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Single Payer Health Care Pros And Cons
i need to make a confessionat the outset here. a little over 20 years ago,i did something that i regret, something that i'm notparticularly proud of. something that, in many ways,i wish no one would ever know, but here i feel kind of obliged to reveal.
Single Payer Health Care Pros And Cons, (laughter) in the late 1980s, in a moment of youthful indiscretion, i went to law school.
in america, law is a professional degree: after your university degree,you go on to law school. when i got to law school, i didn't do very well. to put it mildly, i didn't do very well. i, in fact, graduated in the partof my law school class that made the top 90% possible. thank you. i never practiced law a day in my life;
i pretty much wasn't allowed to. but today, against my better judgment, against the advice of my own wife, i want to try to dust offsome of those legal skills -- what's left of those legal skills. i don't want to tell you a story. i want to make a case. i want to make a hard-headed, evidence-based,
dare i say lawyerly case, for rethinking how we run our businesses. so, ladies and gentlemen of the jury, take a look at this. this is called the candle problem. some of you might know it. it's created in 1945 by a psychologist named karl duncker. he created this experiment
that is used in many other experimentsin behavioral science. and here's how it works.suppose i'm the experimenter. i bring you into a room. i give you a candle,some thumbtacks and some matches. and i say to you, "your job is to attachthe candle to the wall so the wax doesn't drip onto the table." now what would you do? many people begin tryingto thumbtack the candle to the wall.
doesn't work. i saw somebodykind of make the motion over here -- some people have a great ideawhere they light the match, melt the side of the candle,try to adhere it to the wall. it's an awesome idea. doesn't work. and eventually, after five or ten minutes, most people figure out the solution, which you can see here. the key is to overcomewhat's called functional fixedness.
you look at that box and you see itonly as a receptacle for the tacks. but it can also have this other function, as a platform for the candle. the candle problem. i want to tell you about an experimentusing the candle problem, done by a scientist named sam glucksberg, who is now at princeton university, us, this shows the power of incentives. he gathered his participants and said:
"i'm going to time you, how quicklyyou can solve this problem." to one group he said, "i'm going to time you to establish norms, averages for how long it typically takessomeone to solve this sort of problem." to the second group he offered rewards. he said, "if you're in the top 25%of the fastest times, you get five dollars. if you're the fastest of everyonewe're testing here today, you get 20 dollars."
now this is several years ago,adjusted for inflation, it's a decent sum of moneyfor a few minutes of work. it's a nice motivator. question: how much faster did this groupsolve the problem? answer: it took them, on average,three and a half minutes longer. 3.5 min longer. this makes no sense, right?
i mean, i'm an american.i believe in free markets. that's not how it's supposedto work, right? if you want people to perform better,you reward them. right? bonuses, commissions,their own reality show. incentivize them. that's how business works. but that's not happening here. you've got an incentive designed to sharpen thinkingand accelerate creativity,
and it does just the opposite. it dulls thinking and blocks creativity. what's interesting about this experiment is that it's not an aberration. this has been replicatedover and over again for nearly 40 years. these contingent motivators -- if you do this, then you get that -- work in some circumstances.
but for a lot of tasks,they actually either don't work or, often, they do harm. this is one of the most robust findingsin social science, and also one of the most ignored. i spent the last couple of years looking at the scienceof human motivation, particularly the dynamicsof extrinsic motivators and intrinsic motivators. and i'm telling you, it's not even close.
if you look at the science,there is a mismatch between what science knows and what business does. what's alarming hereis that our business operating system -- think of the set of assumptionsand protocols beneath our businesses, how we motivate people,how we apply our human resources-- it's built entirelyaround these extrinsic motivators, around carrots and sticks. that's actually fine for many kindsof 20th century tasks.
but for 21st century tasks, that mechanistic,reward-and-punishment approach doesn't work, often doesn't work, and often does harm. let me show you. glucksberg did another similar experiment, he presented the problemin a slightly different way, like this up here.
attach the candle to the wallso the wax doesn't drip onto the table. same deal. you: we're timing for norms. you: we're incentivizing. what happened this time? this time, the incentivized groupkicked the other group's butt. why? because when the tacks are out of the box, it's pretty easy isn't it? if-then rewards work really wellfor those sorts of tasks,
where there is a simple set of rules and a clear destination to go to. rewards, by their very nature, narrow our focus, concentrate the mind; that's why they work in so many cases. so, for tasks like this, a narrow focus, where you just seethe goal right there, zoom straight ahead to it, they work really well.
but for the real candle problem, you don't want to be looking like this. the solution is on the periphery.you want to be looking around. that reward actually narrows our focus and restricts our possibility. let me tell you why this is so important. in western europe, in many parts of asia, in north america, in australia,
white-collar workers are doingless of this kind of work, and more of this kind of work. that routine, rule-based,left-brain work -- certain kinds of accounting,financial analysis, computer programming -- has become fairly easy to outsource, fairly easy to automate. software can do it faster. low-cost providers can do it cheaper.
so what really matters are the more right-brainedcreative, conceptual kinds of abilities. think about your own work. are the problems that you face, or even the problemswe've been talking about here, do they have a clear set of rules, and a single solution? no. the rules are mystifying. the solution, if it exists at all,
is surprising and not obvious. everybody in this room is dealing with their own versionof the candle problem. and for candle problems of any kind, in any field, those if-then rewards, the things around which we've builtso many of our businesses, don't work! it makes me crazy.
and here's the thing. this is not a feeling. okay? i'm a lawyer;i don't believe in feelings. this is not a philosophy. i'm an american;i don't believe in philosophy. this is a fact -- or, as we say in my hometownof washington, d.c., a true fact. (applause)
let me give you an example. let me marshal the evidence here. i'm not telling a story,i'm making a case. ladies and gentlemenof the jury, some evidence: dan ariely, one of the greateconomists of our time, he and three colleaguesdid a study of some mit students. they gave these mitstudents a bunch of games, games that involved creativity, and motor skills, and concentration.
and the offered them, for performance, three levels of rewards: small reward, medium reward,large reward. if you do really wellyou get the large reward, on down. what happened? as long as the taskinvolved only mechanical skill bonuses worked as they would be expected: the higher the pay,the better the performance. okay?
but once the task calledfor even rudimentary cognitive skill, a larger reward led to poorer performance. then they said, "let's see if there's anycultural bias here. let's go to madurai, india and test it." standard of living is lower. in madurai, a reward that is modestin north american standards, is more meaningful there. same deal. a bunch of games,three levels of rewards.
what happens? people offered the medium level of rewards did no better than peopleoffered the small rewards. but this time,people offered the highest rewards, they did the worst of all. in eight of the nine tasks we examinedacross three experiments, higher incentives ledto worse performance. is this some kind of touchy-feelysocialist conspiracy going on here? no, these are economists from mit,
from carnegie mellon,from the university of chicago. do you know who sponsored this research? the federal reserve bankof the united states. that's the american experience. let's go across the pondto the london school of economics, lse, london school of economics, alma mater of elevennobel laureates in economics. training ground for greateconomic thinkers like george soros, and friedrich hayek,
and mick jagger. last month, just last month, economists at lse looked at 51 studies of pay-for-performance plans,inside of companies. here's what they said: "we find that financial incentives can result in a negative impacton overall performance." there is a mismatchbetween what science knows
and what worries me,as we stand here in the rubble of the economic collapse, is that too many organizationsare making their decisions, their policies about talent and people, based on assumptions that are outdated, unexamined, and rooted more in folklorethan in science. and if we really want to getout of this economic mess, if we really want high performance
on those definitional tasksof the 21st century, the solution is not to domore of the wrong things, to entice people with a sweeter carrot, or threaten them with a sharper stick. we need a whole new approach. the good news is that the scientists who've been studying motivationhave given us this new approach. it's built much morearound intrinsic motivation. around the desire to do thingsbecause they matter,
because we like it, they're interesting,or part of something important. and to my mind, that new operatingsystem for our businesses revolves around three elements: autonomy, mastery and purpose. autonomy: the urgeto direct our own lives. mastery: the desire to get betterand better at something that matters. purpose: the yearning to do what we do in the service of somethinglarger than ourselves. these are the building blocksof an entirely new operating system
for our businesses. i want to talk today only about autonomy. in the 20th century, we came upwith this idea of management. management did not emanate from nature. management is not a tree,it's a television set. somebody invented it. it doesn't meanit's going to work forever. management is great. traditional notionsof management are great
if you want compliance. but if you want engagement,self-direction works better. some examples of some kindof radical notions of self-direction. you don't see a lot of it, but you see the first stirringsof something really interesting going on, what it means is paying people adequatelyand fairly, absolutely -- getting the issue of money off the table, and then giving people lots of autonomy. some examples.
how many of you have heardof the company atlassian? it looks like less than half. atlassian is an australiansoftware company. and they do something incredibly cool. a few times a yearthey tell their engineers, "go for the next 24 hoursand work on anything you want, as long as it's not partof your regular job. work on anything you want." engineers use this time to come upwith a cool patch for code,
come up with an elegant hack. then they present all of the stuffthat they've developed to their teammates,to the rest of the company, in this wild and woolly all-hands meetingat the end of the day. being australians, everybody has a beer. they call them fedex days. because you have to deliversomething overnight. it's pretty; not bad. it's a huge trademark violation,but it's pretty clever.
that one day of intense autonomy has produced a whole arrayof software fixes that might never have existed. it's worked so well that atlassianhas taken it to the next level with 20% time -- done, famously, at google -- where engineers can spend20% of their time working on anything they want. they have autonomy over their time,
their task, their team, their technique. radical amounts of autonomy. and at google, as many of you know, about half of the new productsin a typical year are birthed during that 20% time: things like gmail, orkut, google news. let me give you an even moreradical example of it: something called the results onlywork environment (the rowe), created by two american consultants,
in place at a dozen companiesaround north america. in a rowe people don't have schedules. they show up when they want. they don't have to be in the officeat a certain time, or any time. they just have to get their work done. how they do it, when they do it,where they do it, is totally up to them. meetings in these kindsof environments are optional. almost across the board, productivity goes up,worker engagement goes up,
worker satisfaction goes up,turnover goes down. autonomy, mastery and purpose, the building blocksof a new way of doing things. some of you might look at this and say, "hmm, that sounds nice, but it's utopian." and i say, "nope. i have proof." the mid-1990s, microsoft startedan encyclopedia called encarta. they had deployedall the right incentives,
they paid professionalsto write and edit thousands of articles. well-compensated managersoversaw the whole thing to make sure it came inon budget and on time. a few years later,another encyclopedia got started. different model, right? do it for fun. no one gets paid a cent,or a euro or a yen. do it because you like to do it. just 10 years ago,
if you had gone to an economist, anywhere, "hey, i've got these two differentmodels for creating an encyclopedia. if they went head to head, who would win?" 10 years ago you could nothave found a single sober economist anywhere on planet earth who would have predictedthe wikipedia model. this is the titanic battlebetween these two approaches. this is the ali-frazierof motivation, right? this is the thrilla in manila.
intrinsic motivatorsversus extrinsic motivators. versus carrot and sticks, and who wins? intrinsic motivation, autonomy, masteryand purpose, in a knockout. let me wrap up. there is a mismatch betweenwhat science knows and what business does. here is what science knows. one: those 20th century rewards, those motivators we thinkare a natural part of business, do work, but only in a surprisinglynarrow band of circumstances.
two: those if-then rewardsoften destroy creativity. three: the secret to high performanceisn't rewards and punishments, but that unseen intrinsic drive-- the drive to do things for their own sake. the drive to do things cause they matter. and here's the best part. we already know this. the science confirmswhat we know in our hearts. so, if we repair this mismatchbetween science and business,
if we bring our motivation,notions of motivation into the 21st century, if we get past this lazy,dangerous, ideology of carrots and sticks, we can strengthen our businesses, we can solve a lotof those candle problems, and maybe, maybe -- we can change the world. i rest my case.
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