Monday, October 13, 2014

Do Not Kiss the Cobra.

Incentive programs are just as
 misinformed as kissing a cobra.
As a leader you are faced with countless decisions.  One of those decisions is how you create constructive incentives for your team.  This week on the blog I would like to talk about one of the most dangerous traps you can get into as a budding leader.  The Cobra Effect.

The cobra effect is documented around the internet but in short is a classic example of the rule of unintended consequences.  Simply put, when you put an incentive out to guide the behavior of co-workers or subordinates you will find they will game the system to maximize the incentive for their own personal interests.  This was documented when the English ruled India as a colony.  A local governor offered a bounty to reduce the number of cobras in the city of Delhi.  It worked too well and the locals started breading cobras to kill them and collect the reward.  This bit of capitalism got the governor to cancel the bounty.  In response, the cobra breeders released their worthless snakes out onto the streets.  The net effect was an increase in the cobra population of Delhi.

As a scrum master or leader you can run into the cobra effect at any time.  For instance, if you want to increase the velocity of a team the team members could inflate their estimates making it look like they are doing more work than actually doing it.  My favorite example comes from the comic Dilbert where the pointy haired boss offers to provide bonuses for developers who fix bugs.  The developers use this as an incentive to write buggy software to increase their compensation.  

The short answer is that incentives are not a good tool for improving performance.  People will change their behavior temporarily in order to meet the incentive goals and then when the incentive goes away they will switch back.  This means that developers and business people will take shortcuts instead of doing the job the way it is supposed to be done.  Long range goals are sacrificed for short term incentive gains.  I also feel that quality suffers.  

So when coming up with incentives for your development team and business, take a pause and understand that you are inviting a snakebite from the Cobra effect.  

Until next time.