Author: Lloyd Melnick

The key motivational points to leadership

The key motivational points to leadership

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.

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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.

My lifetime value book is now available

My lifetime value book is now available

I am excited to announce that my book (with an assist from Wendy Beasley) on lifetime value, Understanding the Predictable, is now available on Amazon in both a Kindle and print edition. Understanding the Predictable is based on my blog posts about lifetime value with some case studies added to illustrate the various concepts and key takeaways (now a staple of my blog) for each section.

If you do read Understanding the Predictable, I would appreciate it if you posted an honest and open review on Amazon (good or bad) so others will see the plusses and minuses. I hope you enjoy.

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Value innovation is what creates blue oceans

Key takeaways

  1. Finding and creating a blue ocean market (a business that turns non-customers into customers, rather than competing for the same customer) is about creating a new value proposition, not technological innovation.
  2. Technology is not why Uber and Starbucks are now worth billions, they created offerings that appealed to non-customers (people not using taxis or people not going to retailers for coffee).
  3. You thus cannot rely on your technology or R&D group to create new opportunities, instead you need to find a new value proposition.

Value innovation is what creates blue oceans

I have written and spoken many times about Blue Ocean strategy, which is effectively turning non-customers into customers, rather than competing for the same customer. One problem many companies often make, though, is confusing product innovation for creating a blue ocean. A recent post, Confusing Technology Innovation with Market-Creating Strategies, highlights why R&D is not synonymous with market creation.

The success of two companies highlight how you can create a blue ocean without creating a product innovation. The first example is Starbucks. Starbucks was able to take a commodity business, selling coffee, and create a new industry by focusing on the customer experience. The post also points to “JCDecaux, which unlocked a blue ocean in outdoor advertising by providing and maintaining “street furniture” for municipalities in exchange for prime stationary downtown locations for ad displays. These strategic moves opened new markets without any bleeding-edge technology.”

Even technology companies that have created blue oceans have not necessarily done it by creating cutting-edge technology. Bleeding edge technology did not make Uber into a multi-billion technology company, instead it was applying relatively straightforward technology to traditional industry and using it to appeal to new customers. Same can be said for Wikipedia, which put information online but did not need new technology to do it but by combining existing technology with a traditional business, it created a product for a new range of customers.

The post points out that value innovation creates compelling new markets, not technology innovation. “Successful new products or services open market spaces by offering a leap in productivity, simplicity, ease of use, convenience, fun and fashion, or environmental friendliness.” Thus, you need to look at your business, your customers and non-customers and create value for them, rather than relying on your tech team to come up with a game changing innovation.

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New management skills for a new era

Key takeaways

    • Technology changes the competencies needed to lead a team or company successfully. You need to expand your skills to be a successful leader moving forward.
    • Leaders need to retain their expertise and control over their tasks and processes, even when these tasks are undertaken by computers and algorithms and not individuals.
    • You need to adapt to adding managing artificial intelligence and digital algorithms to your skill set. You need to change from optimizing a common workday for your team to flexible schedules. You need be flexible and thoughtful in how you manage people with different preferences in how they use technology and what IT they use.

New management skills for a new era

While there have been thousands and thousands of useful articles written to improve management over the last hundred years (including some of my blog posts), they all share a common flaw, they are based on skills needed for the past 100 years, not the next ten years (I think it is crazy to look beyond ten given how quickly things change). New technology, new business models, new employer-employee implied contracts, etc., have changed the workplace. These changes mean you also need to change to remain an effective leader.

Both business leaders and employees face new challenges as we deal with changing digital technologies. An Article in the MIT Sloan Management Review, The Three New Skills Managers Need by Monideepa Tarafdar, lays out the three core competencies managers will need moving forward.

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Partnering with digital colleagues

The first of these is the ability to manage algorithms and artificial intelligence as well as people. As Tarafdar writes, “Employees across a wide spectrum of industries will be working with what are, in effect, “digital coworkers” — algorithms that help them tackle a range of tasks such as answering call-center help desk questions, making financial investment decisions, diagnosing medical conditions, scheduling and running manufacturing assembly lines, and providing dashboard advice regarding important performance indicators. These digital colleagues will embody intelligence that evolves cognitively and learns continuously about the specific task it is applied to, by incorporating new solutions learned from experience and applying them to future problems.”

Putting the Terminator aside, there is a risk of algorithms disconnected from the reality of the phenomenon they represent, leading to incorrect solutions. It would not be optimal to maintain a team to oversee these digital colleagues; you would be negating the benefits. The human team would likely slow their digital partners or simply not be able to do the work, the reason it is being done digitally instead of by a person to begin with.

To prevent errors, however, leading to misguided actions (either directly by the process or decisions based on faulty conclusions), leaders need to retain their expertise and control over their tasks and processes just as you would over a human BI team. You need to provide context and recommendations for your digital employees, monitoring their decisions and actions and recalibrating when needed based on your experience, intuition and insights. Just as with human employees, you need to know when to agree, question, compromise and stretch your digital staffs

Becoming digitally mindful

Due to digital technologies, nine-to-five is becoming an obsolete workplace concept. It is much easier for people to work remotely and sometimes in different time zones. With people working remote, the reasons to abide by a 9 to 5 schedule are less compelling. There is also a higher probability you have people in different geographies, technology makes it easier to find the optimal partner. As Tarafdar writes, “current management mindsets still focus on the separation of work and nonwork time. Consequently, because managers find it difficult to establish boundaries between work and nonwork, organizations face the fallouts of “techno-stress,” technology addiction, and information overload. However, technologies will only increase in flexibility, richness, and seamlessness, and that will lead to their greater use at home for work and vice versa.”

The current skills based on managing work-home time does not account for the possibilities created by technology. Rather than staying with the current structure and simply forcing a balance, there are now opportunities to break from the old mold and create a better relationship. Again, to quote Tarafdar, “Managers should start thinking about cultivating a mindful relationship with the technology — one that embodies their individual preferences about what constitutes such flow. Rather than being troubled about work-home boundaries, which perhaps cannot be maintained in the future, organizations will need to support employees in managing the possibilities of flexibility. The paradigm should shift from conflict to flexibility, from technology detox to flow-driven use, and from the digital dark side to digital mindfulness.”

Developing empathy for others’ technology preference

Anyone who has tried to convince a colleague to go from a PC to a Mac, or to give up their Blackberry, understands how coworkers have different digital preferences. This also applies to how people use IT, some respond to emails at 3 AM while others only email at certain hours. Most managers have focused on the best technological solution for themselves and do not consider that employees or colleagues might have different needs and desires.

When people at a company clash on technology, it can often break down collaboration and teamwork. They may not share files (one uses Google docs, another uses Excel), they may not get each other’s communications (one focuses on emails, the other on texts) or they may miss appointments (one uses an Outlook calendar, the other uses JIRA), etc. Rather than forcing people to use solutions they are not adept at or comfortable with, managers need to act proactively to optimize productivity. Put people with the same preferences on the same team. Get tools that bridge the differences between preferences. The key is to be both flexible and thoughtful in how you respond to differences.

It is a new era

The key to leading into the next decade(s) is understanding things have changed. You need to adapt to adding managing artificial intelligence and digital algorithms to your skill set. You need to change from optimizing a common workday for your team to flexible schedules. You need be flexible and thoughtful in how you manage people with different preferences in how they use technology and what IT they use. Otherwise the successful leader of yesterday will become a failed manager.