WorkPuzzle

Are You Doing At Least One Interview Every Day?

Kevin Ryan does.  Ryan is the CEO of AlleyCorp, a variety pack of internet start-ups he founded in New York City.  Inc. Magazine recently featured him in a series of articles about the secrets of business leaders who are highly productive.  While the whole series is worth reading, I found the interview with Kevin Ryan the most intriguing.

How does a guy who runs five start-up companies have time to conduct daily interviews?  According to Ryan, he doesn’t have time not to:

“I used to think business was 50 percent having the right people.  Now I think it's 80 percent.  The best way to be productive is to have a great team.  So I spend more time than most CEOs on human resources.  That's 20 percent of my week.”

He goes on to talk more specifically about his work at the Gilt Groupe, a website for bargain-priced luxury brands, that will grow to 500 employees this year.

“I interview a potential employee literally every day, for about an hour. Gilt, the company that currently occupies me most, hired 300 people last year, and I interviewed 50 of those -- plus all the candidates we didn't hire.  I heavily over-invest in recruiting.”

Ryan states that he maintains contact with more than 2,000 people solely for the purpose of attracting the best talent to the businesses he manages.  He puts special emphasis on first level managers because he doesn’t want the good people under them (many of whom he has hired) leaving.  He’s found that people will put up with a lot if they like their manager, but they’ll most definitely leave if they don’t.

If you are a business owner or responsible for managing a team, ask yourself this question:  Do you put this much emphasis on recruiting?  More specifically, do you put this much emphasis on interviewing?  Do you see the value of sitting face-to-face with people (for an hour a day) who could potentially make your team better? 

If not, Kevin Ryan thinks you’re missing something:

“Intensive as all this is, I ultimately save time, because I can delegate with confidence.  I don't feel compelled to have weekly one-on-one meetings with senior managers.  We'll meet once a month, but otherwise, I just ask them to send me an e-mail with a few paragraphs about whatever they think I should know.  I'm also comfortable being away from the office more often.  I take six or seven weeks of vacation a year, though I'm always connected.  When you've got the best people running things, you can take your kids skiing in France.”

Hmmm…interview more and take six to seven vacations a year.  I think this guy is onto something!

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Editor's Note:  This article was written by Ben Hess.  Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below. 

Closing The Interview: Ideas From A Top Manager

We have received some great feedback from several of our readers in response to The Power Of Good Interviewing.  We are fortunate to work with many talented and inspirational managers.  Among them is a manager who leads one of the most productive offices in a major nationwide real estate franchise.  In comparison to hundreds of offices across the country, her office has ranked #1 in production seven of the last ten years. 

We recently learned that this particular manager practices her own brand of asking and listening that apparently works very well.  In addition to having a natural way of communicating, having a clear mission, and setting the example of ambition (that is contagious), she has developed a well-honed interview process that involves asking the right questions and being a good listener.

I asked her to share with us what she asks and what she listens for during the interview process.  Here are some of her secrets:

First of all, she believes that the foundation of a productive office is ensuring that everyone is there to contribute to something bigger than themselves...that the entire office operates with a "higher purpose."  She calls it "creating an environment of contribution."

Transferring this objective to the interview process takes careful asking and listening.  The goal is to paint a picture that integrates both the candidate's goals and the greater goals of the office and company.

She elaborates:

"As important as asking questions, there is an exact group of questions I ask at the end of the interview that recruit to the vision I have for my office/company.  This has always engaged the type of people I want to work with who will fit the culture of the office.... In addition, if possible, I use these questions in a phone interview prior to meeting with the candidate to more fully listen and feel the energy the person has, without being influenced by their body language, physical presence etc."

Instead of just giving you the list of questions she asks her prospective candidates, I urge you to draw up a list of your own.  It's really not rocket science.  Ask open-ended questions that allow candidates to elaborate.  By the end of the interview, both parties should have a realistic view of what a mutually professional relationship would entail.  The idea is for the candidate and the manager to get a taste of what they will be doing together.  Roles should be clarified and expectations communicated by both parties.  But remember, more asking and listening....less telling and lecturing. 

As a result of routinely asking questions and actively listing during interviews, this manager has built consistent office performance and incredible retention.  If you have slowly gravitated toward settling for mediocre performance, perhaps the above ideas from one of the best among you, will help inspire you toward reaching for more.

Lastly, she ends the interview by asking her candidates to consider that, if hired, they will have an impact on the office, and urges them to take responsibility for that impact.  This can be as simple as saying hello to a new agent in the elevator.  She believes that clarifying this vision for a higher purpose sets the stage for the future. 

If you want to build an office that has a powerful impact, think beyond the menial tactics of sell, sell, sell...and inspire while you interview.  To pull this off credibly, you may have to revisit your own purpose and mission.  According to this top manager, it is worth it!

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Editor's Note:  This article was written by Dr. David Mashburn.  Dave is a Clinical and Consulting Psychologist, Partner at Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below. 

How Candidate Abuse Impacts Your Organization - Part 2

Last week, I shared an article written by Dr. John Sullivan regarding the consequences many organizations experience due to treating their candidates disrespectfully.  Of course, the reason this pattern continues is that the negative impact of this behavior is not felt directly.  The candidates leave the interviews and the hiring managers never hear from them again. 

But, that doesn't mean the impact doesn't exist.  Like a low-level infection or difficult-to-diagnose illness, it is the type of thing that saps a person's energy.  For organizations, it often results in missed opportunities.  Missed opportunities are doubly hard to swallow because they cause your competitors to grow while you stagnate.

This discussion prompted quite a bit of feedback from WorkPuzzle readers.  I received permission to share* one of these responses from a business owner who I respect a great deal.  I like his response because it demonstrates how treating candidates with respect and dignity (what we all should be doing) resulted in his company capturing additional opportunities.

"Ben, What a great article!  I have two stories that reinforce the positives of treating candidates right. Both involve [my previous company].  As I'm sure you know, in almost any consulting business, today's employees (or job candidates) are almost ALWAYS tomorrow's prospects and customers.
 
In the first case, we interviewed one particular candidate for a senior leadership position.  While the candidate was a great cultural fit, the tasks the job required didn't match his experience.  As much as everyone liked this guy, I couldn't extend an offer. 

Avoiding my natural inclination to call him up and give him the bad news over the phone, I invited him back to my office.  My message to him was simple- everyone strongly wanted him on the team, but the position wasn't a good match.  We all felt that we'd just be putting him in a no-win situation had we made him an offer.  He was disappointed, but he seemed to take it well. 

Two months later, I got a voice mail from him indicating he had changed positions and asked me to call him at his new employer.  I remember the details like it was yesterday...I called him back at 3:30 on a Thursday afternoon.  He explained that he had, just that previous Monday, started a new position with a large customer of ours.  Then he floored me:

'Look, here's why I'm calling.  I'd like you to assemble a team of eight consultants for a project.  If you can assemble that team and have the profiles of the team members to me by 8am Monday morning, the project is yours.'

I couldn't believe it.  We absolutely could assemble the right team, but I asked him why he was calling us and not his former employer (one of our competitors).  His answer:

'I was so impressed with the way you and your team handled my interview, that I said to myself that day...I hope I get a chance to hire them some day.'

We went on to win that project, which would eventually grow to produce $2.5 million in revenue over the following two years.
 
Here's the second story:  I got a call from one of our East Coast offices, asking me to interview a job candidate who was thinking of re-locating.  Before the firm spent the money to fly the candidate out, they wanted our office to interview the candidate.  Since the position was a senior-level position, we scheduled a full day of interviews. 

Over lunch, it became apparent to me that the candidate had the right background, however, he made many negative comments about former bosses.  I suspected he may have some attitude issues.  Regardless, he seemed like a nice enough guy and, again, it was very likely he could end up as a potential customer.  So, we completed the interview and committed to following-up with our sister office.  My feedback to them was, essentially, 'He seems to have the right skills, but there were some red flags.'

Our East Coast office eventually chose to fly him out for an in-person interview, but did not extend him an offer.  Three weeks later, one of our sales executives received a voice mail from this interviewee who ended up working for one of our company's key prospects (this was a company whom we'd been trying to meet with, but couldn't get past the various screens).  The voice mail stated:

'I know you've been trying to schedule a meeting with our company.  Would you please call my assistant and get on my calendar?  We have three projects we'd like you to start on immediately.' 

Unbelievable.  I personally went to the meeting and when I asked why we were being given the opportunity to do not one, but three projects, she said:

'A friend of mine just interviewed with you and he was so impressed with the people and the process, that I decided to give you a chance.'

Those three projects lead to a steady stream of work (totaling well over $1 million) over a five year period with one of the area's highest profile companies.  What we had failed to do in months of cold-calling, we were able to accomplish with one candidate interview- even though the candidate did not get the job. 
 
Both stories, I have told over and over both as encouragement and as a warning to those on my team - An encouragement about how we could impact our sales just by treating job candidates respectfully, and a warning since in both cases, had we handled things poorly, we would never have known why we were not given the opportunity to work on these very large and very high profile projects."

Think about it--$3.5 Million in revenue that would have likely gone to this company's competitors if his company had failed to impress their candidates.  Wow--who can afford not to apply this lesson!

*Note regarding providing feedback on WorkPuzzle discussions:   We don't receive a lot of open commentary regarding our blogs because many of your are (appropriately) concerned about posting public comments.  If you have feedback or want to make private comments, you're always welcome to email Dave Mashburn or me directly (workpuzzle_at_hiringcenter.net (replace the _at_ with a normal @)).  Your comments will be kept private unless you give us permission to autonomously share, as today's reader did.

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Editor's Note:  This article was written by Ben Hess.  Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below. 

 

The Power Of Good Interviewing

Thanks to Ben for some exceptionally written material over the past two weeks around the topic of drive.  I hope you have all digested the information and found ways to apply it.  I can tell you that on this end of the relationship, we have.  We spend a great amount of time discussing and implementing many of the ideas we present to you in WorkPuzzle.

Sometimes we forget to write about what you probably need most... reminders of the fundamentals of managing a real estate office!  Yesterday, I spent a great deal of time on the phone with an executive of one of our biggest clients, and pondered once again the nuts and bolts of great interviewing.

So here are some thoughts (some repeat from earlier blogs) and insight from yours truly:

As you know, it's almost impossible to find any relevant or useful information specifically about interviewing for the recruitment of experienced real estate agents. And when you do find something, there might be some fairly good information about building a solid pipeline and following up regularly....the usual stuff.

But I have noticed that two vital components are typically lacking.  These vital components are what separates the great from the mediocre recruiting managers.

The best recruiting managers are those who exercise these two essential components so naturally, they probably don't even know that they do it.  On the other side of the fence...a manager who doesn't put into practice the two things I'm about to tell you, can have 100 agents in their pipeline and follow up regularly, but their recruiting efforts will always fall short.

Before I tell you what the mystery components are, ask yourself what you do personally.  My guess is that you try to sell.  No matter how many times you have heard that this doesn't work, it's hard to break the habit.  If you're accustomed to closing, that's what you'll do.

We've written about it before, but here's the key:  Ask and Listen!  These two factors are more important than anything else.  It might be easy to sign lower caliber agents to the sell method, but anyone of any substance wants to know that you understand their story and their needs.  They want to know that you are deeply interested in them as people first, and agents second.  They need to feel that you sincerely want the best for them, and if the best is working for your company, then you'll only be able to articulate that once you've exhausted all relevant questions pertaining to them.

As most of you know, I am a clinical psychologist and still operate a private practice, seeing clients two days weekly.  I am trained to listen to the stories people tell me.  I can't begin to help anyone until I understand their story and their greatest challenges.  It's only in the context of understanding the entire picture that anything I say about their course of therapy will have any relevance to them.
 
Recruiting is no different.  Do a lot of asking and listening, and I guarantee that you will be doing more for your candidates than the majority of managers and recruiters out there.  That is the central competitive advantage.

As I said, the best managers among you are already doing this...because they do it naturally.  The rest of us have to be trained to do it... and that's OK too. 

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Editor's Note:  This article was written by Dr. David Mashburn.  Dave is a Clinical and Consulting Psychologist, Partner at Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below.

 

How Candidate Abuse Impacts Your Organization

As you may know, our company has the opportunity to interface with the management teams of many different organizations across the country.  While this is a great privilege for us and we learn a great deal from these interactions, we also have the opportunity to identify patterns of behavior across these companies.  Some of those patterns are positive and some are negative.

  Today, I'd like to draw your attention to one of the negative patterns that exists in many businesses, and touches nearly every industry - It is the tendency that many companies have to treat candidates disrespectfully.

Dr. John Sullivan, a professor at San Francisco State University, recently wrote one of the best articles I've read on this topic.  The article is compelling because it correctly quantifies the financial impact a company experiences when it treats candidates poorly.  This article is quite long, but I believe you'll miss some of the impact if I attempt to summarize it.  So, I'll republish part of the article below and then I'll provide a link to the entire article for you to continue reading if this is a topic that interests you.

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"How Candidate Abuse Is Costing Your Firm Millions of Dollars in Revenue"     -Dr. John Sullivan

A reporter from the Wall Street Journal once asked me what I thought was the greatest secret in recruiting. Such a broad question would usually cause one to ponder, but my immediate response was that abusive hiring processes cost organizations millions of dollars by turning possible customers into lifelong "haters.”

For decades it has been accepted that god-awful treatment of candidates is normal, and that since it is widespread, it’s OK. How anyone in recruiting cannot connect that a poor candidate experience is similar to a poor customer experience and assume that there is a significant negative impact is disturbing. Anyone with a basic knowledge of customer relationship management knows that there is a well-documented correlation between customer satisfaction (with their treatment and the products purchased) and customer retention, i.e. their willingness to buy from the organization again.

Organizations like the Ritz-Carlton and Wal-Mart have elevated monitoring guest satisfaction to a science and know the exact dollar cost of obtaining a customer, upsetting a customer, and losing a lifelong customer. While such evaluation is common in sales and customer support functions, it is nearly unheard of in HR functions, which often interact with a significant volume of potential customers in any given year. The impact of a poor “candidate experience” is uncalculated, unreported, and not discussed, making it quite possibly one of the largest “hidden costs” facing modern organizations.

Given that median job tenure is approximately 3.9 years, it’s highly probable that the vast majority of you reading this article suffered through an interview process in recent years or have a close friend of family member that did. As professionals in recruiting, we know the process sucks; the volume of evidence indicating so is overwhelming.

Staffing.org has for many years reported that more than 70% of applicants find the process distasteful. In most organizations little or no thought has been given to how the candidate experiences the process. Instead, the design is solely based on administrative need. Many organizations treat candidates more like prisoners or detainees than customers.

Applicants voluntarily come to your company wanting to help. They spend dozens of unpaid hours preparing for your process. Many of them may in fact be paying customers. Unfortunately they are all too frequently met with web pages that offer up generic content and are black holes when it comes to advancing their objectives. If they advance, candidates will also likely undergo a painful drawn-out application process, intervi ews scheduled at the most inconvenient times, and ultimately be dropped from consideration with little or no honest feedback about why.

I estimate that the average professional candidate voluntarily spends more than $1,000 worth of their own time and money in preparing for and participating in an organization’s hiring process. Given that level of investment, they deserve to be treated like good customers.

Remember that being treated poorly during the hiring process which often ends up in being rejected will not result in a mild disappointment, but rather unhappiness bordering on anger. Individuals who once championed your organization will likely become activists against your organization for at least two years and maybe a lifetime.

....Read the remainder of Dr. Sullivan's article. 

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If you're in a business that interfaces directly with the public, then your candidates are your potential customers.  It is important that your hiring process is designed so that every candidate has a better opinion of your organization after they interact with those involved in recruiting.  Making sure you've got this right is time and money well spent.

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Editor's Note:  This article was written by Ben Hess.  Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below. 

 

Drive: New Thoughts And Theories On Motivation - Part 2

From our previous discussions (1, 2, 3) regarding Daniel Pink’s book, Drive, we’ve learned that motivation among human beings has long been quantified in terms of a first level of motivation--the biological or survival drive (hunger, thirst, safety, etc.).  Beyond that, the second level of motivation is commonly described as the tendency of individuals to respond to rewards and punishments in their environment.  Most businesses and work environments focus on motivation from one or both of these perspectives.

For several decades, a few scientists have been working to quantify and harness a third human drive—what many people call “intrinsic motivation.”  This is a powerful concept and there is much interest now in closing the gap between what science knows and what business does.
 
Have you put some thought into how you can begin implementing ideas surrounding intrinsic motivation with those on your coaching team now, and those who you hope to attract to your team in the future?  If not, I’ll attempt to point you in the right direction today.  There is no way to cover this topic thoroughly in a few short articles, but hopefully I’ll have peaked your interest enough to read more about it.

The research on “Self Determination Theory” (SDT) as summarized in Pink’s book concludes that in order for a person to be intrinsically motivated on the job, their day-to-day work must contain autonomy, engagement, and purpose.  I’ll summarize each of these principles separately:

Autonomy:

Our “default setting” as human beings is to be autonomous and self-directed.  Unfortunately, circumstances, including outdated notions of “management” (including carrot and stick motivation techniques)—often conspire to change that default setting and turn us from being intrinsically motivated to just responding to external pokes, prods and incentives.  To get past external motivation framework and engage a person’s third drive (and the high performance it enables), the first requirement is autonomy.
 
People need autonomy over tasks (what they do), time (when they do it), team (who they do it with), and technique (how they do it).  Companies that offer autonomy, sometimes in radical doses, are out-performing their competitors.  Examples include: 

• Best Buy: Pioneered the Results Only Work Environment (ROWE)
• Google and 3M: 20% “Work on What Interests You” Time
• Zappos.com and Jet Blue: Perform customer service based on “what makes sense” to the customer service representative
• Gore and Associates (makers of GORE-TEX): Follow the philosophy that "to lead a team, you have to assemble your own team and the members have to agree to work for you."

Engagement/Mastery:
 
While extrinsic motivation requires compliance, intrinsic motivation demands engagement.  If you’re a regular reader of WorkPuzzle, you know we’ve spent a lot of time on this subject.
 
Only engagement can produce mastery - becoming better at something that matters.  And the pursuit of mastery, an important but often dormant part of our third drive, has become essential to making one’s way in the economy. 

Mastery begins with “flow”—optimal experiences when the challenges we face are exquisitely matched to our abilities.  Smart workforces therefore supplement day-to-day activities with “Goldilocks tasks” –not too hard and not too easy.

Mastery abides by three particular rules:

1. Mastery is a mindset: It requires the capacity to see your abilities not as finite, but as infinitely improvable (Do you remember the growth mindset?).
2. Mastery is pain: It demands effort, grit, and deliberate practice (Do you remember the Talent Code?).
3. Mastery is an asymptote: It’s impossible to fully realize, which makes it simultaneously frustrating and alluring.

Purpose:

Humans, by their nature, seek purpose—a cause greater and more enduring than themselves.  But traditional businesses have long considered purpose ornamental—a perfectly nice accessory, so long as it doesn’t get in the way of the important things.  But, that’s changing—thanks in part to the rising tide of aging baby boomers reckoning with their own mortality.

From an extrinsic motivation framework, purpose maximization is taking its place alongside profit maximization as an aspiration and guiding principle.  Within organizations, this new “purpose motive” is expressing itself in three ways:  (1) in goals that use profit to reach purpose; (2) in words that emphasize more than self-interest; and (3) in policies that allow people to pursue purpose on their own terms.  This move to accompany profit maximization with purpose maximization has the potential to rejuvenate our businesses with people who have an internal passion to do their best work.

There is a lot on this topic to digest.  If you’re feeling overwhelmed or confused about how all of this could possibly be applied to your organization, let me encourage you to start making the application to your personal circumstances first.  Is your job structured in a way that allows you to personally experience intrinsic motivation?  If not, start making changes in how your own job is structured and what you’re subsequently experiencing in your daily work regimen.  Build upon the intrinsic motivation you feel to make adjustments in how you interact with your team and impact your organization at large.

If you want to learn more, pick up one of Daniel Pink’s books or any of the great books that we’ve referenced over the last year in WorkPuzzle.  We all have a lot to learn... 

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Editor's Note:  This article was written by Ben Hess.  Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below. 

Drive: New Thoughts and Theories on Motivation

So, we’ve learned (1,2) that the “carrot and stick” motivation techniques often fall short at producing desired results.  Worse yet, deploying such techniques sometimes worsens the status quo to the point where offering no incentives at all produces a better end result.

Of course, this begs the question—if the “carrot and stick” does not work, what does?  Daniel Pink, best-selling author of Drive, spends the majority of his book answering this question.  As you might imagine, the answer is not very simple and concise, but I’ll try to summarize a few of the high points in the next couple of articles.

Motivation techniques take on new and vibrant life when you can get an individual to switch from being extrinsically motivated to being intrinsically motivated.  To address this desired migration, a few prominent researchers are starting to focus on “self-determination theory” (SDT) as the best vehicle to get us there.  Pink describes it this way:

“Many theories of behavior pivot around a particular human tendency:  We’re keen responders to positive and negative reinforcements, or zippy calculators of our self-interest, or lumpy duffel bags of psychological conflicts.  SDT, by contrast, begins with a notion of universal human needs.  It argues that we have three innate psychological needs—competence, autonomy, and relatedness.  When those needs are satisfied, we’re motivated, productive, and happy.  When those needs are thwarted, our motivation, productivity, and happiness plummet.”

This may sound overly simplified, but this motivation theory boils down to engaging what many people are now calling a third drive—the capacity each human has for interest (the first drive is biological--eating, sleeping, sex, etc.; the second drive is responding to rewards and punishments in one's environment).  

For many people, this third drive is suppressed—especially when it comes to work and vocation.  But for a small minority, this aspect of humanity emerges and blossoms on the job.  These are the people you would probably already recognize as intrinsically motivated, and it’s the characteristic we desire to develop in those who are missing it.

While the research on this topic is still somewhat limited, it is starting to gain momentum:

“Over the last thirty years…a network of several dozen SDT scholars has been conducting research in the United States, Canada, Israel, Singapore, and throughout Western Europe.  These scientists have explored self-determination and intrinsic motivation in laboratory experiments and field studies that encompass just about every realm—business, education, medicine, sports, exercise, personal productivity, environmentalism, relationships, and physical  and mental health.  They have produced hundreds of research papers, most of which point to the same conclusion.  Human beings have an innate inner drive to be autonomous, self-determined, and connected to each other.  And when that drive is liberated, people achieve more and live richer lives.”

Take a minute to inventory your work environment.  If you’re coaching and managing a team, do the individuals on your team have the opportunity to operate under these important principles?  If you’re trying to recruit the best talent, are you able to offer an environment where talented individuals will feel engaged and experience their own intrinsic motivation?

These are important questions to consider if you want to successfully compete in the future.  Next week, we’ll cover how to start to integrate these ideas into your team. 

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Editor's Note:  This article was written by Ben Hess.  Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below.

Motivation: The Downside of the Carrot and Stick—Part 2

Last week, I introduced the concept that commonly held beliefs about “carrot and stick” motivation techniques may not be very effective.  I shared the results of an experiment conducted at Princeton University that illustrated how a person’s creativity is restricted when “if-then” incentives are introduced into a problem-solving scenario.

While interesting, one experiment is not sufficient to shape our concept of motivation—especially if this means giving up some closely held beliefs that we feel are effective.  In his book Drive, Daniel Pink lays out a more complete case based on research from many different sources to make his point:  There is a significant downside to using carrot and stick motivation techniques.  I’ll summarize the research below. 

The Seven Deadly Flaws of Carrot and Stick Motivation Beliefs

1.  It can extinguish intrinsic motivation.

After examining three decades of studies conducted on this topic, behavioral scientist, Edward Deci, stated, “Careful consideration of reward effects reported in 128 experiments lead to the conclusion that tangible rewards have a substantially negative effect on intrinsic motivation.”   In essence, when you focus on short-term results, you do so at the expense of long-term motivation.

2.  It can backfire and diminish performance.

In recent years, four economists—two from MIT, one from Carnegie Mellon, and one from the University of Chicago-- were asked by the Federal Reserve to affirm the simple business principle that higher rewards lead to higher performance.  Their conclusion… "We find that financial incentives can result in a negative impact on overall performance.”

3.  It can crush creativity.

I shared the candle experiment in my last WorkPuzzle which suggested  that time pressures hinder creativity.  Many other experiments support this finding.  Pink concludes, “For artists, scientists, inventors, schoolchildren, and the rest of us, intrinsic motivation—the drive to do something because it is interesting, challenging, and absorbing—is essential for high levels of creativity.  But the 'if-then' motivators that are the staple of most businesses often stifle, rather than stir, creative thinking.”

4. It can crowd out good behavior.

In a famous Swedish study, researchers tracked the percentage of people who would donate blood voluntarily.  With no incentive (other than good will), 53% of the test group chose to give blood.  When an incentive was introduced, the percentage dropped to 30%.  Why?  “It tainted an altruistic act and crowded out intrinsic desire to do something good.”

5.  It can encourage unethical behavior.

“Most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts.  Executives game their quarterly earnings so they can snag a performance bonus.  Secondary school counselors doctor student transcripts so their seniors can get into college.  Athletes inject themselves with steroids to post better numbers and trigger lucrative performance bonuses.”  Intrinsic motivation doesn’t fit with this model.  When the reward is the activity itself—deepening learning, delighting customers, doing one’s best—there are no shortcuts.

6.  It can become addictive.

Any parent who has ever thought of paying their kids to take out the garbage knows that the chances of getting them to take out the garbage for free in the future are very slim!  Rewards offered for positive behavior often have to be subsequently increased to get the same level of performance.  The reward becomes addictive.  Casinos have done research on the ability of people to make good decisions when there are rewards at stake.  Their findings?  You guessed it.  When rewards are offered (even small ones), the likelihood of people switching from risk-adverse behavior to risk-seeking behavior, increases significantly.

7.  It fosters short-term thinking.

It only makes sense that offering incentives will often produce short-term results.  Several studies show that paying people to exercise, stop smoking, or take their medicines produces terrific results at first—but the healthy behavior disappears once the incentives are removed.  Pink puts it this way, “Greatness and nearsightedness are incompatible.  Meaningful achievement depends on lifting one’s sights and pushing towards the horizon.”

Conclusion:  Be very careful if you are going to use carrot and stick motivation techniques to get results from yourself or those you manage and coach.  Of course, this begs the question…what does work?  We’ll cover that in our next discussion.

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Editor's Note:  This article was written by Ben Hess.  Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below.

Motivation: The Downside of the Carrot and Stick

Earlier this week, Dave began a discussion regarding motivation, which we hope has jump started your quest to be a better motivational force to those in your circle of influence.  One of the purposes of WorkPuzzle is to help you apply science and thoughtful study to management topics.  We believe this is the best way to separate what’s truly valid from those preconceived notions (that are often false) that keep us from producing the best results.

A few weeks ago, I picked up a book called Drive: The Surprising Truth About What Motivates Us.  This is the second bestselling book written by author Daniel Pink in the last couple of years, so he’s obviously tapping a nerve with the topics he covers in his books.  

I’ve found this book particularly intriguing.  Pink does a great job of scientifically dispelling many of the misunderstandings I personally have concerning motivation.  These misconceptions involve what I believe will motivate me personally and also what I’ve come to believe will motivate those around me.  Over the next week or so, we’ll discuss a few of the highlights regarding Pink’s work.  You’ll be surprised by what you learn.

Let’s start with the most commonly held motivation topic of all time—the proverbial carrot and stick. Through experience and study, I’ve come to the conclusion that there are many advantages to using incentives over punishments to motivate people.  Of course, there are others who believe that punishments, applied correctly and under the right set of circumstances, serve as a better source of motivation.
 
There are good arguments on both sides of this topic, but Daniel Pink points out that scientific research has largely made this debate a moot point.  Why?  Because neither the carrot nor the stick motivation techniques are effective in most circumstances!  In fact, deploying any sort of “if-then” reward system (if you do a task, then you get a reward) typically demotivates those performing a requested task.

To show you how this works, let's review an experiment originally conducted by psychologist, Karl Drucker, in the 1930’s.  The experiment involved a participant being given the articles in the picture below (the items inside the box are common thumb tacks), and then being asked to attach the candle to the wall in a way that when lit, it will not drop any wax on the table below.

Think for a minute how you would solve this problem.  Most people first attempt to use the tacks to fasten the candle to the wall, but quickly discover that it doesn’t work.  Some people then try to use a match to melt the side of the candle and stick it to the wall.  That doesn’t work either.  Eventually, after five to ten minutes, most people figure out that the tacks can be easily used to fasten the box perpendicular to the wall.  This creates a shelf that the candle can be placed upon.  A quick drop of melted wax securely attaches the candle to the shelf, and the shelf ensures that wax will not drip on the table.  Problem solved.

This experiment has been used in many behavioral science studies over the years, but it wasn’t until recently that psychologists at Princeton University started to wonder if motivated individuals could solve the problem more quickly.  Of course, to prove out this hypothesis, the researchers offered incentives (a carrot) to those people who could solve the problem quickly.  The participants in the study were told they would receive a monetary reward if they were among the top (fastest) 25% who solved the problem in the group.  Furthermore, the person who solved the problem first would also receive an additional, quite substantial, bonus.

Guess what happened?  Remember, the problem usually took five to ten minutes to solve when no incentives were offered.  When the participants were given incentives, it took an average of 3.5 minutes longer to solve the candle problem!  The carrot produced the opposite result than what the researchers had hoped for and expected.

This is what makes motivation such a tricky topic.  Well-intended interventions can not only fail to produce the desired results, but can often make things worse.  It’s like going to a casino...you can not only fail to win, you can lose the money you bet in the first place.

In the case of the candle experiment, here’s what happened:  The solution to the problem requires a certain level of creativity - In order to solve the problem, the subject has to eventually stop seeing the box as a container for tacks, and see it as a shelf for a candle.  When the time incentive is offered, the brain starts to shut down some of its creative function and focuses more energy on winning the race.  The very thing needed to win the race is being hampered by the carrot.

This is just one example of many studies where incentives have been documented to produce diminished results.  In fact, the research now suggests that there are only a very few specific circumstances where “if-then” incentives produce better results (we’ll cover those in a future discussion).  For the large majority of conditions, the carrot / stick motivation techniques serve to undermine performance.

We’ll delve into this in more detail in upcoming discussions.  In the meantime, start to inventory your own personal behavior and pinpoint where carrot / stick motivation techniques have become part of the fabric of how you work with people. 

Researchers can help us find better ways to motivate and inspire those around us, but the first step is to identify how and where our current efforts have backfired on us...  

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Editor's Note:  This article was written by Ben Hess.  Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below.

 

What Really Motivates Workers?

Occasionally, I come across an article unveiling some new research finding that literally raises the hair on the back of my neck...in a good way.  Such articles are typically the result of rigorous research, uncovering something significantly universal about the core of who we are and how we are made.

Harvard Business Review recently released its Breakthrough Ideas For 2010.  If you haven't seen it yet, it's worth a look. 

"HBR’s annual ideas collection, compiled in cooperation with the World Economic Forum, offers 10 fresh solutions we believe would make the world better."

The first entry, by Teresa M. Amabile and Steven J. Kramer of HBR, titled Understanding the Power of Progress, resonated enough with my own experience, that I'm pretty sure it will with you as well.  I think it will cause many of you to carefully rethink the way you structure training and coaching of your new agents particularly, but could really be applied to anyone in your organization. 

"Ask leaders what they think makes employees enthusiastic about work, and they’ll tell you in no uncertain terms.  In a recent survey we invited more than 600 managers from dozens of companies to rank the impact on employee motivation and emotions of five workplace factors commonly considered significant:  recognition, incentives, interpersonal support, support for making progress, and clear goals.  'Recognition for good work (either public or private)' came out number one.

Unfortunately, those managers are wrong.

Having just completed a multiyear study tracking the day-to-day activities, emotions, and motivation levels of hundreds of knowledge workers in a wide variety of settings, we now know what the top motivator of performance is—and, amazingly, it’s the factor those survey participants ranked dead last.  It’s progress.  On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak.  On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest.

This was apparent in vivid detail in the diaries we asked these knowledge workers to e-mail us every day.  In one end-of-day entry, an information systems professional rejoiced that she’d finally figured out why something hadn’t been working correctly.  'I felt relieved and happy because this was a minor milestone for me,' she wrote, adding that her efforts to enhance a specific version of software were now '90% complete.'  A close analysis of nearly 12,000 diary entries, together with the writers’ daily ratings of their motivation and emotions, shows that making progress in one’s work—even incremental progress—is more frequently associated with positive emotions and high motivation than any other workday event.  For example, it was noted on 76% of people’s best days, when their reported moods were most buoyant, and on only 25% of their worst.  (The exhibit 'What Happens on a Great Workday?' shows how progress compared with the other four most frequently reported positive events.)"

One example within our own business, that we've written about before, is the positive impact a  measurable recruiting system has on those responsible for moving candidates through predictable steps in the recruiting pipeline, from first contact to hire date.

By building a system that can be followed with tasks to be performed daily, one feels that they have made progress simply by checking each task off the list for the day.

Here is HBR's "breakthrough idea" for applying this research:

"As a manager of people, you should regard this as very good news:  The key to motivation turns out to be largely within your control.  What’s more, it doesn’t depend on elaborate incentive systems.  (In fact, the people in our study rarely mentioned incentives in their diaries.)  Managers have powerful influence over events that facilitate or undermine progress.  They can provide meaningful goals, resources, and encouragement, and they can protect their people from irrelevant demands.  Or they can fail to do so.

This brings us to perhaps the strongest advice we offer from this study:  Scrupulously avoid impeding progress by changing goals autocratically, being indecisive, or holding up resources.  Negative events generally have a greater effect on people’s emotions, perceptions, and motivation than positive ones, and nothing is more demotivating than a setback—the most prominent type of event on knowledge workers’ worst days."

I don't know about you, but this simple yet profound finding about how people work best raises the hair on the back of my neck... It says something about who we are, how we are created, and what we are meant to do:  Make progress!  By small steps, yes...but progress nonetheless.

If you can harness the tapping of this core need in people, you can build and sustain a company, a family, a marriage, or a country...

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Editor's Note:  This article was written by Dr. David Mashburn.  Dave is a Clinical and Consulting Psychologist, Partner at Tidemark, Inc. and a regular contributor to WorkPuzzle.  Comments or questions are welcome.  If you're an email subscriber, reply to this WorkPuzzle email.  If you read the blog directly from the web, you can click the "comments" link below.