• Skip to main content
  • Skip to header right navigation
  • Skip to site footer
Farnam Street Logo

Farnam Street

Mastering the best of what other people have already figured out

  • Articles
  • Newsletter
  • Podcast
  • Books
  • Courses
  • Log In
  • Become a Member

Incentives

Better Thinking & Incentives: Lessons From Shakespeare

At Farnam Street, we aim to master the best of what other people have figured out. Not surprisingly, it’s quite a lot. The past is full of useful lessons that have much to teach us. Sometimes, we just …

Continue readingBetter Thinking & Incentives: Lessons From Shakespeare

Solve Problems Before They Happen by Developing an “Inner Sense of Captaincy”

Too often we reward people who solve problems while ignoring those who prevent them in the first place. This incentivizes creating problems. According to poet David Whyte, the key to taking initiative …

Continue readingSolve Problems Before They Happen by Developing an “Inner Sense of Captaincy”

The Code of Hammurabi: The Best Rule To Manage Risk

Almost 4,000 years ago, King Hammurabi of Babylon, Mesopotamia, laid out one of the first sets of laws. Hammurabi’s Code is among the oldest translatable writings. It consists of 282 laws, most …

Continue readingThe Code of Hammurabi: The Best Rule To Manage Risk

The Power of Incentives: The Hidden Forces That Shape Behavior

Incentives are what drive human behavior. Understanding incentives is the key to understanding people. Conversely, failing to recognize the importance of incentives often leads us to make major …

Continue readingThe Power of Incentives: The Hidden Forces That Shape Behavior

Under One Roof: What Can we Learn from the Mayo Clinic?

The Mayo Clinic is one of the top-rated hospitals in the US and enjoys remarkable success. In this post, we consider the reasons for the Mayo Clinic’s success and what we can learn from it to apply to …

Continue readingUnder One Roof: What Can we Learn from the Mayo Clinic?

Moving the Finish Line: The Goal Gradient Hypothesis

Imagine a sprinter running an Olympic race. He’s competing in the 1600 meter run. The first two laps he runs at a steady but hard pace, trying to keep himself consistently near the head, or at least …

Continue readingMoving the Finish Line: The Goal Gradient Hypothesis

Choosing your Choice Architect(ure)

“Nothing will ever be attempted if all possible objections must first be overcome.” — Samuel Johnson *** In the book Nudge by Richard Thaler and Cass Sunstein they coin the terms ‘Choice …

Continue readingChoosing your Choice Architect(ure)

Daniel Pink on Incentives and the Two Types of Motivation

There are two types of motivation: intrinsic and extrinsic. Both are very different and lead to disparate outcomes. Here’s how to make the most of motivation, both for yourself and others. *** …

Continue readingDaniel Pink on Incentives and the Two Types of Motivation

Incentives Gone Wrong: Cobras, Severed Hands, and Shea Butter

Incentives drive our behavior. Failing to consider incentives can lead to unintended consequences. In this post, we show you how incentives can go wrong and how we can use them to our advantage. *** …

Continue readingIncentives Gone Wrong: Cobras, Severed Hands, and Shea Butter

The Distorting Power of Incentives

“The rabbit runs faster than the fox, because the rabbit is running for his life while the fox is only running for his dinner.” — R. Dawkins *** Simply put, incentives matter a lot. …

Continue readingThe Distorting Power of Incentives

Creating Effective Incentive Systems: Ken Iverson on the Principles that Unleash Human Potential

The issue of setting compensation seems to be struggled with in every organization. Most are pretty lazy about it — hiring someone else to take care of it and failing to think through the incentives …

Continue readingCreating Effective Incentive Systems: Ken Iverson on the Principles that Unleash Human Potential

Dan Ariely on How and Why We Cheat

We all like to think of ourselves as honest, but there are inevitably certain situations in which we’re more likely to cheat. There are many things that make us less honest, like feeling disconnected …

Continue readingDan Ariely on How and Why We Cheat

The Four Types of Relationships and the Reputational Cue Ball

The single most important principle in biology is sustainability. In fact, it’s so important, that it means everything. Nothing matters if you can’t pass the test of time. When human …

Continue readingThe Four Types of Relationships and the Reputational Cue Ball

The Tension Created By Stretch Goals

It’s one thing to set big stretch goals. It’s another thing entirely to acknowledge the tension and incentives they create within an organization. Charlie Munger, speaking at the 2000 …

Continue readingThe Tension Created By Stretch Goals

Frederick W. Taylor: Time Management Skills

“There is no question that the tendency of the average man (in all walks of life) is toward working at a slow, easy gait, and that it is only after a good deal of thought and observation on his …

Continue readingFrederick W. Taylor: Time Management Skills

34 Insights From Nassim Taleb

Nassim Taleb, the author of The Black Swan and Antifragile: Things That Gain from Disorder with 34 insights from his facebook account: The artificial gives us hangovers, the natural inverse-hangovers. …

Continue reading34 Insights From Nassim Taleb
See older articles →

Discover What You’re Missing

Get the weekly email full of actionable ideas and insights you can use at work and home.


As seen on:

Forbes logo
New York Times logo
Wall Street Journal logo
The Economist logo
Financial Times logo
Farnam Street Logo

© 2023 Farnam Street Media Inc. All Rights Reserved.
Proudly powered by WordPress. Hosted by Pressable. See our Privacy Policy.

  • Speaking
  • Sponsorship
  • About
  • Support
  • Education

We’re Syrus Partners.
We buy amazing businesses.


Farnam Street participates in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising commissions by linking to Amazon.