Our motivations
are unbelievably interesting. I’ve been working on this
for a few years and I find the topic still
amazingly engaging and interesting, so I want to tell you about that. The science is really surprising.
It’s a little bit freaky! We are not as endlessly manipulable and as predictable
as you would think. There’s a whole set
of unbelievably interesting studies. I want to give you two
that call into question this idea that if you reward something, you
get more of the behaviour you want and if you punish something
you get less of it. Let’s go from London to the mean
streets of Cambridge, Massachusetts, in the northeast
of the United States, and talk about a study at MIT – Massachusetts Institute
of Technology. They took a whole group of students
and gave them a set of challenges. Things like… ..They gave them these challenges
and, to incentivise performance, they gave them
three levels of reward. If you did pretty well,
you got a small monetary reward. If you did medium well,
you got a medium monetary reward. If you were
one of the top performers, you got a large cash prize. We’ve seen this movie before. This is a typical motivation scheme
within organisations. We reward the very top performers.
We ignore the low performers. Folks in the middle,
OK, you get a little bit. So what happens? They do the test.
They have these incentives. Here’s what they found out. As long as the task involved
only mechanical skill, bonuses worked
as they would be expected. The higher the pay, the better
the performance. That makes sense. But here’s what happened. Once the task called for
even rudimentary cognitive skill, a larger reward
led to poorer performance. This is strange.
How can that possibly be? What’s interesting is that these
folks who did this are economists, two at MIT, one at University
of Chicago, one at Carnegie Mellon, the top tier
of the economics profession. They’re reaching this conclusion
that seems contrary to what a lot of us learned
in economics – the higher the reward,
the better the performance. They’re saying that once you get
above rudimentary cognitive skill, it’s the other way around. The idea that these rewards
don’t work that way seems vaguely left-wing
and socialist, doesn’t it? It’s a weird socialist conspiracy. For those of you
who have those conspiracy theories, I want to point out the notoriously
left-wing socialist group that financed the research –
the Federal Reserve Bank. This is the mainstream of the
mainstream coming to a conclusion that seems to defy
the laws of behavioural physics. This is strange, so what do they do? They say, “This is freaky.
Let’s test it somewhere else. “Maybe that $50, $60 prize “isn’t sufficiently motivating
for an MIT student! “Let’s go to a place where $50
is more significant, relatively. “We’re going to go to Madurai,
rural India, “where $50, $60 is actually
a significant sum of money.” They replicated the experiment
in India, roughly as follows. Small rewards –
the equivalent of two weeks’ salary. I mean, sorry, low performance –
two weeks’ salary. Medium performance –
a month’s salary. High performance –
two months’ salary. Those are real good incentives.
You’ll get a different result here. What happened was that
the people offered the medium reward did no better than the people
offered the small reward. This time around, the people offered
the top reward did worst of all. Higher incentives led
to worse performance. What’s interesting is
that it isn’t that anomalous. This has been replicated over
and over again by psychologists, by sociologists and by economists –
over and over and over again. For simple, straightforward tasks, “if you do this, then you get that”,
they’re great! For tasks that are algorithmic, a set of rules you have to follow
and get a right answer, “if then” rewards,
carrot and stick, outstanding! But when a task gets
more complicated, when it requires conceptual,
creative thinking, those kinds of motivators
demonstrably don’t work. Fact – money is a motivator at work,
but in a slightly strange way. If you don’t pay people enough,
they won’t be motivated. There’s another paradox here. The best use of money as a motivator is to pay people enough to take
the issue of money off the table, so they’re not thinking about money,
they’re thinking about the work. Once you do that, there are three
factors that the science shows lead to better performance, not
to mention personal satisfaction – autonomy, mastery and purpose. Autonomy is our desire to be
self-directed, direct our own lives. In many ways, traditional notions
of management run foul of that. Management is great
if you want compliance. If you want engagement, which is
what we want in the workforce today, as people are doing
more sophisticated things, self-direction is better. Let me give you some examples of almost radical forms
of self-direction in the workplace that lead to good results. Let’s start with Atlassian,
an Australian software company. They do something really cool. Once a quarter on a Thursday,
they say to their developers, “For the next 24 hours,
you can work on anything you want, “the way you want,
with whomever you want. “All we ask is that you show
the results to the company “in this fun meeting –
not a star chamber session, “but with beer and cake and fun
and things like that.” It turns out that that one day
of pure, undiluted autonomy has led to a whole array of fixes
for existing software, a whole array of ideas
for new products that otherwise would never emerge –
one day. This is not the sort of thing
that I would have done before I knew this research. I would have said,
“You want people to be innovative? “Give them a frickin’
innovation bonus. “If you do something cool,
I’ll give you $2,500.” They’re saying, “You probably want
to do something interesting. “Let me get out of your way.” One day of autonomy produces things
that had never emerged. Let’s talk about mastery –
our urge to get better at stuff. We like to get better at stuff. This is why people play musical
instruments on the weekend. These people are acting in ways
that seem irrational economically. They play musical instruments? Why? It’s not going to get them a mate
or make them any money. Cos it’s fun. Cos you get better
at it and that’s satisfying. I imagine that if I went
to my first economics professor, a woman named Mary Alice Shulman, and I went to her in 1983 and said, “Professor Shulman,
can I talk to you after class? “I got this idea for a business
model and I want to run it past you. “Here’s how it would work. “You get a bunch of people around
the world who do highly skilled work “but they’re willing to do it
for free “and volunteer their time – 20,
sometimes 30 hours a week.” She’s looking somewhat
sceptically there. “But I’m not done! “Then what they create, they give
it away rather than sell it. “It’s gonna be huge!”
(LAUGHTER) She would have thought I was insane. It seems to fly in the face of
so many things, but you have Linux powering one out of four corporate
servers in Fortune 500 companies, Apache powering more than the
majority of web servers, Wikipedia. What’s going on?
Why are people doing this? Many are technically sophisticated,
highly skilled people who have jobs. OK? They have jobs!
They’re working at jobs for pay, doing sophisticated
technological work. And yet, during their limited
discretionary time, they do equally, if not more,
technically sophisticated work, not for their employer,
but for someone else for free. That’s a strange economic behaviour.
Economists have looked into it. “Why are you doing this?”
It’s overwhelmingly clear – challenge and mastery, along with
making a contribution, that’s it. What you see more and more
is the rise of the “purpose motive”. More and more organisations want
some kind of transcendent purpose. Partly because it makes
coming to work better, partly because that’s the way
to get better talent. What we’re seeing now is when the profit motive becomes
unmoored from the purpose motive, bad things happen. Ethically sometimes, but also
bad things, like “not good stuff”! Like crappy products. Like lame services. Like uninspiring places to work. When the profit motive is paramount or when it becomes completely
unhitched from the purpose motive, people don’t do great things. More and more organisations
are realising this, disturbing the categories between
what’s profit and what’s purpose. I think that actually heralds
something interesting. The companies that are flourishing –
profit, not-for-profit or somewhere in between –
are animated by this purpose motive. Let me give you some examples. The founder of Skype says,
“Our goal is to be disruptive, “but in the cause of making
the world a better place.” Pretty good purpose.
Here’s Steve Jobs. “I want to put a ding
in the universe.” That’s the kind of thing that might
get you up, racing to go to work. I think we are purpose maximisers,
not only profit maximisers. I think the science shows that
we care about mastery very deeply and that we want
to be self-directed. I think that the big take-away here is that if we start treating people
like people, not assuming
that they’re simply horses – slower, smaller,
better smelling horses – if we get past the ideology
of carrot and stick and look at the science, we can build organisations and
work lives that make us better off. They also have the promise to make
our world just a little bit better.