Rethinking our outdated assumptions about motivation and performance

Management leads to compliance, but only self-direction leads to engagement.

There are many reasons for the things we do. We have biological urges (eating, drinking, sex). Another ‘drive' is our ability to respond to rewards and punishment (incentives). And, Dan Pink, former chief speechwriter for former US vice-president Al Gore and author of Drive: The Surprising Truth About What Motivates Us, argues we have a third major ‘drive': we seek out novelty and challenges, to extend and exercise capacities, to explore and to learn. Why else would we play musical instruments during the weekend (mastery) and quit high-paying jobs to take new jobs that are less lucrative but more meaningful.

Pink, reports:

If we reward the behaviour we seek, and punish the behaviour we dislike, individuals will perform at a high level and their organisations will flourish. Or so the theory goes. In the 19th and 20th century, that approach – enacted in businesses large and small on both sides of the Atlantic – had a sturdy logic. Indeed, it works quite well when people are doing relatively simple, routine, rule-based work, whether this involves turning a screw on an assembly line or processing paper in an office.

Trouble is, that kind of work has largely disappeared in western Europe and North America. In the 21st century, most white-collar workers do jobs that require at least some non-routine, heuristic, creative, conceptual capabilities. And a half-century of research in behavioural science, carried out in laboratories and field experiments around the world, shows that for this sort of work, the approach we use with donkeys – carrots and sticks – is rarely effective and sometimes harmful.

For all the talk about interest rates, regulatory reform and other macroeconomic policies, the best way to escape from our début-de-siècle economic mess may be to listen to the science and rethink our outdated assumptions about motivation and performance.

Imagine it’s 1995. You sit down with an economist – say, an accomplished strategy professor at the London Business School or Oxford University’s Said School. You say to her: “I’ve got a crystal ball here that can peer 15 years into the future. I’d like to test your forecasting powers.”

She’s sceptical, but she decides to humour you.
“I’m going to describe two new encyclopedias: one just out, the other to be launched in a few years. You have to predict which will be more successful in 2010.”
“Bring it on,” she says.

“The first encyclopedia comes from the American company Microsoft. As you know, Microsoft is already a large and profitable concern. And with this year’s introduction of Windows 95, it’s about to become an era-defining colossus. Microsoft will fund this encyclopedia. It will pay professional writers and editors to craft articles on thousands of topics. Well-compensated managers will oversee the project to ensure that it’s completed on budget and on time. Then Microsoft will sell the encyclopedia on CD-ROMs and, later, online.

“The second encyclopedia won’t come from a company. It will be created by tens of thousands of people who write and edit articles for fun. These hobbyists won’t need any special qualifications to participate. Nobody will be paid a pound, a franc or a yen to write or edit articles. Participants will have to contribute their labour – sometimes 20 and 30 hours a week – for free. The encyclopedia itself, which will exist online, will also be free to use.

“Now think forward 15 years,” you continue. “According to my crystal ball, in 2010, one of these encyclopedias will be the largest and most popular in the world and the other will be defunct. Which is which?”

In 1995, I doubt you could have a found a single sober economist in the UK or elsewhere who would not have picked that first model as the success. Sure, that ragtag band of volunteers might produce something. But there was no way its product could compete with an offering from a powerful, profit-driven company. The incentives were all wrong. Microsoft stood to gain from the success of its product. Everyone involved in the other project knew from the outset that success would earn them nothing. They weren’t even being paid! In fact, it probably cost them money each time they performed free work instead of remunerative labour. The question was such a no-brainer that our economist wouldn’t even have considered putting it on an exam for her MBA class.

But you know how things turned out. On 31 October 2009, Microsoft pulled the plug on MSN Encarta, its disc and online encyclopedia, which had been on the market for 16 years. Meanwhile, Wikipedia – the second model – ended up becoming the largest and most popular encyclopedia in the world. Just eight years after its inception, it had more than 13 million articles in some 260 languages, including three million in English alone.

What happened? The conventional view of business motivation – the one that says it’s all about the second drive – has a very hard time explaining this result. But if we look at what happened with fresh eyes, the result seems explicable, if not inevitable.

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