Many of our US readers are likely familiar with this rat.
For those who aren’t, Chuck E. Cheese is a chain of family entertainment/restaurants. It is part arcade, part restaurant and part carnival. Started in the late 70s, it became a go to place for kids in the 80s and 90s.
Nolan Bushnell, the company’s co-founder & Atari founder, recalled an incentive gone wrong in the interview above:
“A Chuck E. Cheese manager came up with the idea of cutting costs by incentivizing the parents and kids to clean up their own tables.
What he thought of was he created this great big coin slot that you could roll the pizza tins in. And get a token back. And we thought smart. One of our characters was Mr. Munch and put a fan in and it would suck a napkin from your hand. He’d say ‘Yum Yum. Love paper’.
Everything was fine except the fact that if you happened to turn around and not watch your pizza tray, the kids would come over and steal your pizza tins and leave your pizza right on the table. Which was one of those things that you try for a little while and it was just a nightmare. It was a great idea, but not.”
Chuck E. Cheese created a perverse incentive. The company incentivized kids to steal. But the company handled the situation the right way. The manager wasn’t fired for coming up with what turned out to be a bad idea. Instead, Nolan Bushnell used the incident, and others, as an opportunity to demonstrate one of their core values - It’s okay to make mistakes. Nolan described:
“I went to a flea market and there was a tin turkey that was about this tall (2.5 feet tall). It was ungodly ugly. I mean it was really bad and I thought hmmm. What I wanted to do was let people know that it was okay to try something and fail at it. So we had a management dinner every quarter where you would talk about what was happening with the company. It was funny because when you get over 1,000 employees it’s really had to keep everybody on the same page. You don’t get a chance to talk to everybody. These dinners were an important way to communicate core values. And one of the core values was if you try something for all the right reasons and it still fails, that is okay. I didn’t want my employees to start feeling guilty about something. You want to get things cathartically removed. So I thought the turkey award would be a good thing. The fun was the nominations for the turkey award. It was a way to say John really did a turkey over here.”
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