Key Takeaways

1. Motivation is central to all elements of your life, from driving yourself to come to the office every day to getting your colleagues and employees to out in an exuberant help grow your business unit or company.
2. One key to motivating people is ensuring they see meaning in their work. You need to ensure and show them that their efforts help the company, customers and most importantly their team and colleagues.
3. You should not rely on money to motivate people as it often has the opposite result. If they do not see meaning in their work, bonuses could even negatively impact motivation.

The key motivational points to leadership

My favorite author, favorite economist, favorite academic and all around great guy, Dan Ariely, recently published a new book, Payoff: The Hidden Logic that Shapes our Motivation, and it has some great insights that will help you as a leader (and also help build products, but that is for another blog post).

Motivation drives everything

The book is clearly about motivation and it highlights how central motivation is from the time you are very young. We need to motivate ourselves to go to work everyday, we need to motivate our employees to come to work every day, we need to motivate our suppliers to works with us, we need to motivate (in some cases) regulators to allow us to work, we need to motivate customers to use our product or service, etc. On the home front, we need to motivate our kids to do their homework and clean their room, we need to motivate our partner to make dinner or plan a vacation, we need to motivate our neighbors to trim their hedges, etc. The key is that almost everything we do requires motivation, either ours or others.

Motivation is about meaning

It is particularly important to motivate yourself or others to do things they do not really want to do. It is easy to convince someone to come to a meal in a Michelin star restaurant but why visit a friend in the hospital. Ariely uses an example of how he visited a boy in a hospital with severe burns (something Ariely went through early in his life), mentally very difficult for him. Ariely points out that “it shows how deeply we are driven to tap into a sense of meaning, even when doing so is challenging and painful. It also shows that there is a big difference between happiness and meaning….’Meaning’ is a slippery concept, but its essential quality has to do with having a sense of purpose, value, and impact— of being involved in something bigger than the self. “

Understanding how to create this meaning, both for yourself and others, drives your ability to motivate and thus lead. Related, understanding meaning helps you remove the factors that demotivate.

Work needs purpose

The key to motivating yourself and your team (be it your direct reports or your entire company) is providing a sense of purpose. People will work, and work hard, if they feel their efforts make a difference. That could mean building something for themselves, building and helping the company get more successful or building something consumers will use. Conversely, one of the easiest ways to demotivate people (and have them leave your team) is to have them believe their efforts are worthless.

There are many ways to strengthen how people feel they are impacting the company and consumers. Rather than presenting them with a plan for performing their job, help them create a plan and then implement it. They will then see that plan as something they have built and be motivated to have the plan succeed.

If they are providing a service, let them speak with the consumers using the service. Help them understand how their efforts are improving the customers’ experience. If it is a product, put their name or initials on the product. Then their product will be what the customer is using.

If they are involved in a project that is then cancelled, show them how their efforts still benefitted the company. Explain what parts of the project will be used in future projects. Discuss how the project will be a building block in the company’s future and not a waste of time.

As mentioned earlier, if people feel they wasted their time they are likely to be demotivated and possibly leave the company. Ariely uses an example of speaking to a group of engineers who just had a project cancelled. They had spent over a year on the project and it was killed without much explanation. A few months after Ariely’s meeting with the engineers, most of the engineers had left the company.

This anecdotal experience confirmed some of Ariely’s research. He had research participants build Bionicles (Lego robots). While paying all of them to create the robots, for one group they would destroy, in front of the participants, the robots right after they were built. He found that regardless of pay, people would build less robots (even if they had previously loved building robots) if they were destroyed right after construction. Ariely wrote, “those who weren’t terribly excited about Bionicles created about seven of them— the same number as those who loved building them. In general, we should expect that those who love Bionicles would build more of them, but by dismantling their creations right before their eyes, we crushed any joy that the Bionicle-loving participants could get out of this otherwise fun activity. But because he keeps pushing the same rock up the same hill over and over, his work is completely meaningless.”

The key to these findings are that when people are acknowledged for their work, they will work harder for less pay, and when we they not acknowledged, they lose much of their motivation. This suggests that if you really want to demotivate people, ‘shredding’ their work is the way to go, but that you can get almost all the way there simply by ignoring their efforts. Acknowledgment is a kind of human magic— a small human connection, a gift from one person to another that translates into a much larger, more meaningful outcome. On the positive side, these results also show that we can increase motivation simply by acknowledging the efforts of those working with us. “

Don’t make your team feel they are replaceable

Just as destroying people’s work demotivates them, so does making them feel replaceable. Ariely uses the example of identical cubicles that remind people they are low in the corporate hierarchy. Effectively, the company (you?) are telling them they do not justify an investment from the company as they probably will not be there for a long time, that they are replaceable. Not only is this a problem with the traditional cubicle system but also in the open office, when some people are given a desk while others are given offices.

It is not just office layout that creates the perception from employees they are replaceable. As Ariely writes, “I think it’s partially because of the persistence of an industrial-era view of labor that is largely accepted as truth. This view holds that the labor market is a place where individuals exchange work for wages (regardless of how meaningless the labor is) and that people typically don’t really care what happens to their work as long as they are fairly compensated for it.”

Extending this concept out, if people are paid by how many widgets they create, they can then be replaced by someone else who will create widgets for the same or lower wage. Thus, even your compensation structure needs to help create and not destroy meaning and motivation.

Don’t make it about money

While compensation can help motivate, its importance is often overestimated and as discussed above can also demotivate. Ariely ran a workplace experiment at Intel where there were four groups, a control group, one that received a cash bonus; one group received a voucher for pizza and the other group received praise from their manager. All three of the groups performed better than the control group day one, but surprisingly the pizza voucher and praise had the biggest impact (6.7% and 6.6% increase over control, respectively), while the cash prize generated a more moderate increase (4.9%).

The big surprise came on day two, where those in the money condition performed 13.2 percent worse than those in the control condition. As Ariely wrote, “it was as if they were saying to themselves, ‘Yesterday they paid me a bit extra, so I worked harder. But today they aren’t offering me anything special, so I don’t care.”

Day three, the financial reward and control groups started to converge, as the money reward saw a drop in their performance of only 6.2 percent. By the fourth day, productivity had drifted back toward the baseline, with only a small decrease compared with the control condition (2.9 percent). Overall for the week, the monetary bonus condition resulted in a higher pay (the bonus) and a 6.5 percent drop in performance compared with no incentive at all.

One important lesson from our experiments at Intel is that different types of motivations don’t add up in a simple way. In particular, adding money to the equation can backfire and make people less driven.

Also important is that many people do not understand how the changes in bonus structure will impact their own performance. Most people feel the monetary reward would improve their performance, and a bigger reward would generate better work. People are not being dishonest but when they think about a task in advance they overfocus on the extrinsic motivators, such as payment and bonuses while in the midst of a task, people focus on the inherent joy of the task.

You also need to build a compensation scheme that does not make your employees feel replaceable. Ariely writes that “when organizations attempt to create their compensation schemes, the first mistake they often make… is to overemphasize the countable dimension. Following the principle of looking for your keys under the street lamp, managers are drawn to the subset of tasks that are easily measurable. As a consequence, they overemphasize those parts of the job and divert attention and effort away from the uncountable dimension. The second mistake managers often make is to treat the uncountable dimension as if it were easily countable.” If it is easily countable, then anyone can do it. It implies you are like a rat in a maze, but instead of working for a bit of food you are working for a salary.

Explain how effort impacts team

While money alone cannot motivate employees, and often can demotivate if not structured right, words can have a big impact on motivation. As I discussed earlier, people need to see meaning in their work. Thus, as a leader, it is your job to convey that meaning.

Someone might be bored or unmotivated but by discussing the importance of their work you can turn their attitude around. You need to explain how their work impacts the customer and impacts the company, why it makes a difference. Most importantly, I have found you need to show how it impacts their teammates, the colleagues they are closest to. Does their effort elevate the entire team in the eyes of the company, does it help get additional resources or responsibilities, does it take some of the stress away from their colleagues, etc. By showing how they are helping, even apparently boring tasks take on a new meaning and thus generate a new level of motivation.

Let them own it

As well as explaining how every member of the team is making a difference, you need to help them own their work, make them understand that they are building their output. In multiple studies, people place a higher value in things they create themselves. For example, people asked to create origami and then offered the chance to purchase their works always offered more for their own creations than others did for the creations. There are many other examples of people willing to pay more for something they built than something built by someone else.

This phenomenon can be conveyed to motivation in the workplace. If an employee creates a marketing plan they are more likely to believe in that plan than if they were handed one and asked to execute it. If they believe in the plan, they will have stronger motivation to implement it. The key takeaway is, when possible, have your team members build a plan how to best do their jobs rather than simply telling them what to do.

Trust your employees

The exchange of trust and goodwill is an important and inherent part of human motivation and needs to be part of your leadership strategy. The more your team feels you trust them, the more motivated they will be to contribute to the company.

Showing trust and goodwill permeates how you interact with employees. Ariely writes “it is relatively easy to create goodwill. All we need is an encouraging word here and there, a gift from time to time, and a sincere look in the eyes.” Other areas that you can show goodwill and trust are:

• Do not micro manage. When you give an employee a job or goal, let them do it. Do not look over their shoulder every five minutes and critique how they go about their job.
• Structure employment agreements to show trust. Do not try to cover every bad thing they can do, especially when you are not likely to enforce it. Build the relationship on mutual respect and a common goal.
• Do not put in strict policies for common sense activities. You do not have to create Internet policies that list every site employees can and cannot visit. You do not have to list the exact expenses people will be reimbursed for. Explain the high level goals and your team will see you trust them and act appropriately.
• Create a reasonable approval process. Trust your employees to approve small deals or purchases (or even large ones). It is not an issue of how time consuming the process is, it is the signal it sends that you do not trust your employee to make the decision themselves.

Ariely also points out that “goodwill is fragile. Supporting it is easy, but destroying it is even easier.” Thus, you need to build goodwill and make sure there are not activities that undermine your other efforts driven by other parts of your organizations (i.e. HR or legal).

Create a long-term relationship with your employee

Finally, Ariely points to another key in motivating yourself and people around you, ensure they are thinking of the long term. Ariely writes, “you won’t bother putting a lot of energy into a short-term relationship, whether with a romantic partner, employer, colleague, or apartment. But if you think of that relationship as a long-term investment, then you will be motivated to deposit more of your love, trust, energy, and time. This sense of investment is the basis of the marriage vow, and it is the basis of true dedication and loyalty in the workplace.”

In this day and age, it is easier said than done to make the employment relationship long-term. You do not, however, have to guarantee lifetime employment to build a long-term relationship. Reid Hoffman, co-founder of LinkedIn, wrote a great book a couple of years ago about how employment is now like tours of duty. While some criticized the book for suggesting that employment is transient, the key point is that the employee and employer both acknowledge it and create a plan that the tour of duty has meaning to both parties and leads to something better for both parties. Thus, although that specific job is transient there is still a long-term relationship for both sides. It shows that for all employees, even those on short-term contracts, if you build a long-term picture the employees will be better motivated.

There are other things you can do to build a sense of long-term commitment. You can invest in employees’ education, provide them with health benefits that clearly communicate a commitment to a joint healthy future, invest in their well-being both within and outside of work, invest in their personal growth, and provide them with a path for promotion and development within the company. The key is that you are both looking at the long-term, not just short term impact and results.

Motivation is multi-faceted so think it through

After reading Ariely’s book, I realize both how important motivation is to everything and how many different ways I can impact it (both positively and negatively). Being motivated myself, and having a motivated team, is incredibly powerful and thus worth the effort to implement many of the concepts Ariely suggests.