The Power of Incentives for Radio & Records

By Jerry Del Colliano

You're asking, okay Jerry -- if Lew Dickey is really screwing up at Cumulus right now making it the Worst Radio Group -- tell me how he could do better.

Or at least, how I can avoid being like Cumulus.


The good news is that there is a better way to motivate, stimulate and operate -- a fairer way that would ensure that the radio industry would be up to the challenge of new technology and changing generational needs.

This morning, I'd like to share with you the "Power of Incentives" inspired by Dan Pink, author of books on changing the world of work.

I'll be narrating these points as I look at the decaying radio and music industries and I believe you'll do as I did -- come away with a better understanding of what went wrong and what it will take to make it right again.

Is that positive enough?

For Pink it all comes down to three words -




Pink can obviously prove that what Dickey Do, his brethren John Slogan Hogan and Fagreed Suleman are calling management is really mismanagement.

But you may be surprised by the solution. You may come away with a different view on how to manage, budget and motivate even if the three biggest consolidators in radio do not.

1. Research shows that it takes three and a half minutes longer to solve a problem with incentives. That's right. Dickey is right and everyone else is wrong, right? Not quite. The research Dan Pink cites shows that these traditionally known incentives did not work as well as no incentive at all (Cumulus, Clear Channel, Citadel) because they are contingent.

2. Carrots and sticks may have worked in the past -- although there is a carrot shortage at the three biggest consolidators -- but today they not only don't work but do great harm. Is that possible? Can an incentive-based approach actually be worse than a Dickey-based approach?

3. Traditional rewards may still work where there is a clear set of rules and a clear destination, but such an approach tends to narrow our focus and restrict our possibilities.

4. Most problems don't have a single set of rules or a single solution. Teach in college labs as I have done and it doesn't take 20 minutes to see that you can't impose rules and restrictions on the next generation. Try it at your own peril. Therefore "If-Then" rewards no longer work. See, Dickey Do is way ahead of his time. Stop mocking him.

5. Once a task calls for "even a rudimentary cognitive skill", a larger reward led to a poorer performance. That's what MIT, Carnegie Mellon and The University of Chicago discovered in this research sponsored by The U.S. Federal Reserve. In eight of nine tasks examined across three experiments, higher incentives led to worse performance. Even the prestigious London School of Economics weighed in: "we find that financial incentives can result in a negative impact on overall performance."

I know what you're thinking, where's all that good news you promised us?
The new approach is based on doing things workers like and desire because they are interesting and important
Isn't that the way it used to be in radio before it consolidated, adopted Wall Street's management policies and killed off individual incentives?

I don't know about you but I was not overpaid as a program director. I wasn't even adequately paid. But the general manager rarely came into my office -- let me do what I wanted and sure as hell still held me responsible. Most times he heard contests, promotions after they went on-the-air and new air personalities after I hired them.

Could it be that we had it closer to right before our Harvard grads like Dickey came along because if we are to believe Dan Pink, the new consolidators need to get back to old school quickly.
Autonomy, mastery and purpose are the three new benchmarks of worker productivity and happiness
Paying people an adequate wage that remove the money issues that plague workers is only step one. Then, even though it may appear counter-intuitive to today's managers, you turn them loose and give them autonomy. Freedom to make their own schedules, to work on other things outside their own area of expertise.

Imagine giving a programming person time to fool with sales presentations or new types of sponsorships, or promotions or even what type of work environment the station could adopt.

Radio had the future in its hands.

The so-called Results Only Work Environment -- no schedules, show up when they want or if at all as long as they got the work done.

What good program director doesn't want to be out in the community listening to the station she or he creates and inspires (at least, before consolidation)?

Mastery means the desire to get better at something that matters.

Do you know any programmers, sales manager, account execs, talent, support staff or almost extinct engineers who don't want to make the radio station better? Same for the record industry? Their bosses sop up the bonuses and over-the-top compensation while I could name a handful of record execs with great ideas that actually could make an impact while cooperating with the inevitable -- technology and sociology.

Purpose is a yearning to do what we do in the service of something larger than ourselves.

Every time I hear of a long suffering radio survivor proceeding to do public service in the community after putting up with low pay and abuse at work I get more proof of what I already know -- that radio and record industry people yearn for something larger than themselves.

So even though the Dickeys, Hogans and Sulemans don't offer much in the line of incentives, we now learn that if they did it probably wouldn't matter.

Of course, if they offered autonomy, mastery and purpose perhaps they wouldn't be months away from bankruptcy.

Radio and records had it right. Their Wall Street inspired consolidators got it all wrong.

Knowing the difference? Priceless.

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