Threshold

Photo by Sara. Nel

Seth Godin describes 8 reasons to work:

1. For the money
2. To be challenged
3. For the pleasure/calling of doing the work
4. For the impact it makes on the world
5. For the reputation you build in the community
6. To solve interesting problems
7. To be part of a group and to experience the mission
8. To be appreciated

He then asks: “Why do we always focus on the first?”

I think it is the wrong question. We should focus on the first. The question is why do we only focus on the first?

Even the one of the most popular opponent for incentives in the way the business world usually uses them, Dan Pink, claims, in his book, Drive, that while autonomy, mastery and purpose is what really drives people, a prerequisite for that is that people are paid well. Preferably above the average pay.

I think we should think about this question as a threshold. In order to attract goof workers and demand excellence you need your pay to be reasonable. But above a certain point (which I don’t think is very high) more money does not equal better performance. To do that, you need at least one, if not more, of the rest of the items on the list.

By the way. This proposition is not mine. It belongs to the management scholar Herzberg. Here is how I described it in the past:

According to the Two-factor theory (also known as Herzberg’s motivation-hygiene theory) job satisfaction and job dissatisfaction act independently of each other. Two Factor Theory states that there are certain factors in the workplace that cause job satisfaction (Motivators, e.g. challenging work, recognition, responsibility which give positive satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth), while a separate set of factors cause dissatisfaction (Hygiene factors, e.g. status, job security, salary and fringe benefits, which do not give positive satisfaction, although dissatisfaction results from their absence. These are extrinsic to the work itself, and include aspects such as company policies, supervisory practices, or wages/salary).

Hygiene factors are things you need to make sure are present to reasonable degree. Otherwise, in many cases, the motivators will have almost no effect.

So, we should focus on money (and other hygiene factors). But we need to make sure they are good enough and focus on making the motivators extraordinary. Then, we raise the chances for the emergence of excellence.

Elad

When should a manager force employees to do things they don’t want to do?

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Dan Ariely wrote an interesting post about the Chilean pension system that mandates savings by all citizens. Not surprisingly, Ariely calls the post: “Want People to Save? Force Them”. This connects with an earlier post by Ariely (which I also wrote about) that discussed an experiment which showed  that by limiting the list of questions people could use to engage in a conversation, deeper and more meaningful conversations were brought to life.

These two posts got me thinking. In this blog I write a lot about rules in management and about how managers should let go of the mechanisms of control. I generally believe that the basic concepts Dan Pink presents in his book, Drive, of Autonomy, Mastery and Purpose are three of the most important tools managers have in their disposal.

At the same time, I do believe that sometimes, managers should force some processes on their employees. Just like people are bad at saving and need to be made to save, because in the longer-term it is better for them, there are things employees would not do and need a manager to force them. Engaging in more meaningful conversations is a great example. And if we can do that by designing the rules of the meeting differently (for example), this is an important tool that managers should use.

This is a very difficult conclusion for me as it goes against many of my personal beliefs about liberty and the importance of choice (more on this unrelated subject – see here). But I do believe that great leaders and managers know how to walk the line between allowing autonomy and forcing people to engage in some important paternalistic processes. I don’t have a complete list of these instances, but I am planning to start thinking more and more about this subject.

Any ideas? In what issues do you think managers should force employees to do things for their own long-term benefits?

Elad

Listening and not listening at the same time

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Dan Pink writes about a subject matter that I find important for every aspect of business and management (and politics). The concept of “listening to your customers”:

Give customers what they want.

It’s a sturdy principle of business, one that most of us endorse. But it’s also a principle that can carry seeds of its own demise.

Leadership and management are not a popularity contest. While listening to your clients, peers, employees etc. is not only important it is a must, knowing when to ignore them or do something they can’t even think about is just as important. As I wrote a few months ago:

I don’t know about you, but if a few years ago somebody would have asked me what do I want my cell phone to do, there is no way I would have said: “Oh, you know what, I want it to react to movements when I move it around so I can play games with it”. I don’t know it for a fact, but I think the people at apple just put that quality into the Iphone without people telling them that is what they want. And that is a one great quality for a product. That is a way to make it a purple cow.

It works with customers just as well as it works with employees. In all fields of life, the work of great change makers was first criticized, misunderstood and fought against. “Why the hell do we need that?” the critics ask. But the change makers are the ones that make an impact on our lives. This is the difference between incremental innovation and radical innovation. One improves on what you have; the other changes the rules of the game. As Henry Ford famously said: “If I have asked people what they wanted, they would have said: ‘a faster horse’”. This is how Pink summarizes it:

Enhancing a category is cool; creating a category is cooler. Providing people what they want is a smart tactic; giving people something they didn’t know they’re missing is an even smarter strategy. Listening to the customer can be helpful; listening to your own voice can be revolutionary.

Every word here can be applied to customer service, development of new products and more importantly, management of people. Listening to them is good. But giving them what they want is not always best. Like giving employees answers – they would want it, but it is not good for them. And this reminded me of what I was trying to say about effectiveness and efficiency:

What the definitions don’t tell us is the focus. Efficiency is about marginal improvements. We take the current situation and try to make it better. To make the most of what we have. To do better with what we have. And that is a very useful skill. But it rarely leads to huge leaps. And it rarely breaks the boarders and provides levels of performance we haven’t thought possible. Effectiveness, on the other hand is about change. Is about finding a better fit to our goal. It is making something work better, not in the margins, but in the core of its being. It is about finding the right solutions to the right questions. If you make something more effective, you are changing the way it works, re-inventing it (maybe a bit more similar to term Efficacious). And you are focused on the long-term effects.

Everybody will tell you that you should listen to your customers. But everybody tells you to do that, everybody else is doing it too. Why don’t you try to listen to them, but not listen to them at the same time? Now that is something special.

Elad

Gain segregation in management

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In the last few weeks I have been studying about Daniel Kahneman and Amos Tversky famous Prospect Theory. This theory has many applications and many interpretations. One of the most important of these interpretations is that losses loom larger than gains. Meaning, all else being equal losing something will hurt us more than winning the same amount (when I say amount it is not necessarily money. It could be joy, pain or anything that has value to us). If you look at the graph that represents this theory, you would notice how the graph is steep at the beginning in both directions, but steeper in the loss area.

One of the insights of this idea is that we need to aggregate pains but segregate gains. In other words, when we talk about gains, it is better to be closer to the zero point of the axis but in the case of loses it is better be as left as possible on the graph.

Imagine going to the dentist. You need to take a four-hour operation. Your dentist offers you to do it in two sessions of two hours or in one session of four hours. Prospect Theory suggests, maybe counter-intuitively, that it is better for you to have a 4 hour operation than a two hour one.

That got me thinking about how this idea is manifested in managerial environments.

Have you ever heard the advice to celebrate small victories? Prospect Theory suggests that this is very good advice. However, in many managerial setting we are so busy dealing with current issues that we forget to celebrate small successes. We wait to the end of the period and have a huge event celebrating the last year. However, celebrating frequently turns out to be a much better way to in recognizing people’s efforts. So, instead of giving them a week off at the end of the project, give them 5 days over the duration of the project, as a reward for good work. Instead of throwing a huge party that will cost you 100,000$ dollars at the end of the project, have ten parties with a cost of 10,000 every now and then. This approach also seems to coincide with Dan Pink’s advice in Drive, that rewards should follow a “now that” pattern instead of a “if then” pattern.

I know that these examples are to literal a translation of the theory and that in real life, things work a little differently. However, I do believe that by understanding the idea of gain segregation, we can make our efforts to engage and recognize employees much more effectively and allow them, without changing our cost structure or the total sum of what they are gaining, to enjoy more of what we are already giving them.

How do you think the ideas of loses aggregation and gains segregation play out in our managerial decisions?

Elad

Are you a happiness machine?

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This is a subject I wrote about before but that I am only starting to realize its true importance. Unpredictability of rewards.

Watch the movie above. How do you feel? Putting all the cynicism aside, just seeing people this happy is contagious. Indeed positivity is contagious. And really, who doesn’t want his workplace, school or even home to be this happy? I know I do. And no, I am not advocating bringing a Coca-Cola vending machine or even giving people around you expensive gifts. I am talking about noticing people around you and doing something about it. One of the side effects of the prevalent system of Carrot and Sticks, is that people almost don’t expect anything surprising anymore. It is so easy to surprise them. And what does that have to do with management? A lot, as Tanveer Naseer writes in the original post where I first saw this ad:

So instead of having another typical team meeting, secretly plan to end it early and surprise everyone by bringing out cocktail platters and giving your employees time to just relax and enjoy their work environment. Or announce an impromptu hockey game in the office parking lot – with a request for spectators needed to cheer the game on. The point is it doesn’t have to be expensive or elaborate to plan – the only objective is to break up the routine and offer something to motivate your employees and raise team spirit.

And I will take it another step further and make it simpler. Notice and make sure the people around you know that they are noticed:

And the same happens to us when we see an employee doing good work. We assume that the fact that we saw him and know what he did means that he knows that we saw him and knows what he did. What is the solution? Taking the opposite assumption. We need to assume that our employees never know that we noticed them. Then make it a priority to let them know that we did. Let’s overcome the curse of knowledge and starting noticing people.

And also see here.

You know the saying – “I feel like you take me for granted”.

It is known because it is true – how many people around you do you take for granted every day? How many employees who are doing exactly what is expected of them are you ignoring? What will happen if you show them, in a simple way, how much you appreciate them? What will happen if you recognize their contribution? What will happen if you give them consistent feedback, all the time?

Tom Peters constantly writes about this and asks all of us: who did you take to lunch today? Every lunch is an opportunity to connect, with a costumer or an employee or in this case – recognize. How many thank-you notes have you written this week? How many people did you send flowers too?

And Dan Pink writes in his new book, Drive: The Surprising Truth About What Motivates Us, about the same thing – “if-then” rewards are bad motivators. We should move to “now that” rewards:

In other words, where “if-then” rewards are a mistake, shift to “now that” rewards – as in “Now that you’ve finished the poster and it turned out so well, I’d like to celebrate by talking you out to lunch”.

As Deci and his colleagues explain, “If tangible rewards are given unexpectedly to people after they have finished the task, the rewards are less likely to be experienced as the reason for doing the task and are thus less likely to be detrimental to intrinsic motivation”

Let’s take this idea one step further – “now that … let me surprise you! Let me make you happy! Let me do something unpredictable and unexpected”.

It is so easy to create the feeling we see above, yet it so hard. As I wrote a few months ago:

We know that predictable rewards are not as effective as unpredictable rewards, but still, most companies and managers stick to a schedule of predictable rewards. Why? Well, my guess is that it is just easier. As a manager, I don’t need to think and worry about my employees all the time. Does it really matter if I do in once every quarter for an hour or if I do it 30 times over the quarter for 2 minutes each time? But, the fact that it is easier does not mean that it is right (like most conventional wisdoms). We know nothing worth gaining is ever gained without effort.

Are you becoming a happiness machine? It is about time you become one…

Elad

Does management emanate from nature?

Photo by Ben Sutherland

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Finally, I have finished reading Daniel Pink’s new book Drive: The Surprising Truth About What Motivates Us. I don’t think the book needs another review (for a much better review than any I can write, see here). However, in the next few days I want to elaborate on and/or argue with some of the concepts in the book.

I want to start with this quote (an idea Dan mentions in his TED talk as well):

We forget sometimes that “management” does not emanate from nature. It’s not like a tree or a river. It’s like a television or a bicycle. It’s something that humans invented. As the strategy guru Gary Hamel has observed, management is a technology. And like motivation 2.0, it’s a technology that has grown creaky. While some companies have oiled the gears a bit, and plenty more have paid lip service to the same, at its core management hasn’t changed much in a hundred years. Its central ethics remains control; its chief tools remain extrinsic motivators…

While I agree that management hasn’t changed a lot over the last 100 years and that it is still built around misguided Taylorism based conventional wisdoms that is about time we break, I find it hard to agree with the main claim. Management does emanate from nature. In fact, the problem with management today as I see it is that we stopped doing what is natural and human and started using artificial methods to deal with people.

Being empathic, creating connections and socializing, talking and listening and even respecting our fellow human beings are not unnatural things.

When you start treating management as a race for productivity you get an unnatural phenomenon. When you start using carrots and sticks like people are jackasses you get an unnatural phenomenon. When you rely only on measurement of only the things you can measure to fuel management you get an unnatural phenomenon.

Pink claims that we should throw the word “management “onto the linguistic ash heap alongside words like “icebox” and “horseless carriage”. He claims that today we see many companies getting rid of “middle management” which leaves fewer managers with more people to manage. I think exactly the opposite.

I think what this world need is more managers. More discussions of the word and what it means to be a real manager of real people. Not more of the word that goes with every other role in every other company, but the word that describes the true role of a manager – people. more discussion about a manger who brings the best out of people. About a manager who listens to people and helps them excel. About the manager who takes out the linchpin and the artist in people. About a manager that brings out the natural human being in people.

I don’t think there is anything more natural than management. We just need to wake up, understand that we have been talking about the wrong thing and making the wrong assumptions and start being actual human beings again.

Elad

Are you worthy?

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Dale Breckenridge Carnegie wrote in 1905 (!) the following paragraph in the introduction to his book, The Art of Public Speaking:

Training in public speaking is not a matter of externals – primarily; it is not a matter of imitation – fundamentally; it is not a matter of conformity to standards – at all.  Public speaking is public utterance, public issuance, of the man himself; therefore the first thing both in time and in importance is that the man should be and think and feel things that are worthy of being given forth.

Isn’t this something that should be always true? Yes, the externals – visuals, speaking tools, metaphors – are all important. However, in the end, it boils down to the question – is what I am saying worthy? When you next go to give a presentation – ask yourself – what do I have to say? And I know what you are going to tell me. “I am going to talk about something boring and banal; there is nothing for me to ‘say’ in it”. And my answer –if there isn’t don’t talk.

If you can’t find the passion inside, the understanding of how you are making a difference, some kind of difference, small as it may be, in somebody’s life by giving this next presentation, don’t present. The title of Carnegie’s books includes the word art – and I would like to think of it as Art in the way Seth Godin thinks about Art in his new book Linchpin. There are many painters but there are only a limited number of artists who paint. There are many speakers, but there are only a limited number of people who deal in the Art of public speaking.

I will take this idea one step further. If you are a manager, this applies to your everyday work life too. When you wake up tomorrow morning and go to your office, what kind of mind set do you bring with you to the office? Are you doing things that are worthy? Do you feel that you have something to give, something of importance, that you are changing your employees’ lives?  What kind of passion do you bring to your partnership with them? Dan Pink tells us to ask ourselves two questions every morning. I think there is only one. Are you worthy?

Elad

Isn’t it time we stop with trying to create rules?

One of the more interesting locations I visited during the course I took in Singapore and India during the last few weeks was the Taj Mahal Palace & Tower Hotel in Mumbai. It is one of India’s most famous hotels, known around the world for its amazing levels of service. During our visit we heard a lecture from the head of the training division that described the history of the hotel and it’s culture. She was describing the culture of service and employee engagement and the fact that most of the employees in the hotel have worked there for more than 20 years.

Then, one of my classmates asked how does the hotel keep the employees so engaged for so long. I didn’t write the answer down, but this was, more or less, her answer:

We create employee freedom by not surrounding our employees with rules. At the same time making sure they understand the culture and what we are trying to achieve.

That sentence resonated with me. I am not surprised given my writing on outcome management and the fact that this is what I wrote a few months back as one of my lessons from Barry Schwartz’s talk at TED:

Let them to the job – people work differently. They produce the same outcomes differently. Don’t interfere. Don’t make up rules. Maybe, as Barry says, don’t even create incentives (I am not sure I totally agree with that one). Don’t try to make them do the job the way you would have done it. Give them the intellectual and mental space to work it on their own. Provide support and training but don’t create rules about the specific job. If phase one was done correctly, they will find the way to produce the outcomes you required.

Then, I read what Seth Godin wrote in Tom Peters‘ Blog about excellence (The post appeared in my RSS reader but is no longer available on the Tom Peters blog, the link is to another source on the web):

When the Ritz-Carlton hotel empowers every employee from chambermaid to manager to “make things right,” they’re not engaging in the sort of quality control most managers are comfortable with. In fact, if they were able to write down exactly what to do in every situation, the excellence factor would disappear. What the hotel accomplishes with its policy is this: they challenge their employees to become artists.

Another way to put all of this (not mine, Dan Pink’s): Autonomy, Mastery and Purpose. I am really waiting to read his new book (and not only me: 1, 2) to read more about these concepts, as I think they really encompass how managers should treat their employees. Just to start you thinking. Don’t you think that saying we should give our employees Autonomy, Mastery and Purpose is the same as saying not to create rules for them?

Elad

Is money equals motivation a conventional wisdom we have to break?

The last few days I have been reading the book Predictably Irrational, by Dan Ariely. It describes many experiments done over the years that illustrate how people behave in irrational ways when we – and when I say we I mean traditional economics – expect them to act like rational people. While I don’t agree with some of the conclusions Ariely makes in his book, I find the questions fascinating. Thus, I am going to dedicate my next few posts to relevant lessons for managing people the book.

Chapter 4 of the book is called: “the cost of social norms – why we are happy to do things, but not when we are paid to do them”. In it, Ariely describes a number of experiments that show how when people are paid to do things, they do them with less enthusiasm and effectiveness. It reminded me of the above fascinating TED talk by Dan Pink that talks about similar experiments that led to similar (but a little different) conclusions. Both Ariely and Pink conclude that we need to rethink the effectiveness of money as a motivator for work.

So, is money being the best motivator another conventional wisdom that needs breaking.  Well, I will let my past as lawyer get the better of me and say – yes and no.

Yes, because we need to realize that the world is changing. That some things that we thought were true are not true anymore. There is a growing tendency of people to seek out work that not only gives them money, but also gives them joy, a sense of impact and work life balance. People look to use their strengths more and attempt to reach a state of flow. And we need to understand that money creates problems, because it is easy to compare (link in Hebrew). I would direct you to Ariely’s first chapter in the book about relativity.

But the answer is also no. in some situations, monetary rewards work. And when we think about these experiments we need to remember a few things. First, the experiments described in Ariley’s book and in Pink’s lecture are experiments, done in a lab, on students and not in a real work environment. Real life is different and we need to be careful in applying the lessons learned in the lab without thinking about the differences between students in the lab and real life work environment. Second, these experiments are social science experiments. They don’t have one result. They check for averages. And averages are sometimes dangerous. The experiments show trends. They show tendencies. But they don’t show how all people behave in all situations. And we know that monetary rewards do work in certain circumstances. As Paul Hebert from I2I explains, although there are some accurate things in Dan Pinks’s lecture, we must be careful when taking it as saying all monetary rewards are bad. Below is his presentation on how to look at incentive reward strategies within the context of how business operates:

From all the theories of motivation I encountered to date, the one I like the most is Vroom’s expectancy theory.  The reason I like it so much is that it talks about personalization. About understanding each employee specific motivation and about customizing the right rewards, invectives, and recognition, in order to motivate him. And I think this is the most important lesson from the science and experiments. We should be careful from applying one approach. We should doubt and check if what we are doing actually works. And the most important thing of all, we should not assume what motivates people, we should find out.

Elad