Ideas Worth Spreading
I'm a big fan of Ted Talks. If you've never watched any of them, I highly recommend them. They'll get your mind spinning in all kinds of different directions. Who knows, you might just realize that all of those 'crazy' thoughts you've been having aren't really crazy after all. There's other people out there who feel just like you do! Oh, and by the way, they're highly regarded in their fields to boot!
This is one Ted talk that I watched about a week ago that I've just simply not been able to get out of my head. It's grabbed a hold of me and it just won't let go. I really feel like this is at the root of corporate America's issues - compensation structures. I'm going to ruffle some feathers here, I'm sure of it. However, when have I ever been known to really tone things back when it's something I believe strongly in? Tisk Tisk.
On the heels of another post I've just made, only this one not nearly as scathing, I felt I should explain why this struck me so. However, I don't think I'll be able to convey it successfully. Not by any stretch of the imagination.
I think about the compensation structures I've been a part of in the past. I'm not talking about the bi-weekly compensation structures here, I'm referring to the bonus plans. In all reality, I don't think I've ever once had one that's really made an impact on my work performance. They've always been paid out on a yearly basis and have always been so minuscule in the grand scheme of things that I've only really appreciated them when they came...and then they left and I didn't think anything of them to be honest. We're talking about a bonus structure that really only equates to an extra paycheck, or even two if it was a really good one. In all reality, would this make you work any harder over the span of an entire year?
Rather, I agree that currently, we life in such plush times (yes, even in the times of this Great Recession), that money isn't what we care about. At least, not the vast majority of us. Sure, we all want more of it, but for what? To be able to do the things we love doing in our free time. However, what good is all of that extra money if you're putting in all of that extra time to make the extra money!?
"In eight of the nine tasks we examined across three experiments, higher incentives led to worse performance."
This is a prime example of why I don't believe that incentives like bonus structures are a viable option in today's market place. We're no longer driven by money. We're driven by doing the things we love doing and the things we enjoy doing. When you start to put a price tag on these things, or dangle that ever present golden carrot in front of us, we're turned off! We shut down and become disengaged and disinterested.
London School of Economics - "We find that financial incentives can result in a negative impact on overall performance."
This isn't just some guy, drinking a beer in a bar coming up with this stuff either. There's real proof to back this stuff up. Most people would agree that Google is a pretty successful company. They seem to grasp the concept of this. Take his example of Wikipedia and Microsoft Encarta encyclopedia. That's about as point blank an example as you can get. People will excel at doing what they love, so long as they're given the right opportunity and the right meaning behind it.
"There is a mismatch between what science knows and what business does. And what worries me, as we stand here in the rubble of the economic collapse, is that too many organizations are making their decisions, their policies about talent and people, based on assumptions that are outdated, unexamined, and rooted more in folklore than in science. And if we really want to get out of this economic mess, and if we really want high performance on those definitional tasks of the 21st century, the solution is not to do more of the wrong things. To entice people with a sweeter carrot, or threaten them with a sharper stick. We need a whole new approach."
Yet again, we come back to this idea that the current models of corporate America are outdated. In this current digital age, I think I'm pretty safe to say that they're antiquated even. We've seen institutions that have been around for years, decades even, fail. Corporations that we thought were indestructible, come crumbling down at the whisk of a pen stroke. To me, it traces back to these old, antiquated notions of doing business based on how we used to do business. How our fathers did business and how their fathers did business. What motivated people in the industrial age, doesn't translate into motivation in the digital age.
"There is a mismatch between what science knows and what business does. And here is what science knows. One: Those 20th century rewards, those motivators we think are a natural part of business, do work, but only in a surprisingly narrow band of circumstances. Two: Those if-then rewards often destroy creativity. Three: The secret to high performance isn't rewards and punishments, but that unseen intrinsic drive. The drive to do things for their own sake. The drive to do things cause they matter."
This statement brings me to another video I watched previously about how schools destroy creativity. It's so spot on that it's frightening. It speaks again to the fact that we can't seem to move forward out of this industrial age mindset when it comes to teaching. Here we have a video talking about how we can't get out of the industrial age mindset in regards to our businesses and how we take care of our employees. Shortly I'll be posting up the video about schools and how they destroy creativity. I think you'll find it intriguing to see the links between the two.
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