Clans and Tribes: Incentive for good

Tribal human

People used to group together into clans and tribes for millennia, mostly for shared resources and protection against dangerous animals, humans and times. Over time such organisations got less and less important in our daily lives, and depending on culture and historical circumstances, has often disappeared all together.

Clans used to be couple of extended families grouped together, each family having several dozen members. Families might have shared ancestry in the past, maybe it was just bigger extended family split into several families. Or maybe some families could have formed a clan by intermarriage.

And tribe used to be several clans sharing same culture, ancestry, religion. After tribe grew too big, more than thousand members, it could also split in several related entities.

Modern nation states, after hundreds of years of feudal oppression and then few more centuries of industrialisation have pretty much destroyed those entities. Now state is protecting us, each of us can make living good enough for food (more often, than not) and there is not much need to bond together to create a hunting party.

So, we are all by ourselves, with nearest family close by and extended family further than 1st cousins stays pretty much unknown.

Not!

During recent times, word "tribalism" has often been heard with negative connotation. Like in Iraq or Afghanistan, some tribes fight against rule of government, or that there are deadly blood feuds between tribes, or that corruption and nepotism is in the record highs due to clans sticking to their own.

Somehow, in Europe, only places where I have heard clans mentioned, are Scotland, with its harmless rituals, and Italian Mafia clans, with their not so harmless line of work. In England, Sweden, Austria or Switzerland there are no such thing, yet "tribalism" is still considered something evil. Why? I am not sure - it might be because of old rivalry between nation state and its interests, and interests of tribes and clans. Regardless, one can hardly imagine such issues in modern Frankfurt or Krakow.

Yet people still like the idea. It provides warm feeling of belonging to the group, being protected, not being alone against the universe. I have always wanted to be part of the group. During teenage years in school, during university, when I set to conquer internet for first time, when I joined club of interests for first time. Lots of love for bonding myself with others. 

Also, I have noticed that when reading Fantasy or Science fiction books, I always like and enjoy a lot that heroes have clans and structures they protect until their last breath, swear allegiance to and act all honourably no matter what happens. 

Something just draws me to that, even if such set-up is impractical,  not easy to set up, and bound to create hard to solve problems.

Idea for modern society

So, lot of reasons why we might love clans and lots of fair reasons of why we do not have any.

Could we use this concept to our advantage, while keeping all the potential issues locked away for good?

Yes - why not. There are lot of times when we could use helping hand and feeling of belonging to a group, without that deteriorating into feuding, bribery and general rot. And sometimes government also could use the fact that there are groups of people who stick together. 

And no, I am not talking about collective punishments there  - that would be very very bad, and such government would not live too long. My idea is exactly opposite, but with the same effects. 

Lets create collective incentives, based on clan. Clan could be 3-4 extended families tied together, either randomly by government, or by their own choice, or by some clever mix of the both, that makes things nice, clean and even. In any way, if we have group of people, not bigger than two hundred, I would say - it has to be comprehensible and has to feel real for average person, then we as a government, can set some quite easily achievable targets for whole group and then reward the clan with some tax break or another. 

For example, it is very important for our collective safety, that everyone has been vaccinated for all the preventable diseases - even small percentage of population who has not, can create huge risk for everyone. So, we can set a target for a clan, that if over 97% of clan members of appropriate age have been vaccinated, then clan receives discount on family doctor fees for next five years. Such a scheme might actually pay for itself, as vaccinated people would have to visit doctor less often anyway. And collective pressure - imagine if 20% of your clan are old ladies for whom such fees are very important - will shoot vaccination levels sky-high with no extra effort from government. All the money booked for 'social advertising' could be spent elsewhere. 

Let me give you several more ideas. For example, education, if at least 90% of clan who are of age from 19 to 65 have finished high school, then everyone trying to enroll into state university, will have slightly better chance of enrolling. Or slightly smaller school fee. Or a bit better deal when getting student loan. 

Or, for example, if everyone of age from 18 to 65, are either in school/university, has a job (including being businessman and paying salary to themselves) or has registered in state unemployment agency and shows up for trainings/job interviews/etc - then all the clan pensioners get 105% pension and all the toddlers have slightly better chance to get into state kindergartens. Imagine peer pressure to pay taxes, seek job and keep thyself in school! 

And of course, if that was hard to achieve in previous days and ages, then now, in 21st century, there can be simple page in internet, connected to your favourite social network, that would show achievable targets and (personalised) benefits that you as a member of a clan would receive, if achieved.  And list of people who has or has not performed/complied with said target.

And of course, if you are loner, like to live in the forest and hate everyone - you can opt out of such schemes. Of course, if there are no taxes incoming from you, then state might get more suspicious of you than others.

Bigbrotheresque issues of course are valid concern. And state should not invent more information to gather from people, and should not increase pressure in any other ways and of course - never should do collective punishment. Government already has tons of targets on what consensus is there - those are then prime candidates for usage within  this paradigm. And yes, state most likely already has all the data mentioned above - it just needs to be put together and used appropriately.

Time limited virtual shares

Pros and cons of profit-sharing

I, like many more people before myself, have often pondered about benefits of profit-sharing schemes within corporation. In theory various option packages could give some more incentive, but given the fact that I work in old and large company, not some startup, there would be limited possibility of those options growing into something huge. And of course, as company has very large amount of employees - my share would be exceptionally small.

Also, as I am just one of thousands of people working for the company, and I am not in very high up position, my influence to general profits and therefore share value, would be very very small. So, I would not feel much correlation between my work and extra benefit of being a shareholder.

If there would be any other profit-sharing scheme, then result would be similar - person working in supporting, IT, Network or Accounting department, would be too detached from actual business decisions to feel that his work is directly influencing the company profit in any meaningful way.

Also, sometimes my feelings as an employee, could completely contradict those that shareholder would feel. For example - if large corporation would decide to cut the workforce of marketing department by half, thus making extra savings and keeping company leaner - then shareholder might get happier and stock value could increase by couple of percent points. On the other hand, for employee of marketing department, it would seem that he has to do extra work (if he is not fired), and as he owns so little amount shares, then any increase in their value would be barely noticeable - thus forcing that person to fight against the change.

Or, for example, if company would decide to move some of its operations overseas, employees would not like it, even if companies profit (including their profit sharing part) would rise. There would be no productivity gain by having profit sharing agreement in those scenarios. In fact, option packages for employees might even become problem in a longer term - as that would mean that people working longer in the company would have more stock than new hires, even if their contribution to bottom line is far lower. That would reward loyalty over merit, and while it could be beneficial for particular employee, for company as a whole it would surely be bad.

Outsourcing as an answer

On the other end of the scale for the company is outsourcing the whole sectors of its work to side companies, while keeping only profit generating departments in-house. In such scenario, profit-sharing schemes might work, as only those people who directly impact the income, would be affected, while all supporting functions are outsourced under contracts with strict SLAs.

Problem with this way of doing business, is that in a longer term, all knowledge of supporting functions stays outside the company, processes are harder to change and multiple vendors become harder and harder to control and there is a premium to be paid for vendor profit margin as well. And of course, people employed by vendor do not feel any connection to client-company profit at all, so all productivity boosting is solely in the hands of vendor management.

Those are two extremes of strategies company could have, with most companies being somewhere in the middle. But 'in the middle' only regarding amount of profit-sharing and outsourcing used, not in the sense of ideas they have employed.

So, how could we put those to extremes together to create some median version to gain productivity and stay competitive; and have all that both short and long term?

Idea

My answer is something you could call "time limited sub-shareholding". Lets take IT department of an medium sized company - it has around 80 people, it has a budget, it has a plan for changes for a year ahead, it has a top manager.

Lets take this department and turn it into virtual company with virtual shares. And virtual profit. All while keeping every single employee/asset/contract as a part of original corporation.

I bet, that many people (Myself included) have often thought about some improvements that could be done to their daily work tasks, environment, assets, software, etc; but could not be bothered, as that would hardly give themselves some direct benefit - more often than not, it would temporarily bring more hassle and more work, to result in long term benefits for the company. Long term benefits for an employee are usually lot less predictable and are along the lines 'will see when we decide yearly salary increase' or 'will take that into account when handing out quarterly bonus'. And often even less.

So, lets take planned yearly budget and give every dollar that is saved directly to employees themselves, at the end of the year. Make figures public and predictable. And keep your promises.

Lets give our example IT department 80 employees, average salary with taxes €70'000, yearly office costs €128'000, software license costs €1'500'000 per year, various vendor support costs  €800'000 per year, amortization and depreciation for hardware and other equipment - €500'000.
It is very simple approximation of our theoretical costs  - but keep in mind, that every organisation does such a budgeting for departments anyway. And hopefully the fore casted budget breaks even.

With this budget of around 7,2 million, it becomes interesting to see what happens if we could cut lets say 20% off of it, each employee could cash in almost €18'000, which is a lot of money for an person who earns €70'000 a year. For a company of course there will be no difference - it will still have to pay 7,2M.

Lets dig in deeper on how to make this work. Obviously if this virtual company with savings shared between employees would last only for one year, then it would be hard to ensure that long term goals are achieved as well. Employees could just decide to do something stupid for a short term gain, without any thought of long term health of say IT system. Other problem would be that changes in staffing would be problematic, if everyone is a stakeholder. Also, new investments for longer term plans would not work well, if not especially catered for.

Answer to first issue would be extension of benefit gained. For example, if, in above example, we see that everyone who has helped to cut 20% of expenses will get 18'000 after year has ended  - we could easily extend this benefit for sub-sequential years as well. If benefits stay as-is and no problems arise because of cuts. Lets say, that people would continue to receive monetary bonus every year for five years, each year twice as small as the year when costs were saved. First year, 18'000 second year 9'000, third year 4,500, fourth year 2250, fifth year 1125, sixth year 562. Good incentive to keep medium term planning good. And if costs start to go up again, benefits are stopped.
Company would start gaining from second year, but it would still be better than no productivity gains at all.

Nice touch would be, that virtual company would exist only in some years, not all the time. So, we have it for one year - everyone involved makes boosts the productivity as much as possible, gets the bonus and start waiting for sub-sequential bonuses. At the same time, virtual company is dissolved, and it becomes department again. Top management then can state, that if department has survived this experiment in a good shape, and for next two years everything works very good, they will repeat the virtualisation. That will give incentive for people who participated in the first round, and also for people who have joined company afterwards and thus do not have previous incentives to look forward to. Of course, planning needs to be clever - so people do not start amassing unnecessary things in their budgets, so they would have something to cut, afterwards.

So, please comment the idea, if you find it interesting. Also, comment if you have constructive criticism.
Btw, if this idea has been described somewhere else already, it would be interesting to read that.