by Jim McGee
September 9, 2009 at 8:38 am
· Filed under Enterprise 2.0
Daniel Pink, author of the excellent Free Agent Nation and A Whole New Mind, has a new book coming out in December. Drive: The Surprising Truth About What Motivates Us takes a look at the evidence about the links between incentives and creative, knowledge work. Recently, he spoke about his work at a TED talk in England:
Link to Daniel Pink’s TED Talk Video
If you’ve been paying any attention at all, his conclusions should come as little surprise. This is simply one more brick in the growing wall of evidence that the fiction of “rational economic man” has long outlived whatever utility it might have had. The evidence boils down to this; if you need creative and original thought out of people, economic incentives don’t work. Creative work comes from internal, self-motivation and requires autonomy, mastery, and purpose.
This is not news. The question that is interesting is whether organizational leaders have finally reached the point where they are prepared to act on this knowledge. If what your organization needs is creative, mindful, independent thought from all quarters and you must finally abandon the pretense that you can elicit that behavior with specific, concrete incentives, then how much harder has your leadership task become? If, to use Pink’s phrase, “sharper sticks and sweeter carrots” won’t work, what will?
The answer comes down to leadership. More specifically, it comes down to the kind of leadership exemplified by Bill Russell of the Boston Celtics. For Russell, leadership was about getting the best out of each of the players on the team more than it was about getting the best out of himself.
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I find Alfie Kohn’s work on this very helpful too.
But for those that dismiss him I offer a few concrete alternatives. The Fire Brigade – who would say that they are not high performance? But they put teamwork ahead of everything. So there is no performance pay. Each pay grade is tied into what you have proved that you can do to your peers. If you wish to go into management – Captain and above – you have to have been a real fireman first. No one can jump into a managerial role without having demonstrated that they have the right stuff as a fireman.
The key being that in a fire, you have to be able to trust the person next to you and the person who sends you into the fire. Everything in the system is focused on this – nothing must distract from it.
Performance pay is highly divisive. Why do I say this? I was responsible for a large bank’s Total Comp design – over 2$ billion – in another life. It over emphasizes the individual contribution and divides people.
Let’s look at the typical trader in a bank. He can claim to have made millions. But what enables him to do this are many structural things that don’t apply to him at all:
* The banks balance sheet – he is betting with the shareholder’s money – that is where the gearing is. When investment banks had their own capital, the potential was much less – you were betting your own money
* The banks’ capital base and reputation – key to trading is getting the flow and the deals – you don’t get either without the good name of the bank. Flow is seeing enough volume to get the picture – like an aircraft controller – Without the limits set by counter party risk – you don’t get the deals either
* The banks systems – without millions spent on trading support etc – you would not make a trade
I could go on but I think you might get my drift.
Finally we get to the heart of it all. Bank leaders say that they need to do this to keep innovation alive. Innovation for whom?
Since the 1980’s when banks had access to huge amounts of capital after the old regulation was put aside, the financial system has sucked the wealth from the working people of the nation. Wages, meaningful jobs have all been in decline since deregulation.
This has been a tragedy that has spawned the crisis and the systemic breakdown of society.
It’s all based on a self serving lie
I gave serious thought to pointing to Alfie Kohn here as well.
I am skeptical that we’ll see any leaders enlightened enough to “do the right thing” here. The benefit too easily from the broken system that currently exists. Any most, I fear, are too short-sighted to grasp what will happen as the brokenness becomes more evident
[GR]Will organizational leaders accept the evidence about incentives and creative work? http://j.mp/XvgU6
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Jim McGee: “Will organizational leaders accept the evidence about incentives and creative work?” http://bit.ly/Yoh3X
This comment was originally posted on Twitter
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