach is highlighted, the incentive approach we propose herein becomes apparent as a useful general method by means of which to address a much longer list of corporate and public problems and issues.

Perhaps as significant, this incentive approach generates in prospect not only useful but gentle solutions to these and other problems and issues, including those great issues and problems which have long been thought to be wholly unsolvable. Further,

The very fact that this approach is generating apparently plausible proposals for solution of various specific global problems which "everyone knows" are hopelessly unsolvable, should in itself justify a close look at the principles we present here, and at this general approach proposed to creatively solve a range of such problems.

In the regard that the means determines the ends (in contrast to the ill-fated theses that the end justifies the means)—applications, of this proposed system of principles and specific methods and solutions, may go a long way to restoring certain key American traditions and values once identified with Jefferson and Madison, and which actually trace back to the Benthamite context which underlies all western democracies. ("Democracy," however, we define as "people having a meaningful say in the decisions which affect them," which may or may not have much to do with the institutions of voting. A truly free marketplace, if one existed, would in this sense be far more democratic than are today's politics for national political office in America whose effectiveness as a "democracy" has, indeed, come substantially into question.)

To the extent that you can work with people pretty much as they are and still get done the things you need or want done, you can allow people their freedom. To the extent that you have to somehow change them or override aspects of their nature in order to get needed or desired things done, you have to reduce their freedom.

That was what destroyed that beautiful dream of international brotherhood called "communism." There was no way that system could get much of anything done without a great deal of either self-compromise or of overriding the human nature of those people unfortunate enough to come under its sway. The degree of its overriding of human nature and ignoring of matters of incentive and dysincentive, dictated formation of one of the worst totalitarianisms ever unleashed upon this planet. Mostly the people directly under its sway, still nurse the secret hope that communism itself can somehow still be revived and made to work "with a human face," that what went wrong before was a few people "betraying the revolution." If any of these countries does, indeed, succeed in reinstituting communism, it will necessarily again be "betrayed." The betrayal, though, is not in a few individuals who sought and grasped power, either for its own sake or to try to get some of those needed or desired things done. The betrayal is built into the dysincentive structure of the communist system itself, and no long-term positive outcome under that system is possible. The betrayal was real enough and terrible enough—but is necessarily inherent in the nature of the beast called communism.

Why America, for some considerable period of time, came to be substantially the world model for democracy and freedom, is due not especially to unique virtues on the part of our forefathers who were as human as we are (if somewhat better informed). We were a huge wilderness without effective authoritarian controls. If you didn't like the way things were being done someplace, you picked up and left and went somewhere more to your liking. The only way multi-person or social or collective desires could be accomplished was through working with people being comfortably pretty much as they were. If you tried to override or change them, they went somewhere else. —So we evolved ways of working with one another, ways of working through and with others, that were effective even though we left people otherwise pretty much as they were and didn't try to override them. That was the only way to get done the desired community or collective aims.

—Of course the successes resulting from use of those freedom-involved and democratic methods, brought growth which put an end to the conditions which made that freedom and democracy required. Of course we coasted awhile on the momentum of those traditions, and grew further, to the point where some would now argue that in our crowded and complicated world freedom and genuine small-level democracy are not only no longer required, but increasingly impossible.

We propose instead to show, in these pages, that any meaningful forward surge into modern world conditions, especially one that can be sustained forward, can not only be accomplished with meaningful freedom and democracy fully reinstituted but that, in the long run, such freedom and democracy are required to survive and prosper in the complex modern world.

—And that the only way this can be accomplished is to examine and adjust the incentives at work among us, and to turn from traditional coercive means TO incentive adjustment as the preferred means for getting done the various collective and social and general things which we want done.

That this is feasible, and very necessary, and urgent to do, is the thesis of this paper.

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Chapter 2
Interlude

Incentives work best at the margins of people's attention, rather than directly in the center. —When, almost unconsciously, it's easier and more rewarding to go one way rather than another.

When people, for their own reasons, find it in their own personal interests to do that which benefits the whole, they tend to do so for their own reasons.

—So Adam Smith taught us in Wealth of Nations. Smith also taught us a range of conditions under which private interests differ from those of the larger whole. That is where our freedoms disappear down a black hole. That is where, attempting to constrain private responses to conform to the benefits of the larger whole, we have made nearly all our terrible mistakes and are still doing so.

Where conditions cause conflict between private interests and the benefit of the whole, both lose.

Correspondingly: where the whole can truly bring into line with what benefits it, what freely benefits the interests of the private individual, both gain.

When you constrain by law or by administrative practices, all are required to conform and freedom disappears. Adjust incentives and no one is forced to conform, no one's freedom is lost—but the benefit of the whole gets realized.

The larger the community, numbers and variety of people are, among whom incentives are thus adjusted: the better are the chances that enough will respond to carry out the aim or benefit of the whole accordingly. —For their own reasons, on their own initiatives, economically and flexibly and adaptively and quickly.

The costs are all around us, today—the costs of the traditional methods of constraint. The costs of forcing private response to serve, or at least to not injure, the benefits of the larger whole.

Who is more the prisoner—the inmate, or he who has to guard that inmate? And: que custodiat custodias?

I wonder if any of this has anything to do with America being the only major or modern nation with more than a million of its own citizens behind bars—with another two million awaiting their turn? (Editorial note: as of 2001: two million Americans now behind bars with another three million needing to go there.) —At a time when it costs several times as much to keep someone behind bars as it does to send him to Harvard. —And certainly the costs of that less than 1% of 1% of 1% of the cost of opportunities foregone through our present arrangements.

Concentrate enough power to exert the traditional methods of authority, administration and constraint/ restraint by law, and you've created an extremely serious additional dysincentive regarding the benefit of the larger whole. More and more people start playing more and more ruthlessly to the stakes of that concentrated power and wealth....

...Diffuse that power by means of adjusting private incentives to serve even the same policies and corporate or public aims, and you reduce such stakes. —And with those stakes, you reduce much or most power-play behavior. Policies become more rational as the policy-setting conditions become more rational.

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Chapter 3
Incentive Analysis as a Problem-Solving, Creative Solution-Finding Method

Most or all major problems which involve or affect many people, and which persist despite effects at their solution, may be usefully analyzed in terms of the incentives which bear upon those who relate in some way to that particular problem.

A. Solution to many such major world, national, regional, agency, corporate or community problems, will be found in terms of modifying various of those incentives.

B. The same principles apply infrastructurally, within administrative apparatus as well as to employees generally and to the population at large.

C. For example, in terms of frequent contemporary experience, we elect a commissioner of roads because of his promises to take heroic steps to solve the city's awful traffic jams. His incentive - for job security and more pay and moral support - turns out, however, to be to be seen in heroic battle with the traffic problem. Incentives dictate that the last thing in the world he would really want to do would be to actually solve that traffic problem. If we were wise enough to change the incentives bearing upon his position, we would change thereby the traffic situation.

D. In years past we have proposed elsewhere[1] that one way to bring an end to the war in Northern Ireland would be to give a 5% tax break to firms and enterprises which are jointly owned by Irish Catholics and Protestants. Immediately upon enactment (especially if the incentive itself were enacted reasonably quietly and not made too much of an issue), powerful interests on each side would begin feeling out their counterparts to find ways of taking advantage of that tax break. A la Darwin, other firms would engineer the same to stay alive in competition with the enterprises which enjoy that tax break. Rapidly would build up on each side a substantial arrangement of people whose own prosperity rested upon the well-being of the other side. For "Ireland" also read the Punjab, Sri Lanka, the West Bank, most of the countries in Africa, hundreds of other such troubled areas.

—While that much was apparent at first look, in the Irish instance a closer look with Incentive Equilibrium Analysis (whose instructions step by step are provided a few pages further on), produced a major and shocking discovery. Despite professed and probably actual beliefs on behalf of both Protestant and Catholic Irish churches, and despite those churches being central to the several peace movements and initiatives launched there—those churches nonetheless draw their main importance and community support from the conflict. The churches have a considerable vested stake in the conflict continuing. We all wish the best for the current peace initiatives, which have to date gone much further than previous efforts. But (despite the complete non-response of the Irish Desk in the U.S. State Department to this point, among others so advised) if this stake is overlooked, this brightest-and-best peace effort is deeply imperilled.

There might well not be a single individual on either side deliberately prolonging the conflict for (conscious) church-related reasons. —But no solution may get by unless is added to it some measure as sweetener which sustains or extends the importance of the roles of each church in its respective community! Making the churches major channels for foreign aid for reconstruction and peace-time development, is the surest guarantor for any of many possible peace arrangements there.

Incentive/Equilibrium Analysis enables you to discover the potential or actual winners and losers relative to any situation, problem, proposal, policy or position. This method is also known as the "Win/Win-Finder" because, in this non-zero-sum game world where many or all can win together or lose together: such use of sweeteners to prevent anyone having to lose, such compilations of solutions which are "win/win" for all concerned, generally make solution-finding and policies in major social matters far easier and less costly than is the effort to override entrenched resistance. —Even when, as we will discuss, that resistance is unconscious and higher, conscious motives are genuine (and, believe it or not, they usually are!).

E. Most major social goals, we postulate, can be more readily and inexpensively advanced through appropriate incentives than by more direct and traditional administrative, governmental and compulsory means. For example, President John F. Kennedy inaugurated a long sustained period of record economic growth by adjusting tax incentives relating to investment. West Germany wrought its economic miracle in the 1950s largely by providing incentives to its businessmen to develop foreign trade. Here in America again, we continue to have great difficulty with pollution (something like the above problem with the commissioner of roads, perhaps?), but this brief hopes to make a persuasive case, a few pages hence, for the proposition that by setting appropriate incentives, we can actually clean up our own and surrounding environments quite rapidly for a fraction of the cost of what we're already spending now so ineffectually. (This may move from crucial to desperately urgent if either of Earth's main sources of breathable oxygen, the oceans or the tropical rain forests, continue to die and approach cascade point. —Those who are so impatient of government as to not want to consider incentives which might imply a continued and legitimizing role for government to play, please consider the world in which oxygen became scarce and the whole Earth, at best, became a "water kingdom" with our very breath, not just water, subject to centralized control of supply!)

To deepen this latter example of an incentive approach to problems, let this writer quote excerpts of a letter he wrote in 1988 to a good friend in Brazil, concerning the rainforests there:

"....Right now, any moves to try to address either Brazil's long-term interests there or the world common interest, appear dead in the water. At the same time, the public treasury there and pretty much the state of the economy however high that economy's potential, also seem to be dead in the water. I'm wondering if we might not put the two sets of problem together in a different way and let each problem help solve the other problem—
"Obviously, the Federal Government there (and/or the involved state governments), needs a positive incentive to begin protecting the rainforests, even though these are so essential to Brazil's own long-term interests entirely aside from the matter of these being a major part of the lungs of Planet Earth. The following double-action incentive could be the beginnings of the process—

"The Federal Government to set up a regulatory agency to supervise the development of the Amazon region. The agency would be funded by user fees, at a rate high enough to also meet some of the other needs of the Federal treasury as well.
"Since half the rainforest land is privately owned: any such land which is cleared or burned without that regulatory agency's supervision, the title of that land (and ownership of any of its resources and/or earnings) automatically reverts to the State!
"Hardship to private owners whose land was accidentally burned by someone else's actions, could be addressed by tort action against the burner, backed by a state insurance fee which was part of the user fee structure. Losing land title and resources to the State would automatically and correspondingly be part of the losses to be recovered by tort action and/or insurance. Thus,

"The State would have double-incentive—the direct input to its general public treasury (and building of some bureaucratic empire), and the receipt of some parcels of land in the developing area—to legislate and execute the necessary arrangements. This would not halt the slaughter of rainforests, but the very existence of a regulatory agency cum user fees would in itself slow that process. Also, such an agency would by its very nature be likely to begin at least partly rationalizing the development process and curtail the less rewarding, more damaging aspects of that process.

"Once Brazil was in a position of drawing some of its needed funds from putting brakes on that process, a very different psychological and political climate would exist ..... as Brazil's regulatory agency developed a civil staff with a stake in formulating a seemingly rational policy ..... would make feasible further additional measures not least of which, eventually, would be a tax credit or other positive incentive to developers to RE-forest some of the cleared areas which were less suitable for development. Some of the damage might actually get repaired before the climate, driven by the explosively positive feedback of tropical prevailing wind cells, collapses to Brazil's immediate detriment.....

"....have to look to incentives to sustain or execute desired or desirable public policies. The old methods don't work any more, if they ever really did. Species protection in Kenya, where the government there really does want to conserve [but poachers have destroyed most of the elephants and rhinos regardless], is a case in point. I predict that a large part of your President's present (1988) posture of outrage at outside interference is because he doesn't see any ready way to accommodate the world's common interest at this point, and thus is putting the best face possible on the situation by attacking the outside interference. Now that such a position is staked out, even if your government finally saw a way to accomplish a halt on the clearance, it would be a long time before it could rationalize its way around to doing so. —Whereas, the double-incentive measure proposed above is clearly in large part a means to relieve the beleaguered public treasury, and not at all a how-tow to those outside interferers...."

However, with the emergence of I/E Analysis it didn't take long to reveal the gaping flaw in this plan—the entrenched private interests, especially cattlemen and the political powers to which they are constituent. These have a stake, regardless, in the current reckless slash/burn practices - as do various industrial and power-plant factors. —But is there a "sweetener" to be added here, especially one that could be brought about from out here in the world outside Brazil? The answer is, yes—

Simple, Non-Governmental, Way to Save the Rainforests:

Reportedly, iguanas are more efficient at converting feed into high quality meat than are cattle. Even if they were only comparable in this regard, their meat is chicken-like and can - with recipe and cookbook prizes and a little media help from those here who have a genuine concern with the environment, as distinct from the drive for money, membership and power—be turned into a worldwide fad and major market export for Brazil.

Why should we wish to create such a market for Brazil? —Because iguanas require a forest habitat. The main slaughterers of Brazil's rainforest, the cattlemen, get several years grazing for their cattle out of freshly cleared land before the ground gets too hard and turns to desert. A boom in iguana meat would encourage ranchers to turn from cattle to iguanas as more profitable. Not only would this drastically slow the destruction of rainforests even apart from the above tax plan. Through sheer market force cattlemen might well find themselves leading the forefront of RE-forestation efforts!

This part of things we can easily accomplish from here in the United States—if the environmental groups are truly staked in better environment instead of in power seeking for its own sake in the name of a popular cause—or if some other source of support can be found, even an individual philanthropist, to underwrite such a campaign for popularizing consumption of iguana.

A concerted I/E Analysis might then go on to examine how a dramatic breakthrough in this regard could be made to advance the power interests of the environmental groups more than those interests would be damaged, a la commissioner of roads, by the alleviating of a major public concern.

As you can see from this example, I/E Analysis solutions tend to be untidy, slopping over in several directions—but look far more likely to get the job done and to get it done inexpensively. —In contrast the traditional-style attempts at solution which face the cost of having to override entrenched reflexive (and often unconscious) resistance. If I/E Analysis doesn't guarantee a win/win for absolutely everyone, at least it tends far more strongly in that direction than does any other method at the present time—and seems much more likely to see proposed solutions become actual solutions once this approach becomes more widely known.

This tendency toward the less-expensive, more workable if untidy win/win is a crucial difference for any executive, or constituency, or board of directors, or legislators. In the present example, we've been looking at proposals for saving the rainforests whose costs run well in excess of 100 billion dollars—cheap in comparison to the cost of their loss, but compare even that 100 billion to the cost of a million or so dollars in prizes for a lousy cookbook or so!!!

Potentially, this incentive approach represents enormous saving above and beyond present solution-finding approaches, above and beyond the further savings of actually getting solved some of the issues and difficulties which have dragged on for so very long.

Even in this initial summary overview, we've given some detailed attention to the issue of Brazilian rainforests not because that is a more deserving and urgent issue (maybe it is), but because this sequence of considerations illustrates the kinds of concern which I/E Analysis addresses better than any other technique presently does. Stockholders and taxpayers please take note!

Following a brief look at the origins of the method, next chapter, in subsequent chapters we will examine some further examples; spell out in detailed step-by-step form the method itself, and examine some of the guidelines and conditions for use of incentives generally. Beyond these details, though, and beyond I/E Analysis serving as an apparently uniquely useful approach and problem solving method for some of the most pressing problems of our times, let us keep sight of the fact that such use of incentives may also substitute for, and reduce the costs of involvement of, conventional government in the public sector and unproductive areas of management in the private sector. Let us remember:

The "first law" of cybernetics is, that a control instrument should consume a minimum of the resources of the system it is governing.

Perhaps we can also begin to devise, not so much a rule as an aesthetic value, that a proposed solution to problems, or other type of intervention, should consume a minimum of cost relative to the value of the intended value of that solution or intervention.

May we also realize or remember:

Not only are solutions possible to virtually every problem in the real world, however unsolvable they may at first appear to be—but usually many alternative solutions to each are feasible.

This last may be an improbable-seeming notion to the reader presently mired in seemingly irreconcilable disputes and stuck in the wider consequences of various seemingly unsolvable major problems. But let's check again on that once you've worked with a little of the resources of this present brief book. —And yet again, if you should happen also to acquire and work through this writer's main initial text on Socratic/Einsteinian combination technique for problem-solving, A Method For Personal Growth and Development.[2]

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Chapter 4
Where These and Other Problem-Solving Methods Come From

This writer first came into the field of creative problem solving in 1967, while he was still teaching college full-time. The creative literature at that time was almost entirely around two programs, the Osborn-Parnes system originating out of Buffalo, New York, and the Synectics system which arose in Cambridge.

The one contribution this writer can claim any credit for, took place at this time (1967), though most of the effects of that contribution began to be realized much later when yours truly went full-time into research. That contribution is utterly simple:

The Principle of Re-investment of Methods Into Creating Better Methods: one good use for any good method of solving problems is.....on the problem of how to create better methods of solving problems! One of the best uses for those better methods is on the problem of how to create even better such methods....
Continue this practice for awhile, of re-investing your best solution-finding methods into the problem of creating even better such methods, and after awhile one begins to find some interesting things. Each new method which has taught itself to us thereby, has brought in with it entire new contexts and ranges of understanding, so the process itself continues to accelerate.

—So that is one of the roots or sources of Incentive-Equilibrium Analysis, a/k/a the Win/Win-Finder. Here is another—

—Around 1962-3 when this writer, still an undergraduate student at University of Virginia after several changes of major, was taking his B.A. in Economics there: he became very interested in political economy and in particular, in the ways in which various features of government taxing policy modify the behavior of the public. It occurred to him then—and he barely finished his B.A. in Economics as a consequence—that if government traditionally was such an awkward and expensive method for carrying out various policies, and if slight differences in tax law induce the public into very substantial changes in behavior as it looks for ways to minimize the incidence of the taxes one pays: why not "eliminate the middleman?" Why not carefully arrange "loopholes" in the tax code such that the public at large will generally carry out the goals of government policy, without having to go through spending and authority of government bureaucracies which are so much clumsier and more costly?

From that time to the time, in 1983, he discovered Incentive/Equilibrium Analysis and introduced its group practice form in 1987, every time some major public issue came along—including the Irish Civil War and the Brazilian tropical rainforest of Chapter Three above—he would ask himself: (1) What changes need to take place in public behavior in order for this problem to resolve itself without government spending or law-inflicting? (2) What changes in taxes or other incentive adjustments would bring about those changes in public behavior— (3) —and at least cost in terms of other effects, or of undesired effects? Thus, this writer accumulated a great many draft solutions to a great many issues even before the emergence of I/E Analysis greatly sophisticated that tool and allowed it also to be adopted to private corporate situations, not only government, tax and public matters.

An even earlier, and to this writer even more significant, taproot of I/E Analysis goes back to 1949. It was then, thanks to an excellent public library in his hometown where schooling was less than ideal, that this writer became profoundly interested in the theory and dynamics of civilization.[3] All of this writer's work since that time has been motivated, at least in part, by desire to find ways to improve the odds that our own global civilization won't destroy itself the way so many others before it have.

Part of that general issue is that at least 24 of the 29 identified civilizations which preceded ours in agreed historical record, destroyed themselves catastrophically. Only one of the 29 (the Mycenian civilization, by the eruption of Thera in the Aegean Sea), was clearly done in by outside forces without it having not set in motion those forces itself. The processes identified as bearing causally upon those remarkably consistent instances of self-destruction bear dismaying close resemblance to much of what appears to go on around us today.

Many diverse theories are current, and some have credibility, as to why civilizations tend to commit suicide and as to the precise form in which our own global Euro-derived civilization may inflict upon itself our own extinction. Nearly all those theories appear to agree on our own civilization being in the throes of the penultimate crisis on this point, however. Some theories have been dented, while others including this writer's sociotectonics model[4] have been supported, by the sudden shocking collapse of Soviet Communism. Whatever the theory, however, there is one simple, indeed naive-seeming, description which appears to fit all cases:

—That in each of those self-destroyed societies, people at all levels let problems pile up faster than they solved them, until the whole became overburdened and came crashing down.

—At a similarly simple level, then, it follows—

—That if more people become better equipped to cope with and solve their own problems and the problems around them, and/or if problem-solving methods improve, this also improves the prospects for survival of our entire global civilization including survival of the stakes we all have in that civilization.

In this regard, whether some particular ideal solution to a global problem or issue is implemented, is less important than that more and more people become capable of acting effectively upon that problem or issue (and upon other problems or issues), improving the chances of some such solution(s) coming to be.

That defines the goals and "mission" of this writer and of his organizations, Project Renaissance and the Institute Of Visual Thinking. The above also describe some of the main roots by route of which have emerged, among a good many other advanced solution-finding systems, the system of Incentive/Equilibrium Analysis a/k/a the "Win/Win-Finder." Let us also note that that system, as seen next chapter in which we detail the steps of that method, is far more than only a way to solve problems or even to identify hidden support and opposition.

—And let us also note that though much of the above-cited context from which the Win/Win-Finder emerged revolves around problem-solving and efforts to mitigate or reduce threats to the survival of our civilization, what much of our work with these and other problem-solving methods has shown us is a positive creative side. —That the prospects for forward advance of our culture and civilization are many times more diverse and extensive and breathtaking than have the threats even when they were at their most pressingly urgent. That our present sluggish development of the economy and technology, our sagging position in the global economy, the quagmire of both our domestic and foreign policy bog-downs, and our accumulation of social ills, represent as much as anything a failure of our public and private imaginations and one which, in virtually an instant, could be swept aside in favor of by far the heartiest, healthiest, materially and spiritually wealthiest, most dynamically human era yet seen upon and around this spinning little blue marble.

Indeed, the degree of our present public failure provides us a unique opportunity because, in contrast, almost anything will work better and to put together solutions and new creative tracks which work well, which well we certainly can, will provide a positive "swing factor" of truly historic proportions.

But for now let's get down to the concrete, step-by-step ways how we can work such "miracles-by-contrast." First, let's realize the following:

Just as in biological complexly homeostatic organisms including human beings, 99.99999+% of the responses by which self-balancing societies and societal systems and arrangements maintain or equilibrate themselves, are reflexive and unconscious. These unconscious, reflexive responses of the social role are carried out by human beings occupying those social roles whose conscious motives are often very different from the unconscious in this regard.
Unless we are very alert ourselves, to such matters and perhaps even then, you and I reflexively embody and carry out responses from within the context of the conscious and unconscious role we are playing in whatever social units and arrangements. These responses almost always have the function to return the system to status quo ante even when our own interest and intent is very much otherwise. Guarantee: that on some instances you have done exactly thus, acting in some instances to your conscious intent for improvement or other change in the situation. A la Pogo: "We have met the enemy and he is us!"

—It's not just those bad people over there who are running the situation that we're trying to correct....

Next chapter, we lay out, step by step, the bases of Incentive/Equilibrium Method. Leading into that chapter we will lay out "Dynamic Format," an effective strategy and method for conducting groups through meetings, whose usefulness extends far beyond the group use of I/E Analysis. We also lead off with this group management technique, "Dynamic Format," because it is profoundly crucial to the best form of Incentive/Equilibrium Analysis. Another part of this next chapter will describe other uses of I/E Analysis. Subsequent chapters will describe other examples of use of incentives in addressing various issues; some general guidelines for determining and setting incentives to get the results you want from those incentives; and some of the general theory for the use of incentives as a preferred instrument in private corporate and public matters.

TOP

Chapter 5
Incentive/Equilibrium Analysis

First, we will examine a group management technique which is essential to effective use of Incentive/Equilibrium Analysis and valuable far beyond that as well. "Dynamic Format" is so crucial a tool for success both of this analysis system and of much else, that it stands in this chapter ahead of everything else.

Incentive/Equilibrium Analysis can be performed working alone and still be useful. This writer used it for a decade, in fact, before developing it into a group procedure. However, the group form of the procedure is so very profoundly more effective for use—and also entertaining—that we urge the Reader to learn it in this form first and to use it with your staff or other group as often as you can. —So we hereby devote several brief pages to the easiest, most focussed, most productive, most effective way of directing groups that you have ever seen! —Starting just several paragraphs below, under the heading, "Dynamic Format."

Second, we will examine Incentive/Equilibrium Analysis itself, the newest major creative solution-finding system to come into world use.

Third, we will squeeze in a partial example, a not-very-detailed look at the issue of a new, relatively clean, possibly economic power source through the eyes of I/E Analysis.

Fourth, the Incentive/Equilibrium Analysis system turns out to be far more than "merely" a uniquely effective solution-finding method for solving problems. We will examine here several of its various main uses.

1. Prologue: How to Run Better Meetings, Groups, Clubs and Classes

Have you ever had the experience of having something important to say but no opportunity to say it? How easy or hard is it for you to really hear and respond to what someone else is saying while you're sitting there seething with your own thwarted urgent contribution? —Same for your participants. Every time you've done your job as chair or moderator so well that your people have gotten interested and involved, you inflict that perception-inhibiting frustration on your brighter members and in direct proportion to the degree that each has something important to contribute!

—Same for your students! Every time you've done your job so well that your lecture starts to get interesting, you inflict that perception-inhibiting frustration on your brighter students and on your class generally!

In a corporation where time is money, how much time is wasted in board and staff meetings, either in lengthy discourse by the chair or CEO while expensive specialists and executives sit mute, or in pre-orchestrated speech presentations whose "discussion" outcome was determined long since, or in a chaos ended only when the chair or CEO goes out and either does things himself or by dictate, dismissing 99% of all that was said at the meeting? Or where everyone is saying only what the chair or CEO wanted to hear, providing no meaningful feedback or direction?

Here then, follow in summary a very few, very simple provisions through which you can build interest, sustain tight topical focus, while fostering dynamic expressive interaction which wonderfully integrates and develops your group's various perceptions and perceivers. You will find that you can maintain a stronger, better topical focus WITH these interactive group-managing techniques than you can sustain now in solo lecture! This is not loose soft-minded stuff about letting students or employees or members express themselves; this is highly efficient group, boardroom or classroom MANAGEMENT. Here, then, is a very easy, very real way to discover and focus your people's (your people's!) very real genius:

DYNAMIC FORMAT:

Dynamic Format fits comfortably with and can benefit most other group methods and procedures. It can turn miraculously productive all kinds of group meeting, from classroom (and even faculty meetings!!!!!) to board room to sales meeting to Town Hall and civic clubs.

Dynamic Format will enable you to easily get the members of your group actively, richly exploring, debating, investigating and relating to any topic or issue, yet staying far better focussed than can the most forceful lecture or most rigorous use of Robert's Rules. Dynamic Format helps your participants to participate without getting in each other's way or in your way. Dynamic Format is a set of very simple managing techniques to conduct the transaction of information and/or decision with maximum sensitivity and breadth of consideration and perception, quickly, crisply, in depth but efficiently. (Doesn't sound like meetings you've been in before, does it? We've all heard the old joke about an hippopotamus being an animal designed by committee, meaning that group outcomes normally are a joke or come out close to being the lowest common denominator. Getting genius from such a group?!? Unthinkable! —But within a page or so you'll be seeing how to do so....

The simple "house rules" of Dynamic Format enable your people to be interactive, thoughtful, perceptive, expressive, comprehensive, and yet to maintain a tight, clear, progressing focus on your topic. Dynamic Format allows a group to move deftly, crisply and quickly, without heavy-handed directing and without having to wander through mishmash.

Here is how to bring about these and other desirable effects from a group meeting—

FIRST,

Have any group of more than 5-6 participants to subdivide at the start of your session, so each is already in place with his or her partner(s) on a stand-by basis so you can move swiftly and smoothly and deftly in and out of the interactive mode when you come to the point in your session where you want to use it. Have your people stay oriented with their partner(s) even while functioning in your larger (plenary) group. This way, when you want to switch modes, no logistics are required and you are free to move crisply between levels of interaction as well as from step to step, or into interaction and crisply back to formal lecture or other formal process.

Your teams can be pairs, or threes, or you can have "buzz groups" consisting of as many as 5-6 participants, depending upon what you want to do with them. Each participant in a pair has more "air time" in which to examine and describe what s/he is perceiving in the context of the defined topic or question. The larger the group, the more chance that someone in it will catch on to what you want and model how it is done. The more difficult your question or task, therefore, the larger you want your groups up to a maximum of six to ensure that someone there in each group will be able to comprehend and get things moving as you want. Most of the time, to get the maximum of Socratic benefit[5] you will want to work your participants within pairs. You can even have your participants, as this writer has often done with his participants in his workshops and teachings, orient in pairs within larger sub-groups of 4 to 6 members.

SECOND:

From the very start of such a session, set up at least some of the following "Core Agreements" or "house rules for this session," to make it easy for you to swiftly and gently guide and focus or refocus your people into, through, and out of highly involved, highly interactive "buzz-sessions:"

Waterglass Rules—the waterglass, ashtray or chime which can be heard easily when everyone is talking at the same time—so your voice won't have to compete with all the other voices—
- THREE 'bings' = Instant Pause In Talking. Rule: the moment you hear 3 'bings,' pause in talking not only in mid-sentence but in mid-word so that you and others can hear the next topical question or step of instruction.
- One 'bing' = half-minute's notice, before the 3-binger. Rule: keep on doing what you are presently doing but be ready a half minute after this one 'bing' to pause in talking to hear the next instruction.
Hand-Up = Instant Talk-Pause + Hand Up, this simple device often used by the Scouts. This is best for very large groups, of one hundred or more members. Rule: the instant you notice either the leader's hand go up or other people's hands going up, pause instantly in your talking and get your own hand up!) (On-off flicks of the room lighting can serve the same purpose.)
RELEVANCY CHALLENGE—make a triangle of your thumbs and forefingers, sight at the speaker through that triangle. Rule: on that instant, whoever is speaking must (1) demonstrate how his/her remarks relate to the topic; or (2) return to the topic; or (3) yield the floor. Instantly. (How many times have you been reluctant to shut off someone's story but had to stand there bleeding internally while s/he got further and further off the subject and broke the context?!?)

You can see how, with just a little simple pre-arrangement, major group dynamics can be set in motion or stopped, directed, focused, how you can orchestrate them to maximum effect in terms of learning or of meeting-goal. Simple arrangement of easily used hand signals as standing rules or agreements allows you to orchestrate a wide range of group behaviors virtually without effort or delay. On the same principle, from time to time you may want to set up these special-occasion rules for particular situations—

Support-First Rule, used to obtain creative production, fresh ideas and perceptions, innovations, and answers to questions or issues whose outcome is not narrowly predetermined. To get more and better ideas contributed, the first response to the contributing of an idea should be a positive reinforcement. However off-the-wall an idea or input may seem at first, the first response to it must be some form of meaningful, content-related support! After that meaningful first support, then it's o.k. to carve that weird notion into corned beef hash, so long as the support came first. Every major system of creative problem solving has some form of this rule; to use it effectively, simply put it in this form:
- Any time you observe an idea not getting supported first, whether yours or someone else's, clasp your hands together over your head for a second or so while looking wistfully upward, then go on.
- Note: the best ideas usually are those which were greeted first with a burst of laughter. You may wish to give those laugh-burst ideas special attention. In any case, make sure that the first response to whatever input positively reinforces that act of creating and contributing ideas and fresh perceptions. Win your way past the usual reflexive self-censorings which stifle creative thought and perceptiveness.
- Don't use this support-first rule where you don't want richly expansive creativity, multiple considerations, and enthusi-astic participant expression.
3-sentence limit (or 4, or 2, or simply a 1-minute limit per input, depending upon the size of group and the nature of the process you are working. Once this rule is invoked, any time you notice someone going beyond the set limit, simply lean forward with hands clasped in front of you.
Make Record of the Run-Pasts! This corrects the main frustration about any group discussion or process which gets interesting enough to provoke a lot of desire to participate. Rule: Anything you notice that seems worthy of mention, but which the group process (or lecturer!) has stampeded past: make a written note or record of it, immediately! So reinforce YOUR OWN perceiving of overlooked aspects, not merely just that particular point! (—And clear the traffic jam in your perceptions between what you have to say and giving more attention to what others are saying now!—and if others also follow this Record Run-Pasts Rule, your inputs when you do get to make them will receive attention. Sometimes there is a chance before the end to pick some of these points back up and consider them—but the main purpose of this rule is to reinforce your own perceptiveness and integrity of view. Any time you notice someone else seething with an overrun point, point to his or her notepad and waggle pen or pencil at it.

An Aside: A Lecture to Teachers—

The lecture method was invented for the situation, back in the Dark Ages before printing, when only one copy of some book would be at the university, and the most qualified person would both read from it to the class and lecture based upon it, for the benefit of all the students who otherwise had no access to that book and its contents. A few of the relevant circumstances have changed since then! Some churches and most schools have continued the practice, though—all most classrooms need to become a religious service is a hymn or so!

Even if you are wedded to the lecture method and have never "buzzed a group" in your life, you can experiment just a little. Identify the key point you've just been trying to make in your lecture, and instruct your students to "turn to your partner(s) (or "the person next to you" if you've not pre-set the class) and, between you, let's see which pair of you can come up with the best statement of this issue." (Or turn your main point into a question and ask that question.)

Get them started. (By look or persuasion, make sure all are participating.)

Allow 3-4 minutes.

'Bing' and state the half-minute's notice.

Sound your waterglass, cup or ashtray three gentle 'bings' to end the "buzz."

Sound out (and give positive reinforcement to) each of a few pairs' wording of the issue (or answer), reinforce from there the point you were making, and move on.

Now, that wasn't too hard, was it? —And easier to do next time. Courage, there: for lo, you soon can be effortlessly moving your students in and out of interactive process, and through different levels of process, with amazingly well-focused discussions, like a master conductor directs his well-trained orchestra! Yes, you!

If you are shy about it, test out these rules one step at a time until you feel them working for you and you see and are pleased with the results - especially pleased with what you see happening with your students, as you manage your classroom into ever more excellent topical focus and intensity.

Consider: of what value even the most eloquent lecture, if little is learned from it? What matters in the classroom is what is learned, not what is taught. Dynamic Format lets you have it both ways.

Beyond the classroom: The Board Room, the Clubhouse, City Hall:

—Note that Robert's Rules of Order were designed to shut down communications within a group so that business can be transacted. The too-typical result leads to the joke about the hippopotamus being an animal designed by a committee. Dynamic Format, instead, elicits focused communications in a way which causes the business transacted to reflect the highest considerations and actual genius of the group!

—Yes, your group! Once you learn how to tap, focus and direct its very real resources, you have some extraordinarily pleasant surprises coming to you.

Board meetings, annual business meetings of societies, faculty or staff meetings, planning groups, task forces, town meetings, etc., are just as appropriate for this set of focusing strategies. This form of participant involvement, fostering expression from each participant's own perceptions while sustaining a tight topical focus, yields results far superior to those of the methods historically or currently in general use. Any corporation, society, committee, task force or staff can immediately, easily and sharply improve its performance and product.

Beyond Clearing the Mental Traffic Jam:

Focused "buzz-grouping" a la Dynamic Format, enabling everyone to get in his say and go on, as previously noted clears a mental traffic jam so that deliberations can move forward and each participant be fully and productively engaged. Instead of sitting there seething with things to say and mentally rehearsing what he's going to say until he can grab the floor, each participant fully expresses himself and is freed to listen, as well as to move forward in his thoughts and perceptions. Beyond that effect—

Socrates was among the first to discover that to describe a perception develops that perception further. The original schools, in classical Greece, were set up not for the benefit of students, but to provide quality audiences for the leading thinkers and perceivers to describe their perceptions to. Socratic method is a set of techniques for getting participants to examine their inner and/or outer perceptions and to describe in detail what they discover there.

The resulting peak learning experiences and "Socratic miracle leaps" phenomena which frequently occur with this kind of process, no less than the insights come up with on the couch of a good psychologist, are now easily understood in terms of modern psychology's most widely accepted or "first law: You get more of what you reinforce." Each time you describe one of your own perceptions, you—

Reinforce that particular perception, discovering more and more about it, sometimes until it seems that you're perceiving the whole universe at once.
You reinforce the behavior of being perceptive!

This is why groups conducted extensively through Dynamic Format, where each participant not only "gets his say" without slowing one-another down, but describes enough from his own perceptions to expand those perceptions, deepen his insight, and also is freed to listen further, not only perform so much better but increasingly better than do groups conducted through conventional meeting methods.

The Japanese had to teach us the American-discovered technique of product quality control. Can we teach ourselves this form of meeting quality control, which may well prove to be of far greater significance to us all? You have the above simple instructions in hand, and enough information about them to devise your own "Dynamic Format" rules should you need different ones. The rest is up to you.

2. The Procedure: Incentive/Equilibrium Analysis—
a/k/a "The Win/Win-Finder"
How Also to Discover Your Sources of Support and Opposition

I/E Analysis is the most recent major creative problem-solving system to find its way into world use. It was first introduced into public use in 1987 by this writer, at the annual Creative Problem-Solving Institute in Buffalo, New York, where some form of it has been practiced each year since. I/E Analysis has turned out to be far more than only a very good system for solving problems, and we will explore some of its other uses after the instructions below. First, we present it as a group creative solution-finding procedure.

As a group procedure, I/E Analysis works by far the best when conducted under the provisions of "Dynamic Format," as in the preceding pages above.

The first 7 steps of I/E Analysis require, the first time tried, between 1 and 3 hours, and subsequently can be performed in about half to three quarters of an hour. The duration of Step # 8 is a function of other variables, these mostly being the prior experience of participants, and can run between a few minutes and several hours.

The Basis of Incentive/Equilibrium Analysis:

Problems which last awhile, despite varied good efforts to solve them - especially problems in the firm or in society involving large numbers of people - are usually situations in equilibrium. By definition, this means that these are in self-defending homeostasis or sociostasis. Self-balancing, they reflexively maintain themselves, often in complex or sophisticated ways.
Identify and intercept the reflexive negative feedbacks by means of which a homeostatic situation or system maintains its equilibrium, and you can change that system almost without effort, with low cost in energy or money. To override that reflexive feedback is what drives up costs and makes solving that problem situation expensive, difficult or impossible.
Problems which are major, especially problems which involve many people, subsist from the behaviors—usually reflexive, usually undertaken for wholly different conscious motives than are the unconscious motives which are controlling—the behaviors of many people in that self-equilibriating situation.
Defining those equilibria, or goals of self-sustaining balance—and also very useful to analyze—are the incentives acting upon the margins of decision of anyone who relates to that problem, either in that problem or "in the wings."
Needing special recognition: the tendency of most complexly sociostatic situations to retain and restore equilibrium by unconscious reflex, regardless of the conscious motives of those involved. —Just as the homeostatic physical human body maintains its million-and-one complex balances by unconscious reflex, leaving the person's conscious mind free to address other issues than those of maintaining proper fluid levels, pumping just the right amount of noradrenaline, etc. This is a structural, mathematical identity of behaviors, between organisms and social arrangements. This is not the organic "fallacy of composition" of which Oswald Spenglar[6] was accused. It is the behavior of certain types of structure, whether found in organisms or in society, with which we are concerned here.

Acerbation Factor:

Others looking on, or those adversely affected by the continuance or chronic return of the problem situation, assume that the controlling motives which direct people in those system-reflexive behaviors are conscious. They make severely negative judgements about the (presumedly) conscious motives of those who keep the problem going. These judgments are almost always highly insulting as well as inaccurate, and engender the hostilities so frequently featured in major problem equilibria.

We too often fail to note or remember the very great difference between the roles people are playing—which relate to those social structural problem equilibria—and the human beings who happen to be playing these roles. We stereotype these roles and throw them back in each other's faces, instead of seeking out our common ground as human beings, making it almost impossible to step aside from those roles even if it should occur to us to do so.

I/E Analysis lets us look directly at these role reflexive behaviors, without the need to impugn anyone's conscious motives, to judge these systematic/mechanical factors as distinct from, and potentially very different from, the human dimensions of the same problem domain.

Without assuming like Marx did as to the conscious motives of various interests and groups in a given situation (and without a reductio as absurdum around some rigid economic theory!), it is useful to address those unconscious reflexive responses which are held in relation to identified factional interests, within the particular problem context. In doing so, Incentive/Equilibrium Analysis also leads us toward finding bases of solution which do not sacrifice anyone's interests, conscious or unconscious.

Another Acerbation Factor: Idealists PLEASE TAKE NOTE!!!

Wouldn't the world be so much better if good people everywhere stepped back from these system-reflex roles and "did the right thing?" Even if they could become aware enough to do so, or were good-hearted and generous enough that you could persuade them to sacrifice their own interests in doing what you want them to even for high-minded idealistic reasons....here is the difficulty.

Where large numbers of people are involved, and especially in hierarchical and complex situations, there tends to develop a very great difference between what benefits the common good and what will benefit one's own narrowly selfish interests.

Where such a difference exists, necessarily: persons motivated by self-interest will advance—and at the expense of people who are motivated by what would benefit the whole.

To the extent such a difference is allowed to exist (or where you are very persuasive), such situations necessarily punish humanitarian and "higher" motivations. You can reduce to some extent that difference and that punishment, but you cannot entirely eliminate it—if what benefitted selfish interest entirely benefitted also the common good, the "selfish" would resemble the humanitarian and could not thereby be sorted out in favor of the humanitarian; in all other cases the situation sorts out the humanitarian in favor of the selfish[7]. If you are very persuasive to the point where people on the other side of an issue from you go against their own interests, you soon run out of friends and potential friends.

To reduce such punishment—and to reduce the attrition of the higher-minded—reduce the difference between what benefits the individual and what benefits the whole. One way to achieve this is to address problem equilibria with the "Win/Win-Finder" aspect of I/E Analysis as below. Reduce the sacrifice of those who are motivated by or responsive to higher concerns. This frees them - and more people generally - to act on their higher and conscious motivations, and reduce the power and role of system-reflex, unconscious, inadmissible motivations. People become better people and more of the better people survive. Widespread use of the "Win/Win-Finder" thus tends us toward a less bruising and more rational, sensible world.

Detailed Step-By-Step Instructions for Performing
Incentive/Equilibrium Analysis:

You need—

A group of 2 or more people besides yourself. Hundreds can "play," subdivided into groups of from 4 to 6 persons each.
Plenty of "Post-It" pads, and pens or markers and notepads enough to go around.
A large sheet of paper (11x17 or larger) on a table, or an equivalent space on a chalkboard or markerboard, per sub-group "playing."
(Optional:) A Polaroid camera and film, or a video camera, with which to easily record particular configurations en route to your most optimal solution.

If this is mostly people new to the procedure, so that the process is likely to require several hours, you might want refreshments also on hand in service of a break.

Setting Up the Problem: select or state the problem. In a small boxed-in space on the center of the allotted large piece of paper or board space, write the statement of the problem. Up to the middle of either side of that boxed-in problem space, draw a horizontal line through the allotted space or large sheet. Evenly spaced, draw 2 more lines across which mark off three horizontal spaces above the middle of that box, and 2 more such lines across the allotted space or large sheet which mark off three horizontal spaces below the level of that problem box. (Map is modeled below.)

Win-Win diagram

Step One — Viewed from DISequilibrium: To bring equilibriating forces into view, imagine the problem to have been extremely disequilibriated by having been "solved." Imagine and describe in detail to your paired partner within your larger group or sub-group, what it would be like if the problem were not only solved but solved to an exaggerated degree, and notice everything that comes to vision or to mind in that context[8]. Brainstorm as many as possible of all the things you can think of which would be different if the problem were solved in such an exaggerated or extreme way. Use "Support First" rule from Dynamic Format; don't stop to argue or judge, just include whatever entries come up. Find 40-50-100 possible differences resulting from the problem having been solved so utterly.

This exaggeration makes apparent some elements of the problem situation which would not have been so noticeable in static views of it even when participants are well informed. Exaggerate the solution—the client is not only promoted in his firm but jumped 3 levels higher; not only is involuntary world hunger ended but everyone is so totally nourished as to be even getting dangerously fat. Imagine sales to increase not only by the target percentage but shoot right up off the chart. Imagine what if all the illicit drugs in this country are seized successfully in one fell swoop. Whatever the problem, expanding thus the view of it being solved expands our perceptual map of the situation, and gives us room to peer between its elements.
(5-10 minutes)

(Note: aside from problem-solving, use this procedure also toward discovering the sources of support for you, your policy, or your proposed solution to the problem—or anyone's pet solution to the problem, which often has to be run through before other perspectives can be opened. Likewise envisage the wild success or over-achievement of that person, policy or proposed solution. Likewise, when using this procedure as an accelerated learning technique, in combination with "case studies" method in management training or in socio-behavioral courses: exaggerate the extent to which various proposed resolutions of "the case" could affect the persons or factors under study.)
Step Two — Identification of Problem Elements: In groups of 3 to 6, brainstorm WHO are all the players in that problem situation and who are all the players in the wings. Anyone who relates to, is affected by, affects or could effect, or could be affected by that problem situation! Give specific names wherever possible, but identify also all groups and "interests" as well. Instead of slowing down for arguments, use the "Support-First Rule" from Dynamic Format. When in doubt as to whether a named entity is part of the situation, record it anyway instead of debating[9].
All named persons, parties, interests each go on a slip of Post-It.
(5-12 minutes)
Step Three — Setting Values, within your groups of 3-6. In those groups, as rapidly as possible determine with each Post-It entry what the impact of solving the problem would be on the (perceived short-term) interests of each. Do this by means of "Quick-Vote." As each entry is read aloud, within 3 seconds everyone in your group "votes" his/her estimate by holding up or down 0, 1,2 or 3 fingers. A positive impact on the entry's perceived short-term interests is signified by the fingers held upward; an adverse or negative effect by the fingers held downward. In either case, the greater the perceived short-term impact on the entry's interests, the more the number of fingers held out accordingly.
Position the Post-It of the entry at horizontal 0-line or 1, 2, or 3 spaces above or below, on your sheet or board, according to the rough average of your group's "vote."
On the left edge of the allotted large sheet or boardspace, provide a column space for "squiggles." On the right edge, a column for asterisks (*). Accordingly,

If there are wide disparities in your group's voting on some entry—say a plus two and a minus three—place that Post-It entry in the "squiggle" column. These squiggle cases are of special interest because examination of them often reveals whole sectors of the problem situation which might not otherwise have come to view.

Also: for any entry where there is a strong sharp impression of long term real interest differing greatly from short-term perceived interest: post that entry in the asterisk column. In whichever column, post each entry whether squiggle or asterisk to correspond in terms of level with the average of your group's perception of that entry's perceived short-term interests.

Continue until all Post-It entries are posted somewhere on the sheet or board at some valence level.

(10-15 minutes)
Step Four — Examine your sheet or board, with this concept in mind: Entries above the 0-line (those with positive valences) are your potential sources of support for a solution. Below that neutral 0-line, entries with negative valences are likely to be somehow involved in the defeat of attempted solutions (and policies and courses of action).
Of special interest: swiftly review and analyze your "squiggle" and asterisk entries. In some special cases you may want to recap the above 3 steps in miniature, to identify elements within that special entry—these can be especially illuminating!
You may also discover key aspects of the problem situation from examining some of the possible relationships between entries, on and off the board or sheet. Especially focus on how a change in one might affect another.
(5-15 minutes)
Step Five — Win/Win-Finding: determine what changes or "sweeteners" would need to be added to the plan or solution or policy or course of action, to bring more entries topside your 0-line (making their perceived short-term interest impact positive). To what extent will the cost of those sweeteners subtract from some of your support? Start tinkering with the solution(s) or policy in such a way as to see if you can turn all valences positive and still have a distinctive thrust of solution.
It's crucial to begin making such changes or adding such sweeteners, if you are to emerge with a solution which will generate broad enough support to be a solution. One experimental group, in fact, which up to this point had performed brilliantly, froze on its initial solutions without even beginning to explore such changes to those perfect jewels of resolution—and was the only such group not to develop at least the beginnings of an emergent genuine solution. (Even the several groups which ran out of time were clearly en route to an effective solution.)
If, as you check out these sweeteners, your solution is beginning to look a bit thin your policy expensive or shaky, you may want to take a picture of this configuration of your sheet or board, then try a different proposed solution or policy. Go quickly as possible on each entry interest, to get group averaged estimate as to possible change from old to proposed new solution impacting on that entry's perceived short-term interests.
This is also your opportunity to get someone's "pet solution" run and out of the way. The more important a problem is, the likelier you will have people who have pet solutions to it. To free their full attention for the ultimate solution-finding, as soon as possible after running such a pet solution through the valences and down the tubes, start running another proposed solution through the valences.

Design Objective: find a solution which constitutes a win/win for all concerned, if possible even in the short run - and definitely a win/win for all in the long run. To the extent that the eventual solution falls short of that objective, is the measure of the cost in power, force or extraordinary persuasion which would be required to implement that solution or policy.

If that solution is not universally win/win, it must be at least close enough that sufficient support will be generated to supply special or compensatory incentive to those factors which otherwise would not be sharing in the win. If your solution cannot generate that much support, it probably is not a good enough solution. Seek another which is.

Example: one suggested idea for finding a cure for AIDS faster (or any seemingly incurable fatal disease which still leaves mental faculties relatively in good order), would be: to STAFF an entire major research center (and dedicated funding commitment) with medically qualified researchers who are themselves AIDS victims—and turn them loose on the problem. However—

—Other identified elements in the AIDS problem appear to be adversely affected by that possible answer and/or by any possible major and/or inexpensive cure. These elements would, consciously or unconsciously, probably block action—for all sorts of high-minded reasons, explanations, protection of the public, safeguarding of human rights, rules of accountability for public resources, whatever.

To be adopted, this solution option would have to be accompanied by other measures, possibly by direct incentives to those other identified elements—and delicately enough not to offend sensibilities with an air of "buying off" someone or of impugning motives.

More generally, this example suggests, in broad outline at least, a strategy which might be used to rapidly find cures for most remaining incurable diseases, some of which have been around with billions in research and treatment spent on them, for a long time and with a tremendous extent of human suffering.

Step Six (if needed): If all your major solutions and policies have shown up bankrupt, then brainstorm in your group all possible solutions to the problem without regard to acceptability or suitability, to flush new options into view. The "Support-First" rule is back in effect. Try for 40, 50, 100 solution suggestions.

Quickly pick out the most interesting ideas from the list, and/or bunch them. Give special attention to that idea which was first greeted with a burst of laughter, since that often turns out to be the best idea. If no one idea emerges "head and shoulders" above the rest, use whatever quick sort-down method can get you to the 2-3 most interesting solution possibilities within 3 minutes or so. Configure each on your sheet or board as above, then look for the least expensive sweeteners which will bring virtually everyone above the 0-line. Also, on each of these,

Compare your own gut-level responses to each solution. See if you can identify and state in particulars the cause(s) of that gut-level response. See what that factor does when introduced into your board or sheet. Remember that any problem solving formula or method "is a tool, not a rule;" its purpose is to expand perception over facets which otherwise might not get noticed and which just might possibly contain your winning answer. Sometimes, pointing in one direction is what brings another direction into view. In the long run, not the method but you make the decisions.

Step Seven—Select the preferred solution. Improve further on it. Design a step-by-step sequence of operations which will cause it to be implemented, a series of specific steps culminating in completion of the solving of that problem. Your steps need to be concrete enough, specific enough, that you will readily know when each is completed or that it is not. Pinpoint each step in sequence or time. Make sure you've accounted for First Step. ("What's First Step? If there's anything which has to be done before that step then it's not First Step so what is First Step?")

—In other words, generalities may point the direction, but solutions happen only through concrete specific steps.

Experience thus far:

Thus far, participants have been laymen at best, with regard to the problems addressed. —Yet their levels of discourse, analysis and solution-finding under this set of procedures consistently has been profoundly superior to the recorded and media-broadcast deliberations on the same topics by assembled experts and leading professionals.

In every instance, participants and observers have been astounded by the degree and quality of information and insight developed where all participating were initially thought to be uninformed. Every time, key facets and possibilities have emerged which do not appear to have been considered anywhere else.

It will be interesting indeed to see what can be accomplished once teams of informed experts and professionals are assembled to these procedures.

_________________

3. An Example—Brief Brief on a Speculative Case Study:

Can We Make Part of the Problem
Into Part of the Solution?
(—Also Known As: "Adventure With a Squiggle")

Can the most nightmarish part of our environmental and global pollution problem actually provide a major part of the solution?

I. General Case for a Proposed Solution—-

Let's look at power sources—-

There's only so much hydroelectric potential to go around.

Conventional, fossil-fuel-burning power stations—

—use up fossil fuels(!);

—pollute air and water;

—worsen our accumulating world greenhouse CO2 effect; and

—if oil-fired, worsen our trade deficits and national dependency.

Solar power, after many decades, we've never yet managed to master the art or science of making economical on a large scale. Hopes for space-based solar power have slipped another generation further back with the retreat of plans for the U.S. Space Station.

Geothermal power pollutes air and water.

Ocean waves and tidal inlets, after many decades we've never managed to make into an economical power source.

Temperature differences within different layers of part of the ocean, after more than a decade we've not yet managed to make economically feasible as a power source. Perhaps the same principle could become feasible with the sharper temperature differences found in groundwater in desert regions.

Controlled fusion power seems more out of reach now than when we first invented nuclear reactors, and "cold fusion" has gone into the books as an example of myth and hysteria in science.

Conservation of power, as relatively a power source, has begun to bump into its limits. Thermal insulation of buildings has run into radon. We don't seem to be able to push Detroit into much higher fuel efficiencies. Social resistance to further measures is climbing unless we radically adjust incentives. Only the computer revolution has significantly reduced power demand, and how much further can that aspect go?

Nuclear reactors are not only directly dangerous a la 3-Mile Island and Chernobyl, but their greatest problem is the continued accumulation of radioactive wastes, already far more than we've figured out how to handle and potentially the most lethal threat to all life on Earth. To build any more conventional nuclear reactors would be one of the most irresponsible decisions in the annals of history!

—So what IS left? —Those very same radioactive wastes already produced!

II. The Proposed Solution—-Convert radioactive "wastes" into a power source in secondary thermal reactors.

The end product of radioactivity is heat. —Enough heat, when brought together, to melt and pump sodium as a thermal conductor, or steam if run cooler than that, to drive turbines or other power-generating devices.

Can there be much doubt that, as a working power source, a given set of radioactive "waste" would receive much more careful handling than it does now as "waste?" Still dangerous, but the assembly of radioactive wastes into "secondary," thermal reactors has to be counted as a major safety improvement over today's situation.

Every unit of power generated from radioactive "waste" is that much less greenhouse effect, that much less air and water pollution, that much less fossil fuel used up, that much less foreign trade deficit and dependency resulting from more conventional power generating.

Unlike conventional nuclear reactors, such "secondary" reactors from radioactive "waste" will not generate more such waste. In two senses it will make less such waste, in that—

It moves stuff from essentially uncontrolled "dumps" into much more carefully handled power plants; and
It's power can begin to replace conventional nuclear power, thus reducing the rate at which further such wastes are being created!

Design and building of these "secondary reactors" will also be a useful conversion of some of the technical resources of our dwindling defense industry, and a good spur to our stagnant economy. (Editorial note: written about 1990, but still a recourse apparently appropriate for both that industry and the economy as of the 2001 edition.)

In the 1940s and '50s we made the basic national decision, echoed elsewhere, to build regular nuclear power plants and to treat their non-power output as waste, rather than as part of a thermal, secondary power retrieval system. Whatever the economics were then as regards such secondary retrieval, those economics have certainly changed since, and the whole issue certainly bears rethinking.

When we originally made that basic national decision, we were in the throes of a technological fantasy about limitless clean nuclear power. Fusion power was just around the corner, we had not yet come to appreciate how hard it is to keep up safety standards in large-scale enterprises and over long periods of time, and we'd certainly not anticipated or come to appreciate the extent of the problem that we are now posed vis-a-vis horrendously accumulating, dangerous, nowhere safely disposable radioactive wastes. Each of these factors by itself fully justifies our rethinking that decision of not converting radioactive wastes into secondary thermal retrieval power reactors. Taken together, it's quite remarkable that no one is exploring the issue.

—And quite remarkable that our officials and technicians are so casually discussing the disposition of an extremely dangerous poison and possible deadly permanent weapon whose half-life usually exceeds that of the longest life span of any human civilization to date, by various reckonings some twenty to thirty such civilizations having come and gone upon this planet. Imagine the consequences of such "waste deposits" falling into the hands of contentious barbarian bands characteristic of the dark ages following the fall of civilization! We have GOT to stop making more of this stuff....

III. A first look at incentives regarding this solution—

—And whatever the economics were then, back in the late 40s and 50s; and whatever the economics may be now: there is a very simple, direct and easy way to change those economics for the better. Exempt from all taxes for a decade, income from commercial exploitation of a long list of substances hitherto known as dangerous and toxic wastes! (—Including radioactive wastes.) Tax such income at half rates for the decade following and at normal rates thereafter. To take advantage of the tax break, all sorts of uses will come out of the woodwork to use up such "wastes." Any foregone tax revenues during that interval would be many, MANY times made up for by what we would otherwise have to spend in protecting and restoring our livingspace from those dangerous wastes, and our absolute societal and global costs saved would be many times more even than that!

Until World War II, a major part of the history of the industrial revolution was a matter of each generation finding commercial uses for the waste by-products and overlooked resources of the previous generation. Since then we appear to have let matters in this regard get away from us. The proposed tax incentive would bring us back in line with this historical precedent, and further would be very much in line with current social efforts to reclaim and recycle specific wastes such as plastic and aluminum.

Conclusion: we should immediately proceed to study the feasibility and simple design of secondary thermal recovery power plants using some of our radioactive wastes. The wastes we are so anxious (and unable) to control now should be made available to commerce under appropriately controlled and well-understood conditions. We should also begin immediately to determine how best to define and apply the proposed tax incentive to encourage the commercial using-up of all sorts of toxic and dangerous substances with which we've let our world become overrun.

IV. Short-term losers who would need "sweeteners" in order not to become major opposition to the proposal—

We won't go into an exhaustive listing here, in order to take time and space to look at a most fascinating squiggle/asterisk factor which developed in this instance. But the most obvious major losers are, of course, all the competing industrial sources of power, especially oil and coal, and suppliers of equipment and services to those industries. The sweeteners, also, required to offset to these big "losers" the effects of a major new source of clean power, thus far appear to be more controversial than the original proposal though if a concerted program of this sort eliminated much of the need for conservation of power, cutting back on some areas of power conservation effort might serve as part of such a "sweetener," attracting support from builders who could be among the major "winners" if their insulating costs were reduced—rendering insulation manufacturers a source of opposition, and so on. Obviously, this is an unfinished case since the people in our thinktanks thus far have contributed their time for free and are "scarce" in relation to the need for their services both on this and on other matters. —And no one has yet hired any of our thinktanks (or anyone else!) to dig deeper into this issue, or provided any study grants for this purpose.

A lot of the opposition to the tax incentive measure or other application of the proposal, that nuclear "wastes" be converted into a thermal power source in secondary reactors, is marginal and could easily be headed off with just a bit of sweetener. A few of the more rigid power companies, and suppliers of some of their equipment some of whom, if identified, could be contracted with for the very same program and thus brought around. —Unfortunately most of the conservation groups, seeing this as one issue less to get the public excited about and in their camp of support. Unless they can be gotten to see the advantages in membership money and power terms of becoming advocates of the proposed program and getting public credit for it.

Among "winners," besides the general public whose diffuse interests almost never get served directly, would be much of the health and safety insurance industry; the State of Nevada where the Federal Government has been planning to dump most of the nuclear wastes; neighbors (and realty interests) proximate to the many current temporary nuclear waste dump sites around the country (assuming that they even know that such a site is so close by them! Most don't know.) —and, most of all, key segments of the defense industry who would be building the plants and equipment for the proposed secondary reactors.

All that much is obvious, even without running a formal I/E Analysis to discover sources of support and opposition.

Each time we ran such an analysis on this issue or started to, we ran into a most remarkable consideration.

Obviously, the Federal Nuclear Regulatory Agency, and to some extent the various transportation agencies and other related agencies, would be a major player or factor in the game. But when we began to look at whether this proposal would be a positive or negative valence for them, we got squiggles and asterisks. When we gave these closer attention, they broke out mainly in this manner:

Lower branches of the agency or related agencies would be highly specialized, and bureaucratically would see this proposal as meaning a lot more work to hassle with but not enough positive to bother. Hence, lower branches receiving the proposal would be negative toward it and find reason to reject it, regardless of its merits for the country as a whole.
Higher, more generalized levels of the bureaucracy or bureaucracies concerned, would instead see possibilities of expanding or of building new empires, even in the short run and especially in the long run. The higher ranking the officials contacted on the proposal, the more likely they would be to support the proposal.

The strategy this configuration dictates is, not to submit the proposal through channels at all, routed as these are to the lower, more specialized rank and file. The only way for the proposal to get enough of a hearing, consideration and argument is via a systematized campaign of letters and E-mail and personal contacts with the top people in the agencies concerned, even after being referred down. The campaign has to be sustained, kept in the attention of the top people because the first few times bureaucrats at lower levels will keep finding ways to defeat it. That will turn around, and the lower echelons will finally swing to support the thing and do what they're supposed to do, once it becomes clear to them that it'd take far more work and time and attention and effort to keep fighting the proposal than to let it go through.

—All this without regard to the actual merits of the matter! But that is what is built into the structure of the situation, as revealed through I/E Analysis, and whatever protagonist(s) of this proposal can ignore that only at peril.

Upon due reflection, we realized that this structure is true also for most innovative proposals, independent of their merits. The days when ordinary citizens could suggest an idea and get it considered on its own merits, are long gone. So long as government agencies are structured with specialized lower echelons and generalized upper (and it is difficult to see how they might be otherwise arranged), the system has a built-in drive toward political power arrangements, and away from considering actions and policies and proposals by their actual merits.

Note also that this structural predisposition, rooted in government agencies and tending response systems away from considerations of merit and toward political power—and is that really all that much a surprise, given what we see around us?—is true for all forms of government, ranging between formal democracies and formal totalitarian tyrannies. So long as wealth and power are concentrated to get things done through government, the policies and deliberations of government will be driven away from what is best for the country and tend toward being less and less rational over time.

—Often or usually either until the situation collapses ruinously, eventually to restart in another such cycle; or until a way is found—such as use of incentives to the private sector instead of more direct methods to "get things done"—to diffuse those concentrated stakes of power and wealth.

—All of this from a squiggle!

———————

Step One: please discuss this proposal—in any or all of these regards—

to convert nuclear wastes into a secondary power source;
to use tax incentives to induce the private sector to convert wastes into commercial products and services;
the general case with "the squiggle," that because government agencies are constructed with specialists near the bottom and generalized leaders at the top, this "squiggle effect" tends ideas and proposals away from consideration by merit and toward political power arrangement increasingly antithetical to the interests of the whole—

with at least one other person whom you respect.

Thank you.

4. Other Uses for the Win/Win-Finder Method

I. The Win/Win-Finder, or I/E Analysis,
as an Accelerated/Enhanced Learning Technique:

In the socio-behavioral curriculum—history, psychology, sociology etc. — this same procedure can be used to refocus the "Case Studies" method used there and in management training. For each case problem: lay out all elements and "players of the game" and "players in the wings," just as with the main method, leading to a dynamic and profoundly enriched analysis and understanding of the "case" or problem situation so addressed.

Even more directly, use this procedure in sessions of the "Problems of Democracy" program.

In history courses: whether highlighting crucial factors and epochs in a conventionally chronologically taught course, or featured in the "post-hole" or episodic approach to history-teaching.

Use this method also to brilliantly highlight moments and situations portrayed in psychodrama and sociodrama.

In each instance here, just as in our thinktanks with corporate or societal problems: I/E Analysis instantly sophisticates participants' understanding of the problem area and its dynamics, and also is highly involving of interest. Initially naive and uninformed groups quickly move ahead of the experts in their grasp of the problem situation and its potential resolutions. That impressive leap in understanding can not only serve problem-solving purposes but educational ones, as suggested here.

Just as Walt Disney's "Storyboarding" technique has the potential of enriching the study of literature and drama, above and beyond its present uses in creative theater and therapy, I/E Analysis or Win/Win-Finder, by highlighting the problem situations of characters in stories and dramas, has high potential for enriching educationally the study of literature and drama, and for heightening the poignancy of "might-have-beens" in tragedy.

II. Off the Horns of a Dilemma:

It's usually the people who care about some problem or issue, and who have put some thought and concern into that matter already, who have developed some pet or stock solution or response to it. Because everyone else tends to dismiss their ideas—and concerns—pretty much out of hand regardless of merit, it's easy for some of these concerned, thoughtful, at least partially informed, people to become shrill, repetitive or otherwise abrasive about it, deepening further the likelihood of rejection.

It's wonderful for a concerned, caring—and usually-dismissed person to have the Win/Win-Finder run on his idea or proposal. He's actually getting a hearing on the thing, it's actually being considered! He might not much like the outcome of that analysis—but he was part of it, he saw how it went, he no longer is driven toward—

Obstructing everyone else's proceedings in that topic;

Dismissing and ignoring everyone else's ideas in that topic the way his own were treated;

Not hearing further information and insights, as he busily continues mentally rehearsing his own arguments and looking for an excuse to re-insert them.

Instead of being a noise and an obstacle, this caring and informed person usually becomes a genuine asset to the group's deliberations on the topic, and considerably enriches the final outcome even though it is usually very different from the answer he was for so long utterly convinced of.

Turning such bright, concerned, abrasive obstacles back into productive human assets makes use of Win/Win worthwhile even for that reason alone, even if it didn't solve problems and do all these other things

III. Discovering the Support and Opposition to Your Position, Your Plan or Policy:

Whatever your position or title, it automatically tends to attract support from some players and opposition from others. Some players are cast, by definition, in a more complementary role; others in an actual or potentially competing or adversarial role. Identify all players in relation to your position, title or job description. Now imagine your position become supersuccessful and powerful, exaggeratedly so. Assign valences as before. Cross-check: imagine yourself suddenly removed from that role and from the situation—who would gain? Who would lose? Who would be discomfited? Assign valences as before, remembering this time that you are working in the inverse, or negative.

Especially important to remember and consider are two things—

This map is showing us the potential for unconscious motivation and not the actual, conscious motivation which can be and usually is very different.
Also, with respect to role: there's the role and there's the human being playing that role. The human being can be the major factor and the role minor, or the other way around—and the human being is usually motivated at differently than is the role he is playing, which is part of his unconscious motivation.

Roles are a key means for us to learn and to grow, but they are not us. I have a role but I am not the role that I am playing. In fact, I am considerably more than the sum total of the various roles I am playing or have played. Most Americans have not been educated on this distinction between roles and the people playing those roles, and so are muddled, confused or otherwise easily misled on these matters. Opponents on some point or issue are too easily regarded as - and treated as - enemies when, with a little care in handling, they could become your great allies and friends in most other contexts. Play hard but play clean and be quick to extend a helping hand back up as you move toward some other context. Anticipatory cultivating of personal relationships can also prevent opposition where your map would otherwise predict it, even where you don't formally design in "sweeteners" of one sort or another.

Similarly with a policy or policy decision. Again, imagining the exaggerated super-success of that policy outcome to outrageous levels, rather than a merely normal success. That exaggeration gives you "more room" to perceive the relevant valences among your various affected players.

IV. Win/Win-Finder or I/E Analysis in Personal Goals Therapy:

Did you once have goals which are fading because you've somehow just not been able to achieve them? Are you settling for less than what you originally set out for?

Even one human individual is a complex being, not only biologically but psychologically and socially. Each role that individual has played or is playing—father, son, daughter, stern parent, nurturing parent, dependent child, wayward child, wunderkind, friend, boss, employee, lover, packmate, etc. etc. —and each stake s/he is playing to or has played to, defines a facet.

Each of these items in your personal history and situation defines a facet which, with regard to the long-standing non-attainment of some particular goal or standard, can be regarded a la I/E Analysis as a "player in the game" or in the wings.

If you have "stabilized" short of your long-desired goal or standard, despite some good efforts along the way: this suggests equilibrium, indeed a complexly homeostatic equilibrium identical in character, at least, to those addressed in continuing or chronic long-term societal problems.

In relation to that long-held but unfulfilled goal or that chronically failed standard:

Identify and give short tag names as above to all the roles you've played, other stakes you've played to, and whatever other identifiable facets of your being.

Imagine that goal or standard exaggeratedly overfulfilled and achieved. Relative to that exaggerated success,

Race through those identified tag-named aspects of yourself assigning them valences just as you did with your teammates around that corporate or societal problem statement-in-the-box. With a little imagination, conduct "bargaining and negotiation" in some way on behalf of or between these various facets of yourself, to discover your main sources of internal support for reaching your goal, and to discover some arrangement wherein all facets of yourself are brought above the 0-line so that you no longer are preventing yourself from achieving your aim.

————————

These were but a few of the possible extensions of a very young method of creative solution-finding. What the future holds for it, your handling of it will help determine. What you have not experienced, until you actually go through a session with some form of this system, is the amazing quality of public or group shared insight and sophistication on matters which you could have sworn that no one present knew a thing about. Experiencing this effect will, in and of itself, tell you some surprisingly positive things about yourself—and about others around you.

—And reveal some surprising new opportunities on great groaning chronic problems hope of solution of which had long since faded away. Mad or no, we don't have to take it any more!

Your own entertaining and/or productive test and use of this method, in one or more of its various forms, will go a longer way than you yet realize toward the day when many, many people discover themselves to be more than a match for the difficulties which had been so besetting them and besetting us all. —And the positive opportunities opening up are of a scale, scope and nature such that it's well worth staying alive through these times to share in that coming experience.

TOP

Chapter 6
Adjusting Incentives as a Main Way
to Get Desired Things Done,
Preferred Over Conventional Administrative
and Governmental Methods

The General Proposition—

All human societies are incentive societies. Tautology: people are moved by what moves them. What is an effective mover or incentive differs from instance to instance. If this book were written in a predominantly Abo-bushman society—or a predominantly Buddhist or a predominantly Muslim society—or from a politicized socialist society—it'd be a very different book from the present one written in the American context with material market traditions. Yet its basic principles and premises would remain the same.

Indeed, the one certainty is the change which will take place in what is an effective incentive, as you move from one cultural context to another. Also, a materialist society like ours will experience major changes in what's effective among its incentives, once a well-thought-out incentive policy has rescued it and successfully improved our response to our various material needs. People's motivations will tend to drift "up Abraham Maslow's Ladder," so to speak, concerning less and less about dollar rewards and more about how they regard themselves and are regarded by others. —So a crassly material incentivized society will necessarily soon obsolete itself and need to re-think and redesign its system of incentives, though we believe that pretty much the main considerations and guidelines addressed below will still hold true. Though we have a number of specific incentive proposals with which to address various issues and problems, this strategy of systematically using incentives instead of coercive methods has to go far beyond simply a set of specific proposals for our current issues and problems.

Our society, as mentioned at the beginning of this book, has from time to time even undertaken deliberate use of incentives on one issue or another, because that seemed to be a good idea in that specific regard. What we've failed to do, though, is to address the strategy itself in any comprehensive way so that that intelligence can in turn inform our other choices.

All human societies are incentive societies. The matter may be more critical for free-market oriented and democratic-oriented societies (note we did not say societies which ARE free-market or democratic, lacking present-day examples). But no society can afford to let its prevailing incentives drift too far out of line with its main policies and goals, or it will disintegrate.

We can in fact go on to observe that our type of society, predisposed by its traditions, at least, toward democracy, freedom and a free economy, has by definition values very congruent with the idea of using incentives in place of more coercive, direct control methods. We have already distanced ourselves from the more direct, brutal or harsher methods of governing and of imposing collective will—enough so to usually get upset when instances of those harsher methods surface nonetheless. One might well say that "incentivism" is a logical, appropriate extension of the American ideal and of the ideal of all such societies oriented toward democracy since the time of Jeremy Bentham and the Utilitarians.

Further: it appears that not many societies—including our own—can afford to let incentives drift at random or at happenstance, uninformed by any systematic thought, theory or sustained comprehensive effort to relate its incentives to its goals and policies. Hence, in this chapter and the next, we attempt a thumbnail sketch of the beginnings of a comprehensive theory and set of guidelines on incentives, and on the use of incentives as an instrument of corporate and public policy. This discussion stands on its own, independent of our foregoing Incentive/Equilibrium Analysis but nonetheless obviously closely related to it.

Negative incentive—punishment—obviously has its place in any such theory but a minimal place. People do often tend to adjust their behavior to avoid punishment. But we know from historic and societal example that the stick is far less effective than the carrot. Especially we know this from psychology and biology. Any reinforcement of a behavior or trait is a reinforcement, reinforcing the likelihood that the behavior or trait will be repeated. Even punishment tends to reinforce the likelihood that the behavior punished will get repeated[10]. Hence, our discussions of incentive will revolve mainly around carrots, not sticks. If our society could in various ways reorganize its affairs with this consideration in mind, life here would become a lot more rewarding and less punishing!

Both within most firms and agencies, and in society generally, most major problems appear to be answerable by means of variously adjusting the incentives—motivators or motivating factors, literally—which bear upon the margins of decision of the people in those situations. —And on the margins of decision of the people in the wings of those situations.

At any given time, we and everyone are working in and embedded in a context in which are to be found literally hundreds of diverse incentives, nearly all of them in place by happenstance or through the workings of dynamic systems such as the marketplace about which Adam Smith so well taught us in 1776. Use of incentives is as old as the hills, even deliberate use of incentives in specific instances throughout history. Our concern here is with adjustment of this mix of incentives, and with thinking about incentives as such in a comprehensive, systematic way so that our subsequent handling of such matters can be more intelligent, more congruent with whatever effects we are seeking.

We herein propose that many or most issues and group or societal goals should in fact be addressed by adjusting incentive, instead of by more direct or coercive or overt means of social, managerial or direct governmental control.

To substitute adjusting of incentives for more direct controls, we see as—

A way to get things done better at less cost.

A way to reduce the stakes of centralized power—and to reduce the degree of misbehaviors which accompany such stakes.

A way to bring attainable many goals and achievements which elude us now, corporately or as a nation or civilization.

A way to strengthen individual freedoms.

A way to strengthen the roles played by creative individual initiative.

A way to solve or mitigate hundreds of specific "unsolvable" difficulties which plague us now and which in some instances threaten our very survival.

We cannot emphasize enough the issue of the difference in terms of human freedom. Under conventional managerial or governmental technique, specific persons - and sooner or later, all of us - are constrained to act other than we wish. —By force or threat of force; by pressure of personal authority and/or persuasion; by social pressure; by the prospect of more hassle than we care to stomach should we pursue our own path; by fear of loss of job, of standing, of position, of respect, of access to the action, of insurance.

To get things done by a simple adjustment of incentive, on the other hand, means that we rely on individual freedom and initiative to get things done and, in fact, reinforce these. No one is compelled against h