November 9th, 2009

Motivation – 1 way that Conventional Business Wisdom is Wrong

Business Insights -

Businesses do not correctly motivate their employees. Let me put some constraints on that statement; businesses in the U.S.A whose employees need to use creativity to do their jobs well (i.e. in the majority of them) do not motivate their employees correctly.

This conclusion hit my smack in my face 4 days ago. Here’s the story.

Every week Net Impact holds a conference titled ‘Issues in Depth’ for its members to enjoy. If you’ve never heard of Net Impact, you should check them out.

The ‘Issues in Depth’ call consists of a prominent business person presenting information on a certain topic that speaks to how businesses are addressing the many social and environmental issues we face.

Last month was my first call. The presenter was a man named Chip Conley, I’ll admit it, I’d never heard of him before the call.

Chip is founder of Joie de Vivre Hospitality, which is California’s largest boutique hotel group and is the recent author of ‘PEAK: How Great Companies Get Their Mofo from Maslow’.

Let me make it clear, this post is not a book review. Honestly, at first Chip’s discussion was not really impressive to me, in the sense that he didn’t seem to speak to anything I hadn’t heard before from school, case studies, magazines, you name it.

‘Fulfilled’ Organizations

Chip made a series of points that argued that companies as well as individuals can be ‘fulfilled’ as Maslow called it, and that more ‘fulfilled’ companies are more productive. Duh! He demonstrated how ‘fulfilled’ companies are comprised of ‘fulfilled’ stakeholders; employees, customers, and investors, and gave examples of how each of these stakeholders acts at each step toward fulfillment. Below is a sample Maslow hierarchy, and then an example of a customer hierarchy.

Picture 1

Picture 2

Again, nothing new, this is why I wasn’t impressed.

However, after a simple reflection on the discussion I realized that it was NOT the logic of his statement, that fulfilled groups will be more productive, but the discussion of HOW to get each group to the top that was important.

How Organizations Reach Their PEAK

His last point in particular really stuck with me. It goes something like this ‘conventional business wisdom is wrong’. What about conventional business you might ask. Chip focused on how businesses motivate their stakeholders to move them up Maslow’s pyramid. Chip concludes that in order to bring an organization to ‘PEAK’ performance,  money is not the most important item and other motivators must be used.  He gave three examples:

  1. Money isn’t the primary motivator for employees
  2. Customers don’t stay loyal when purely “satisfied”
  3. Many investors have needs beyond ROI.

From an employee perspective, I couldn’t agree with him more. I have never hated my job because I wasn’t being paid, it was due to other things like my boss was a jerk.

For the past couple of weeks I’ve been searching for information other then my own personal experiences to validate or refute his point.

Last week I stumbled on a TED video that hit the nail on the head.

If you have 18 minutes, watch the whole thing, its a great discussion and he explains very eloquently the disconect between what social science knows about motivation and how businesses try to motivate.

Why Conventional Business is Wrong

Conventional business wisdom would use money to increase production in order bring organizations to PEAK performance. However, Daniel Pink finds something completely different. In a nutshell, extrinsic motivators that incentivize based on performance only function well for right brain tasks, tasks that are linear and the inputs, outputs and goals are known, such as basic accounting, factory line workers, and basic computer programming jobs. However, extrinsic motivation actually decreases output in more left brain tasks, tasks that require any sort of creativity.

The central problem is that most white collar workers in Asia, Europe, and the US primarily have left brain tasks but are rewarded with a left brain structure, the result is WORSE production.

With these incentives it is no wonder that most organizations are not ‘fulfilled’ and functioning at their PEAK as Chip Conley puts it.

I’d have one piece of advice for you, be careful about the business techniques you learn if you’re going to business college to be a manger, getting your MBA, and most importantly attending an online MBA program.

So what?

The main benefit to working in clean technology is the intrinsic motivation is clearly available, we’re saving the world after all. This is a very powerful tool for motivating employees, investors, and customers and I’ve noticed that some organizations focus on this point more then others. More organizations need to use this to engage their customers, employees and investors.

Also, the conclusion has many implications for entrepreneurs looking to create a culture, and people looking for jobs.

From a company perspective, it’s important to get an understanding of what peoples’ intrinsic motivators are, because they will always be different.

If you looking for a job this should be very important for you and you should think about it a lot. What sort of culture do you want? Remember there is a huge difference between the stated culture and the informal culture of an organization. Most importantly, how will you screen companies to find a culture that fits or not. What sort of questions and cues do you look for?

This is one of the most important things that I focus on when I’m doing research and interviewing looking to work with a company. I relied that I will be more happy and productive in environments that have intrinsic motivators that match what I’m looking for. Some of the typical questions I ask are:

  • What is the culture around the work life balance?
  • Do you work to live or live to work?
  • Is your job fun?

I have found these questions are especially important for recent college graduates as lot of pressure is put on them to get a high paying  job, when they may not be the best decision. Most of my friends who took this route now hate their jobs and their lives.

Do you agree?

Have you ever had a job  you hated? Was it because you were not being paid enough or another reason?

I’m curious to learn about people who have experiences with companies that only use extrinsic motivators or companies that have developed more intrinsic motivators.

When you are looking to work for a company how important is the work environment and culture?

If you are or have been in a management position, do you agree with Daniel Pink and Chip Conley’s statements? How do you utilize extrinsic vs. intrinsic motivators?

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Chris Williams

About Chris Williams

Chris Williams is the editor of Green Light Distrikt and Chief Marketing Officer at HeatSpring . He has experience in business development, prototyping and new venture research with a focus on geothermal heat pumps, solar thermal and solar photovoltaic technologies. Chris is an IGSHPA accredited geothermal installer and NABCEP certified solar installer. Chris is focused on solving customer facing issues in the creation and adoption of clean energy technologies and products. Chris has installed over 300kW of solar and tens of geothermal systems. He's invented the PV Pal , developed many trainings at HeatSpring, publishes the NABCEP Study Guide , the Hitchhikers Guide to Cleantech and has done due diligence research for Urgent VC . Feel free to connect with him @topherwiliams , on Linkedin , or through email about new ventures, collaborating, writing, research or whatever is on your mind.

  • Jesse Tolz

    Just shout out “I’m Saving The World!” and you’ll see how amazing that feels. Isn’t that right Chris? Especially if you say it when you’re hyper-miling in a prius you’re carsitting…

    My question is, had you really never thought of alignment with beliefs/passions and lifestyles as the most fundamental creator of faithful evangelists? Or, was it just how Dan Pink and Chip Conley illustrated said inspiration of stakeholders? I’m guessing you just liked listening to someone else tell you what you already knew. Yes, this is definitely a very valuable nugget of knowledge.