#3775: Systems ALWAYS Get "Gamed"

0:00Power presence calibration is not a program. It does not solve anything. It does not motivate. It measures drift. And it corrects or it doesn't. That's all. The reference is down below. A lot of people think success comes from one breakthrough. More often, it comes from better decisions made consistently over time. That's why I send out my daily game email every morning. One lesson on the mental game leadership, discipline and professional execution that compounds over time. It's completely free. Join at work on my game dot com. That's work on my game dot com. When people are building, destroying, deciding on and designing systems is all things that you gotta keep in mind. The people who get in there, you'll find out people are smarter than you think they are. We start offering them incentives and consequences. They all lay down. Work on your game. Work on your game.

1:04This is Dre Baldwin and work on your game. This is a system that turns discipline into dominance. Today's topic is systems always get gained. Now every rule, every process, every measurement that is put in place to achieve a certain outcome or to help optimize a certain outcome or to construct certain things to happen only or to stop other things from happening. That's the reason why we put rules in place. Not because there's no other way for that thing to happen, but because we want that thing to happen over and over and over again consistently or we want something to not happen consistently. We want something not happen at all. We don't want people to throw that trash on the ground. So we create rules for throwing the trash in the trash can. But we don't want people to bring their dogs to the pool. So we create rules for not bringing the dogs to the pool. So sometimes we create rules to get something we want or we create rules to block something that we don't want. This is what systems do. And systems usually work exactly as intended when people just follow the system exactly as it is laid out. What usually happens, however, is eventually people start figuring out, well, how can I beat the system? How can I go against the system? Not because people have malicious intent by nature, but because human beings are looking to conserve energy can serve time and basically serve themselves and usually the rules and processes are designed to serve whoever created the rules and not designed to serve the system.

2:21The rules and not designed to create the people who are forced to abide by the rules. So this is where the gaming comes in and tech rose sometimes people call this hacking and sometimes the hacking is done in an ethical way. Let me show you how this system can be broken so you can fix it so that doesn't happen past the system up. Sometimes the hacking is done nefariously. Hey, we're going to figure out a way to break into the system against making it easier for ourselves to not have to follow rules because it takes less energy, less resources or to get something for ourselves dishonestly that we otherwise wouldn't have gotten. This is why systems end up getting gained and everybody will always try to gain a system once it is put in place why because we're human and is what human beings do that we will go against a system simply because following the system. Usually, well, not usually sometimes we'll put us in a log jam because everybody's following the system. So now we're at the back of the line. So some people will naturally try to find a way to jump to the front of the line without standing around like everybody else. You see people do this at bars and night clubs, how do I go straight to the front set of standing on I want to stand in line. There are times that someone who is driving said to stop now to stop some and just roll right through the stop sign instead of running the pedestrians cross.

3:27So just speed up so that they can get by before the pedestrians go by so they don't have to stop at all. They'll drive in the bike lane when it allows them to get around traffic so they can make their turn sooner than everybody else. People do this kind of stuff all the time. That's gaming the system and people want to do that because again most human beings are selfish. We focus on what benefits us rather than what benefits the whole even on small things were cutting corners and we are committing what they will call a victim with crime. We're not really hurting anybody when we do it, but at the same time we're not following the system and some people can see that and get annoyed. I'm giving you the example many times how I'm in a building at the pool here in the southward and I'll see somebody violating the rule and then by waiting the rule is not hurting me or getting in my way in any way, but I'm just noticing that they're doing it and what it trips off to me is that other people will do the same thing. They don't follow that role. They won't follow other rules and then eventually we end up with some level of anarchy, hopefully not too much coming on the quality of the people.

4:28But the point here is that smart leaders understanding this inevitability of human nature and systems, you don't just build the system. You anticipate how people are going to try to exploit the system because everybody will try to exploit the system. So you have to have a system of checks and balances in your system so that when people try to go around the system and they try to circumvent the process, you catch them and they're circumvention and when they're out of line, you put them right back in line. How do you do this? That's the topic today point number one today's topic once again systems always get gained number one. People optimize for the measurement not the mission. This is what happens when you put systems in place. There was a, I don't know if this was a real story or not, but I've heard it told more than once that there was a system in I believe was a town in India and the big issue there was they were having problems with snakes and there were these snakes that people are really not liking having around they had snakes around the same way we have squirrels and birds they had snakes.

5:35So what the government did is they put out a bounty on snakes they said hey if you bring in a snake arrive or dead, we will give you a certain amount of money so people started bringing in the snakes and able collect the money from the government government said this program is going to get into a bunch of people getting rid of the snakes. What happened though over time is that the government started to be overrun with people bringing in arrived or dead snakes and government started getting suspicious like we knew we had a snake issue we know we had this many snakes going around in our country or in our town. And when they did some inspection they came to find out what happened is people started breeding snakes and then killing them and bringing them into the government just to collect the money they were not finding the stray snakes that were the actual problem that the government was trying to solve what they were doing was gaming the system by let me just breed a snake and get the money from the government so the system had been gained and away the government had not anticipated when they initially created the program in the first place because again people are optimizing for the measurement which is bringing a snake get the money.

6:35That was the measurement the mission was we don't want stray snakes going around town bothering everybody the people didn't care about the mission what people cared about was the measurement so this is why whenever you create a system you have to ask yourself some second and third order questions okay this is the mission but what are people going to see is they're going to see the measurement so based on the measurement is this system designed in a way that it actually serves the mission sometimes the measurement does not serve the mission the measurement serves the person but there's a way for you to serve the measurement while not serving the mission at all that's why you got to be careful about how you design your systems because again you can start with all the positive intentions was what the local government did when they came up with this idea in the first place but it did not serve mission they had to make adjustments so whatever gets measured ways the gentleman is what gets pursued remember people don't do it to expect they do it to inspect the expectation was we're gonna get rid of the stray snakes but what was being inspected was not the reduction in stray snakes was being they were not going to see the reduction in the

7:35inspect it was if you bring in a snake will give you some money well the government wasn't asking where the snake come from did you breed the snake did you find the snake how did you get the snake government wasn't asking that and that's the reason why people were able to gain the system so there was a hole in the system that is not a negative reflection on the people that's a positive reflection on the people is just shows that they're smart and they're thinking the negative reflection is on the system itself is not even only government just a system how to hold in it and until the lab tests met with real life you didn't realize that the system had a hole in it and sometimes you have to deploy your system before you find out what the problem is this is the reason why you get people to come and test your stuff before you send it out into the real world and you find out you have some real problems now that you got to pay for because you didn't see what you should have saw before you put this out to the world so if the metric becomes more important than the objective people will maximize scoring the metric while minimizing the real work and again the real work maybe all the way over here whereas the metric

8:35is all the way over there your job as a system creator or the enforcer of systems is to make sure that the system is designed in such a way that even if a person decides to chase the metric and chasing the metric they still serve the mission and if they are serving the mission they should also be rewarded because in serving the mission there should be a way the system shows that they are also hitting a reward triggering metric that's what the best systems do it does both at the same time. time. You do this to help yourself and while helping yourself, you're also helping us. The best systems are able to solve both problems at the same time. And it sounds like a simple thing, but anybody who's ever designed a system or any type of rules or measurement, you know it is much more easier said than none. But once you get it right, solves a lot of problems. Point number two, today's topic once again, systems always get gained. Number two, every incentive creates new behavior. All right, you've heard me talk about this several times before. Human beings respond to incentives and consequences and nothing more. If you want

9:40to get a response out of a human being, offer them an incentive, which is something positive that they want or a consequence, something negative that they wish to avoid. That is how every human being operates every single day, every minute of their eyes. We respond to those two things at all times. When people wake up in the morning, their alarm clock's going off, they may be tired. They didn't get as much sleep as they wanted to get. They would rather stay in bed for another hour or two. Why did they get out of bed anyway? They get out of bed anyway, either because they are incentivized, looking forward to something that they get to do when they get out of bed or they are avoiding consequence, trying to stay away from a negative thing that would occur if they don't get out of bed and do what they need to do. Like, go to work or like, I'm going to Disney World today. So let me get up so I can make it on time to get to the part when it opens. So let me get up even on tired or let me get up even on tired because I want to get fired from my job and I need to pay check. Intentives and consequences. And every time you introduce a new incentive, you are creating a new behavior. And sensives will naturally create behaviors because people will respond to those incentives.

10:41Now you just need to decide what incentives do I need to put in place? What carrots do I need to dangle in front of what person in order to produce what outcome? So you got three variables to solve for here. The first X or you remember being in algebra class, you had to solve for X. Now here you got three X's. Number one is the variable. That's the incentive. Number two is the subject. That's the person who is going to have the incentive introduced to them. And then number three is what I want them to do. Once you get those three filled out properly in a way that works. Well, now you got to win you formula or at least you think you do until you see real world meeting lab tests. And again, sometimes when a real world meets the lab tests, things change. You learn things that you otherwise will not have learned. And this is the reason why you test out stuff again before you deploy it fully. So well-intentioned rules often can produce unintended actions. This is the example that I gave you earlier. Government says, I bring in a snake and we'll give you some money. That incentivizes the people to get involved in ridding the town

11:44of the stray snakes. But it also produced unintended actions, which is just breed a snake and bring it in to collect the money because all people cared about was the money and not the mission of the snakes. People cared about getting rid of the snakes. They cared even more about collecting that money. So as soon as people understand any reward structure that is put in place, many people will adapt their behavior to benefit from the reward structure than to fulfill the purpose of whatever the job happens to be. And the reward structure again, sometimes it can be connected to the purpose of the overall mission of the organization. Sometimes it's loosely connected, sometimes it's strongly connected. The best systems are strongly connected. And when you do one, you are automatically serving the other. And in others, when it is too poorly connected or not connected well at all, you end up with a poorly operating system that even when operated properly is not producing the desired outcome. You're going to end up with disgruntled people operating within that system because the system is supposed to be helping me out, but it's not really helping me out.

12:47You can throw your jokes in there about the United States government because they're a great example of a system that is in place. And it is allegedly designed to be for the people and by the people who isn't up what the founding fathers said by the people and for the people. Well, does the government feel like it's working that way? I think most of you, whether you're richer or poor, employed, unemployed, under employed, male, female, black, white, I think almost all of us would agree that the answer is no. It's not even though it is a system. It is in place. It is very big. It's been around for a long time. It's a system working the way it is supposed to be working. I don't get out and get what your political leaning is or if you even have one, all of us would answer pretty much. No, it doesn't. This is what I mean. When people understand a reward structure, they will adapt their behavior to benefit from the structure rather than to fulfill the purpose of the structure. Let's use the example that I'll just point out. The United States government is designed to be by the people and for the people. Well, is the government by the people? Technically, yes. Technically, any one of us can run for office and join the government on some level, whether

13:52local city level, state level, federal level and the people who are there are technically, if you look at the people you see on TV who work in the government, Congress, and Supreme Court, the judicial system, or the executive branch, we can agree that they are human. At least we think they are. At least they appear to be human on some levels and in many levels, they appear not to be. Are they doing things that are by the people before the people? I don't think so. What do you think? I don't think so. This could be Democrat or Republican. I've talked about this many times in talking about the government in the United States of America that the government is designed. The first of all, you had to be a liar to even win office in the first place. And secondly, you had to be a liar to keep your office because you got to tell people half truths about what's actually going on because if you told the people, the masses, the actual truth about what was going on, you would not satisfy enough people to win your next election. So you had to tell them half truth, the part that they want to hear and leave out the part that is true, but they don't want to hear because if you tell them part that's true, they don't want to hear, they're going to go against you and they're going to vote for the person who tells them only the half part that they want to hear and that becomes the game in and of itself. And then you as a

14:55voter, you as a constituent, you go vote for the candidate who you think is going to do something for you then again, the office and they claim to be doing stuff for you. But most of the stuff they're doing is much more serving either them personally, their political party was allows them to keep their jobs or the people who were putting money in their pockets, which is not you. It is the donors and the lobbyists who are knowing around the swamp called Washington DC, at least the political part of Washington DC. This is a system, again, that has incentives in place, some of which you know about, many of which you don't know about as an everyday citizen that creates certain behaviors from people that seem inexplicable to you. The answer is usually when we're talking about something like the government, very simple answer, follow the money. Now that's the innocent. The incentive is not serve the people. Most of you are probably not naive enough to still think that, but if you're under the age of 25, listen to me right now, you may be under the false impression that the people who work in the government, the federal level, especially in Washington DC, are there to serve you, the people, they're not there to serve you. They're there to follow the money because following the

15:55money is how they get and keep their job. They lose their jobs. They can't serve you anyway. So they got to do things to get the money and they can rationalize my saying, well, I got to do this stuff to get the money because if I don't get the money, I can't keep my job and I can't even look like I'm helping the people, even though they're never really helping people in the first place. Somebody gets there and they decide they actually want to help the people. They're going to learn very quickly that you can't help the people. If you can't get enough other people to agree with you and you can't get them to agree with you, if you're not on the same page as them, what's means you got to do some of the stuff that they're doing, what's that is nothing to do with serving the people. Again, this is what happens when you get big organizations with a lot of them in the senses, some of which are hidden, some of which are public, and you got to learn how to play the game. It becomes a tricky thing. So when people are building, destroying, deciding on and designing systems, these are all things that you got to keep in mind. The people who get in there, you'll find out people are smarter than you think they are. We start offering them in sensives and consequences. Some people recalibrate before things drift. Others wait for feedback. They can't undo. Power presence calibration exists for the first group. It is not designed to be welcoming.

17:00The location is listed below in the description. Point number three, today's topic once again, systems always get gained. Number three, systems must continuously evolve. And this is what I was just talking about. Speaking of the United States government, that's a system that has not continuously evolved. And actually, it is best words to describe what's happened with the United States government from the time of the founding fathers to now is devolved. It is going backwards. System that got worse is gotten bigger and bloated. The government was not supposed to be that. It has introduced a financial incentive when it wasn't supposed to be that supposed to be people volunteering their time to serve as a they were doing public service and serving the people. Now you can do a full-time career for 50 years. Bernie Sanders, Joe Biden, Nancy Pelosi, quote unquote, serving the people. When you can't name much to any of these people have done actually serve anyone. They've done a lot to serve themselves, but not to serve others. And when systems don't evolve over time, people learn to gain the systems. They set the system

18:02up so that they can continue gaming it. They can allow their friends and family, quote unquote, to continue gaming the system. And everybody else gets screwed in the process. All the while, they're putting on a show of serving you where you can't point to anything tangible that they've actually achieved to serve you besides talk. Interestingly enough, right? That fine people who've been the government of long time show me what they've actually tangibly done to help you. Not what they said, what they tangibly, tangibly achieved. And or you could probably come up with the reasons they gave for why they have not tangibly achieved anything. What's again, is an effective part of the system. That's how it works. So a system that never changes eventually becomes predictable. It becomes bloated. It becomes outdated. It gets gained to the furthest extent by people who were smart and know how to gain that system. They try to keep the system as it is. You come in there trying to change the system. You'll see what they do to you. Donald Trump, whether you like them or not, one thing we can agree in 2016, when he came into politics, he made it clear that he was going to try to change the system. What was he saying in 2016? Drain the swamp. When he said, Drain the

19:05swamp, what was he saying? He was saying to bloated bureaucratic system. The United States government is not working. I'm going to come in and change things. And a bunch of people got strongly against him, not because his mean tweets, not because he was a Republican, not because racism or anything else you want to say about Donald Trump, the circus levels up. Main reason he has so many detractors when Donald Trump first got into politics on the left and the right he had detractors was because he said he was going to drain the swamp. IE, I'm going to evolve the system that these swamp animals are swimming in. And I'm going to make it harder for them to keep gaming the system. And a bunch of people said, oh hell no, we're not letting this do stop us from gaming the system. That's why he has so much opposition, why he still has so much opposition to this very day. Even though he, one thing I think a lot of people even on a political right can say over the last 10 years, Donald Trump has become more part of the system. He became part of the swamp more to he even drank the swamp. But that's a different conversation for a different day. The whole point is when you come into a firmly entrenched system and announce you're going to change things up, you

20:07going to find out why that system is firmly entrenched. It's not because you're the first person who came up with the idea of doing something about it. Elon Musk, he got the same thing. Notice he got his ass out of politics real quick. He was in there for a while and he said, okay, let me go back to go back to putting rockets in the space and putting communities on Mars and building electric cars. That's much easier than anything over there happening in DC. He learned his lesson real quick. Now you saw what he did, right? Donald Trump, he's going to get out of there and you saw what almost happened to him. All right, he almost was freedom. He almost lost his life trying to change the system that is firmly entrenched. This is what happens when you don't allow systems to evolve or the rats take over the building. All right, effective leaders regularly audit, refine and strengthen their systems to keep them aligned with the outcome they were designed to produce. This is what an effective leader has to do. So those of you who wish to step into leadership roles or those of you who are already in leadership roles understand that your job is ongoing. This is one of your ongoing jobs

21:07that you got to continually watch the system and make sure the system is actually doing what it's supposed to do. And the system is not the people. The system is the set of roles, parameters and instructions that tell the people what to do and the system should be instructing them to do things that lead to the outcomes that you want and it leads to people getting what they want. If your system is doing both of those and go check, but understand this because it's doing it today does not mean it will still be working next week because things change. People change. Incentives change. So you have to stay on top of all of that stuff. And whatever that outcome is, this is supposed to be produced. You're the one being held accountable for it because you're the leader. Keep that in mind to recap in today's class, which is systems always get gained or at least people will try. Number one, metrics can replace the mission. So make sure the metrics are aligned with the mission. That's what the best systems do. Number two, incentives, shape, behavior, and expected and unexpected ways. So always ask yourself if I was a person on the outside looking in of this system that you've created. And I wanted to game the system just to get the reward in a way that

22:10might not serve the mission, but with that bit, you should ask yourself that question because there's probably an answer and you need to adjust for that possibility before you deploy your system. And number three, great systems are maintained, not merely built. You put a system in place and just leave it there. It becomes the United States government final thought. The question isn't whether people will game your system or of course they're going to game your system. Question is whether you'll recognize the gaming at a system before the system starts producing the results that you want it and you get fired because your system is not working. But that's what the bottom line of what happens is the irony of it all work on your game. Dre all day. High performers don't need more information. They need tighter execution. ERI that's the execution reliability index measures how often you actually follow through when it matters. If you're serious about results, go to workonyourgame.com slash ERI. That's workonyourgame.com slash ERI.