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Sorry if some people thought I was a bit sniffy about TED last week (although I can’t quite bring myself to withdraw my ‘Britain’s Got Talent for rich hippies’ jibe’). Anyway, there were two brilliant speeches on the last morning which just about made it all worth while.

The first was a powerful, insightful and extremely funny talk by orchestral conductor turned consultant, Itay Talgam. He described various forms of leadership by pinpointing the particular styles of impresario conductors. In twenty minutes I learnt more about music and about leadership than from reading learned books on the subjects.

The second was one of those talks with an idea so strong you know you will be discussing it for months. The speaker was American ideas man Dan Pink. The idea, which is the subject of Pink’s forthcoming book, is that crude incentives (like big financial bonuses or example) damage performance in complex tasks.

One of the best pieces of evidence for this claim comes from the famous candle problem. In this exercise subjects are shown a picture of a table next to a wall. On the table is a candle, a book of matches and some drawing pins in a box. The task is to attach the candle to the wall over the table, light it, but not let it drip wax on the table.

On average it takes people about ten minutes to identify the solution. This is to take the drawing pins out of the box, pin the box to the wall, then stand the candle on the box so the wax drips on to it rather than the table. This requires the subjects to make the lateral leap of seeing that the box holding the pins is not just a receptacle for another object but an object in itself.

In this test those who are offered a cash prize for completion perform less well than those who are simply asked to solve it as quickly as they can. Fascinatingly, if the test is made easier - by taking the pins out of the box so it can be seen from the start as an object in play - then those offered incentives perform better than those not.

The candle problem is only piece of a mass of evidence for Pink’s core thesis. So, his speech raises two issues: not just the fact that performance in complex tasks is harmed by crude incentives, but the question why are so few people apparently aware of this powerful finding? After all its relevance to the financial meltdown is surely obvious. Big cash incentives help bankers with the simple task of making money out of a system of financial swaps but they don’t help them with the complex task of realising the system itself is built on sand.

Let’s phrase that question another way: why is it that powerful people in important jobs don’t want to discuss research showing that being given big rewards might damage their performance. The answer, of course, is in the question.


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