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Creating Behavior Change In Business Can Be A Pic-Nic

Consciously affecting changes in a business, as they are intended, is one of the most challenging and important responsibilities for executives and managers. Change is occurring in our world more quickly than ever and leaders are having to deal variables and rates of change never before experienced. In this context, I’ve found it useful to have simple foundational tools, that work with the reality of how our human brains work, to consciously guide people in our businesses to respond in ways that are consistent with the company’s mission and values.

PIC/NIC is the name of a behavioral system model developed by Aubrey Daniels International that helps to understand the reasons people do what they do or what they may do in response to rewards.

I can’t count the number of times I've seen or heard of sophisticated companies implementing expensive performance programs only to find that they were paying large amounts of money to reduce the effectiveness of their organization. This occurred as a result of unintentionally motivating negative behavors in their employees by attaching incentives to the wrong metrics. Unintended consequences occurred that were counter to the overall mission of the business because the leadership did not anticipate alternative courses employees might take to achieve the intended result. Using the PIC/NIC model managers can support a proactive system that examines behavioral consequences of proposed metrics and related incentives and then acts on such knowledge to achieve the result intended.

The method is called PIC-NIC or PIC/NIC because the acronym somewhat describes the three classifications of the consequences to the behavior: P = Positive, I = Immediate, C = Certain and N = Negative. You can strengthen or weaken behaviors with positive and negative rewards, respectively that have both immediate and certain consequences. Positive, immediate, and certain consequences (PICs), are the most powerful consequences that can be used to strengthen desired behaviors. Negative, immediate, and certain consequences (NICs) are the most powerful consequences that can be used to weaken behaviors. The model can be summarized along three dimensions as follows:

Type:

  • Positive consequences or rewards are effective for strengthening behaviors

  • Negative consequences will weaken undesired behaviors

Timing:

  • Immediate consequences or rewards that are affected while behaviors are occurring are most effective. They also require frequent monitoring of the underlying measurements and behaviors thereby promoting quick and responsive course correction. This often requires improving the company’s information systems to accurately capture and analyze data and report the required information.

  • Versus future consequences where there is too long of a delay in the mind of the person following the behavior are less or ineffective

Probability:

  • Highly certain consequences or rewards that always follow behaviors are effective while

  • Versus uncertain consequences which may or may not follow the behavior are less or ineffective.

If the consequence or reward to a behavior is delayed or does not happen consistently the reward or consequence will not be very effective and the behaviour is less likely to change or occur. So, when implementing any reward system – whether it be for safety, environmental initiatives or operational business goals, consider which behaviours you wish to strengthen and weaken and develop immediate and certain positive or negative rewards respectively.

For example, I’ve seen that providing an annual bonus based on higher production resulted in much greater output but also much more low quality product that required rework, thereby reducing the overall profits of the business. And partly because of how infrequently rework and other key measures of performance were monitored, reported and rewarded, this was allowed to continue for the entire year. The next year behaviors metrics and ralated systems were modified to produce results in greater alignment with the business’ mission and values. Conrols in the quality system were improved to limit behaviours that resulted in low quality product (Notice I did not say reworked product – unless mitigating contols were put in place, a reward for less reworked product could be achieved by simply misclassifying product). Additionally, the measurement and reward system was fine-tuned to provide positive, relatively immediate (weekly) and certain rewards that were valued by the production teams. These included recognition in a competitive “pool”-style format that was posted daily company-wide, company paid dinners with spouses given weekly, and financial rewards added to their bi-weekly pay deposits. Rewards were based on the daily ratio of quality product produced relative to total cost of production. Additionally, this was measured in the context of required capital investments to maintain long-term quality and a daily variability gate to promote consistency. For some time after implementation, all production data was monitored and shared transparently as frequently as possible to determine if there were any unintended consequences.

Influencing others is tricky business and fraught with issues yet it also occurs through everything we do. Internal change management, sales, marketing, finance or business development, the Pic/Nic method can be a useful tool to influence people consciously or unconsciously. Doing so consciously for me means being transparent and clear in developing and communicating the rewards and consequences, timing and conditions. It means ensuring the right energy is behind the initiative in the first place and being open to those affected about the reasons for the program. It should not feel like manipulation or that there are hidden agendas. Rather, it should be seen by those affected as recognizing the motivators / drivers that are meaningful them with rewards and consequences consistent with their and the company’s values and mission.

If you'd like to learn more about consciously affecting behaviors of your employees, suppliers, customers and others involved in the success of your business I welcome you to contact me to discuss your situation.

About Rob Pilz

A senior executive, including former CFO, of public and private companies, I have more than 20 years experience building, optimizing and financing businesses ranging from Fortune 500s to Deloitte Technology Fast 50TMs. With a talent for bringing out the best in leaders and an expertise in creating leverage, I am constantly looking for ways to improve the odds of business success and passionate about building businesses that are humanly and organizationally sustainable. To do so I’ve developed a process combining intuition and reason to make better faster decisions that I call Zero Point Decision MakingTM. I welcome your questions or comments at my website www.robpilz.com, to my email address at rob@robpilz.com or phone U.S. 646-480-0507, Canada 604-722-5361.

Related reading:

An article on PIC/NIC from Aubrey Daniels applied to safety, Understanding At-Risk Behavior

Blog article applied to children by Paul McGuire, Rewards and punishments – it’s all a PIC/NIC

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