Dan is very engaging as a speaker who believes that we are shifting to a corporate culture where creativity and big-picture design will dominate. In this talk, Dan discusses changes companies must make in how they manage creative people if they expect to survive. You’ll hear Dan make the following assertion sprinkled throughout the talk:
“There is a mismatch between what science knows and what business does.”
Quite simply, Dan points out that “extrinsic motivators are fine for many routine tasks where there is a simple set of rules to follow and a clear destination. Offering bonuses as incentives as part of a reward-punishment approach does not work for many 21st century tasks, where more difficult, cognitive skills are required.” Why?
Studies have shown that rewards have the effect of narrowing our focus and concentrating the mind, something that is highly desirable is there is a simple set of rules with a clear destination. But when creativity is involved, you don’t want to restrict thinking. In fact, you want just the opposite.
Creative, conceptual activities geared towards driving innovation do not have clear rules or a single solution! Dan points out that science has proven that if-then rewards can hurt productivity. He states:
“As long as tasks involve only mechanical skill, bonuses work as expected; the higher the pay, the better the performance. But once a task involves even rudimentary cognitive skill, a larger reward leads to poorer performance.”
How should 21st century workers be managed? Dan feels that intrinsic motivation is what matters; people desire to do things because they matter, because they enjoy it, because they are a part of something that is important. Have you heard this before?
Yes! Management has known about this for quite some time. Maslow's hierarchy of needs was published in 1943 and has been a part of management literature for decades. Management needs to catch up with the times and change its approach as the work forces moves higher up the pyramid and as innovation and creativity become increasingly important.
Dan points out that intrinsic motivation revolves around:
Autonomy: The urge to direct our own lives.
Mastery: The desire to get better at something that matters.
Purpose: The yearning to do something larger than ourselves.
His final thought: “Traditional management is about compliance. If you want engagement, self-direction works better.”
After viewing the talk, I found myself in complete agreement with Dan, but I had a few thoughts run through my head. I’m a Dilbert fan, and a couple of pointy-haired boss scenarios came to mind:
- An executive could get the message that they could “raise productivity” immediately by cancelling bonuses for all employees – yet they would somehow retain them at the executive level and even reward themselves with a larger bonus because they “significantly boosted productivity this year.”
- Managers would jump on the bandwagon with a poor implementation of Dan’s principles. It would look something like this:
- Granting autonomy and completely backing away without effective coaching and guidance, assuming immediate mastery and ability to perform the work, even though culturally an organization may not have expected this in the past.
- Being vague about the purpose and direction.
- And finally, punishing people for failing to successfully reach vague goals, with assumed skills, and no guidance and participation from management.
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What are your thoughts?