I see here that Nasa has decided to have prizes to pay for accomplishments rather than for proposals for ongoing research.

Prizes are an interesting organizational device. They have some benefits for those who run the system. They tend to work better for innovation, and less well for durable systems. They are open to abuse by those who run the game.

The abuse problem is obvious; though two fold. Like the lottery they tend to draw in a large population of players that don’t appreciate the terms of the game; i.e. the odds. The second aspect is that those that set up the game can often rig it so they capture the long term benefit from innovations done by the winners. Academic research has historically been framed in a way that the innovators gained only prizes and reputation but did not typically get to capture the economic benefits of their work. Of course, in exchange they did get tenure. That can be a fair deal. Particularly when the probability of most academic research leading quickly to economic return is very low.

Microsoft’s developer network is a good example of a game you can play where you might win a big prize but chances are they will own the long term benefit of your work sooner or later. If the players believe that the game has lousy odds and is structured poorly they won’t play. This is one hypothesis about why Microsoft has been forced to create it’s own R&D department. Another example, somewhat less dysfunctional, is the venture capital game. But if you look at the number of cases where a startup was swallowed by a large firm and then comes to naught you might suspect that’s because the startup’s owners didn’t see any reason to design for the long term since that was the problem of the firm that buys them out.

People talk about converting the patent system to a prize system as a way of getting a more functional framework for generating innovations. Innovations, as information, are public goods; but they are a species of public good where you only need one innovator out of a vast pool of contributors. The cure for cancer is the classic example. At the other end of the spectrum are the public goods like safety that require that all contributors remain vigilant. The classic example of this is the maintenance of a river’s levee.

Since I consider Nasa to be a murderous institution that has lost all ability to manage the safety of it’s operations I’m not amused by further organizational moves in the direction toward increased risk taking and reduced collective attention to safety. Prizes are a lousy way to make safe systems – particularly if the innovator doesn’t get to bear the cost or the benefit of the long term. This is at the heart of the generative force that creates a our parade of superfund sites.

Game theory dudes like to treat all activities as a game and there is some validity to that. It breaks down when you need to look at the longterm durablity of the system. Longterm issues lead to trust issues. Game theory isn’t terribly sophisticated about that. When presented with a game look at the odds, look who captures the longterm benefit, look who cleans up the mess, and try to ignore the prize. Oh, and consider: do you trust the house?

As an engineer I learned that you move a mass by applying force. I learned from “Don’t shoot a dog” that you move a smart animal by providing reenforcement for good behaviors; that attempting to force a smart animal will only cause resistance at first and then they will leave. I learned from the liturature on motivation that rewards work to get behaviors in the near-term, but that they tend to extinquish the desired behavior in the long-term.

My summary of that: you push inanimate objects and you pull animate objects.

I’ve never quite figured out what the right approach is to a institution. A mixture of both I suspect. For example when you call customer service at Apple you dealing with smart folks; and those you need to pull forward – meanwhile your dealing with a large massive beauracrachy. For that you seem to need to push: argue, be firm, hold the line, make a noise, etc.

I suspect that more your inside the institution the more it becomes fruitless to push and the more it becomes wise to pull: convince, encourage, construct, be creative, hold your tongue, etc.

Another framework:

• Geology – Platetechnonics, Erosion, etc.
• Nature – Evolution, etc.
• Culture – Languages, etc.
• Goverments
• Markets
• Firms
• Fads

Somethings change faster than others. Which makes for interesting interface design problems.

The old bay bridge floats on 60 foot pillings in a slurry of mud; which means it would probably collapse in an earthquake. The new version will have 300 foot pilings that reach bedrock. How do people reach the consensus to do a project like this? How deep can a firm’s pillings go?

Two moral frames works. Commercial and Guardian. From Jane Jacob’s book Systems of Survival.

Moral Syndrome: Commercial

• Shun force
• Come to voluntary agreements
• Be honest
• Collaborate easily with strangers and aliens
• Compete
• Respect contracts
• Use initiative and enterprise
• Be open to inventiveness and novelty
• Be efficient
• Promote comfort and convenience
• Dissent for the sake of the task
• Invest for productive purposes
• Be industrious
• Be thrifty
• Be optimistic

Moral Syndrome: Guardian

• Shun trading
• Exert prowess
• Be obedient and disciplined
• Adhere to tradition
• Respect hierarchy
• Be loyal
• Take vengeance
• Deceive for the sake of the task
• Make rich use of leisure
• Be ostentatious
• Dispense largesse
• Be exclusive
• Show fortitude
• Be fatalistic
• Treasure honor

This dialectic is more prevalent than you’d expect. For example in building web systems I find that the folks attempting to build the business tend to be in the first camp while the people running the data center tend to be in the second camp. Both syndromes have their place. While an individual might prefer one to another it’s valuable to appreciate that there are situations where the other one is more optimal.

Where you get into all kinds of ethical problems is designing custom syndromes consisting of half of one list and half of the other. But then, it is where the interesting work is to be done.

If you look at Verisign’s recent offensive actions thru these lenses it’s hard to see a way that what they did was ethical from the point of view of either syndrome.

This book has grown on me over the years.

At work we have recently completed the annual trama of performance reviews and transitioned into the annual trama of goal setting. One thing that impresses me about my managment is that they actually sent down a list that you might call “what the firm wants.”

Meanwhile I’ve been carrying around a scrap of paper – well after a while I moved the scrap into my PDA. I copied this scrap off a sheet that was pinned to somebody’s office wall. So, I’ve totally lost this lists’ provance, and since I tend to rewrite as I copy I’ve probably lost the original content as well.

My list is titled “what people want.” It has three subheadings: competence, community, and control.

People want to be competent, good at what they are doing, proffesional, successful, clever, etc.

People want to be part of a community (or more likely a few communities). Communities give one that degree of the stablity and safety that comes from durable longterm ties, improved performance from the synergies of complementary talents, the warmth of emotional ties, a narative, a common cause, a certification of self.

People want to feel in control, to be free to act in ways they think are best, to be empowered to take risks and the safety to know they can screw up. This is very similar to people’s strong preference for intrinsic motivation.

These three are all matters of degree, role, and temperment. Consider the cartoon versions of various roles. The artist is often assumed to being all into that freedom thing, control is his thing, community ain’t, self actualized, intrinsicly motivated. The judge on the otherhand is expected to be highly professional, competent, and to supress his tendency to creative interpretations of the law. I guess that’s the old Quaker/Puritan dialectic again.

The challenge for an institution is to bridge between what the firm needs, and these three. That is a bit-o-work! It’s worth getting right.

Technology erodes the boundries of ecological niches. Local communities are disrupted. This is true in ecologies, cultures, and business. In business you can take sides – you can seek big disruptions, or you can seek ways to defang the disruptions. No matter which side your on Michael Porter’s classic on Competitive Strategy has a facinating list of what prevents an industry from consolidating. What keeps it fragmented. This is one of the very few places I’ve found work that speaks directly to the question of what effects the slope of the power-law.

Here is a quick review of his list. Actually he has four lists: what keeps an industry fragmented, how these might be overcome, why some industries remain stuck in a fragmented state, and finally traps that catch the unwary industrialist into thinking he can consolidate. Really these are all the same list recast into different presentations.

Let me summarize the main list.

What things can keep an industry fragmented?

• Low Overall Entry Barriers
• High Exit Barriers
• Absence of Economies of Scale or Experiance Curve
• No scale advantage in inputs, i.e. buyers and suppliers
• High Product differentiation, particularly if based on image.
• Diverse market needs, and hence diverse product line.
• Need for close local control and supervision
• Personal service
• Heavy creative content
• High inventory costs and erratic sales
• Local image or local contact
• Local regulation
• Goverment or physical constraint on concentration
• High transportation costs

For example the first two. That pattern of low entry barrier/high exit makes an interesting combo. When the industry first emerges you get a huge number of firms popping up. Then because it is hard for them to exit (or merge) the industry remains fragmented. I think this happened in the web middleware industry. A huge number of ways of building web sites emerged, lots of sites were built using these assorted systems, reegineering them is extremely expensive; and so now the industry is delightfully diverse. The prescription for addressing this is to try and create some barriers to entry; for example in the middleware example really, really, really complex standard might do the trick.

I enjoyed listening to Teresa Amabile last week at a workshop on Open Source. She was asked to do color commentary on three papers that were looking into the motivations of contributors. Dr. Amabile’s work is on creativity and one of her key findings is that creativity thrives under intrinsic motivation rather than extrinsic motivation.

Though she didn’t mention it my favorite detail from that literature is that engaging in heroic fantasies is almost certain to put the kibosh on creativity. A more robust finding is that if you give rewards for an activity, for example you reward kids for reading books, you get a increase in the behavior, but the moment you stop rewarding the behavior stops. You can actually use this to stop bad behaviors; you reward them (cash is good) for a while and then stop.

There is a lot more to Amabile’s work beyond the intrinsic/extrinsic motivation aspect!

In the best traditions of scholarly work she pointed out that all the data in the papers seems to support that theory. While that is somewhat true I must say that only just barely, since the papers were sadly lacking in questions that might have teased out possible intrinsic motivation. That said I do agree that there is a lot of activity in the open source community that is fundamentally driven by intrinsic motivations.

So later I got to poking around on the net looking at usages of the term. “Intrinsic motivation” is certainly less popular with the hard science crowd and more popular with the more empathetic crowd. Presumably Teresa is working to fix that.

What I was seeking was to put some meat on the bones of that term. What exactly is an intrinsic motivation? Well the obvious answer is (in the negative) is not external.

• Forced serving of another.
• Decided service of another.
• Attitudinal service.

The last choice is certainly more intrinsically motivated than the first.

Or we might look for an enumeration of different kinds of intrinsic motivations; here’s a nice, but very incomplete (for example artistic motivations are missing), list.

• Principled protection
• Supportive assistance
• Instructive Investigator
• Practical Advisor
• Charitable Sponsor
• Organizing Director
• Merciful Empathizer

Both those lists are taken from here, a firm that sells one of those personality-profiling services that are so popular in magazines. They sell them to companies, presumably as a way stir the pot. Such things are fun if you treat them lightly.

What’s interesting about those lists is how they harken back to the religious ideas of a “calling.” Now that is sure to drive economists crazy. Of course we could call it lock-in.

“Ambiguity and heterogeneity, rather than planning and self-interest, are the raw materials from which powerful states and persons are constructed.”  – Padgett and Ansell