“Extrinsic rewards (as presumed by the theory of self-interest) lead to poor performance in every situation except where (a) the rules are clearly defined and (b) the outcome is known in advance. The challenges we face are NOT this kind of problem.” ~ Joe Brewer, Cognitive Policy Works

In this video Daniel Pink discusses the “surprising science of motivation” and why the issues of today require people to be employed in meaningful careers (not just jobs) that are built on 3 principles of intrinsic motivation (a) Autonomy – the urge to direct our own lives, (b) Mastery – the desire to get better and better at something that matters and (c) Purpose – the yearning to do what we do in the service of something larger than ourselves.

I hope you will grant me the license to speak in general terms in order to make my point  . I am very aware of all the great businesses that have already discovered and started to incorporate Daniel Pink’s “Surprising Science of Motivation” into their strategies, but they are not the majority … and they should be.

The time has come for the way we do business to be a reflection of our own personal values.

But what do we value?

Ask an individual and they would probably answer family, freedom, community, friends, creativity.

Ask Daniel Pink and he would say we value autonomy, mastery, purpose.

Ask a CEO what society values and I believe their answer would be money and competition.

If we as humans have such a diverse set of values, why is it then that our economic system assumes we only have two?

My interpretation of Daniel Pink’s talk is that business today needs to update the motivation and innovation assumptions that were used to drive our economy’s phenomenal growth to be a better reflection of what we as people actually value.  The time has come for an economic mental shift from a focus on job creation to a focus on meaningful career creation.  This shift is the key to discovering the solutions to the complex societal challenges we currently face. This shift will create wealth (in all its wonderful forms) for all people.

We have reached a point in history where we can no longer afford to leave our society’s naturally inherent compassion and creativity untapped.

Time to Update our Economic System’s Motivation Assumption

The main motivation assumption used in businesses today is that people are best motivated by money. This is outdated and Joe Brewer from Cognitive Policy explains why. “Extrinsic rewards (as presumed by the theory of self-interest) lead to poor performance in every situation except where (a) the rules are clearly defined and (b) the outcome is known in advance.” ~ Joe Brewer, Cognitive Policy Works

The reason money as a reward leads to poor performance in most cases is because people are not one-dimensional.  We are multi-dimensional. We are motivated extrinsically, yes, but also intrinsically and transcendentally as well. How often have you heard someone say:

“There is more to life than just money.”

During the MBA we were taught to design carrot and stick incentive systems that forced the behaviour desired by Management. (And when I say Management, I mean Management as controlled by invisible shareholders, as well as an economic system that is held hostage by quarterly reports and forced into valuing short-sighted reactionaries higher than long-term visionaries … but I digress. Read “Is this Freedom?” for full version of digression)

My point is that within in the current economic system the majority of people cannot live up to their full potential because it is not in the best interest’s of Management to develop the gifts that are intrinsically and transcendentally inside of them. Daniel Pink sites Google as an example of a company that gives their employees 20% time.  This means one day a week individuals get to work on whatever they want. This has led to innovations such as gmail and many others.

I agree 20% time is a good start for existing companies. For entrepreneurs looking to start something new, I believe they should be launching businesses and designing business models that are fuelled by employee creativity and individuality 100% of the time. What I mean by this is  … don’t hire people into positions unless those positions are a reflection of who they are and what they are passionate about.  You will get more out of an employee if they’re more than motivated by just a paycheck.  If they believe in what you are doing and you are leveraging their strengths and gifts rather than forcing them to do what you want them to do then I believe Google type profits would easily be in your grasp.

The dead-weight and inefficiency I observed during my career was a function of people working solely for a paycheck. Businesses today need to create an environment that encourages people to explore, experiment and discover who they are. This will inspire people and the profits will come.  I guarantee it!

Time to Update our Economic System’s Innovation Assumption

In addition to an outdated motivation assumption, our economic system is driven by an outdated innovation assumption. Right now it is believed that innovation comes from individuals competing against other individuals. In my opinion, competition is a must in any system.

Unfortunately, when you separate it from collaboration and add manipulative marketing into the mix, what you end up with is useless innovation that adds no value to society. Yes jobs are created, but they are jobs for automatons and this leads to a world filled with depressed, dissatisfied, unhappy and unhealthy people because their work isn’t meaningful (watch for future post on my ideas for improving the healthcare system).

Pharmaceutical companies offer the perfect example of why this innovation assumption based solely on competition is outdated. Pharmaceutical companies spend more on how to cure erectile dysfunction than HIV/AIDS because the consumer for erectile dysfunction is rich and the main consumer for HIV/AIDS medication is poor.

Even more horrifying from a healthcare innovation perspective is that they also spend more money on marketing to manipulate people into buying their drugs than they do on Research & Development. There are those that believe the conflicted incentive system and complex patent system driving the healthcare industry have significantly delayed the discovery of cures for cancer and others (again … watch for future post on my ideas for improving the healthcare system).

The dynamics of the pharmaceutical industry prove that our economic system in its current state is not the best way to foster innovation that adds value to society and find solutions for the complex challenges we face. But they aren’t alone.

Our best and brightest minds are being lured to work at Proctor and Gamble in order to invent razors with 52 different blades or Goldman Sachs in order to use their intelligence to manipulate numbers and create money out of air. And who can blame them? We can’t all work at Google. Bottom line is …. Competition when separated from collaboration adds up to an economy that requires the printing of money to sustain itself.  Thank you China!

On the other side of the coin, the open source movement is challenging the theory of competition by developing excellent products and services using a collaborative approach. Rather than rewarding people with money, they tap into their internal desire to be a part of something larger than themselves.  Wikipedia is a good example of a pure open-sourced model that proved collaborators could also be innovators, but their model does face fund-raising challenges. This proves that collaboration on its own isn’t the path to the greatest innovation for society.

True innovation comes from the tension that is created when you are trying to compete and collaborate simultaneously.

If entrepreneurs could develop models that balanced competition with collaboration, the majority of innovation would be beneficial rather than harmful and useless. Think eBay. Trust is required for collaboration and trust flows through their competitive and highly successful model.

The Move from Job Creation to Wealth Creation

Our societal values have changed, but as with all systems business is slow to change. To accelerate the change I believe we need to actively challenge the system in its current state.

Capitalists use the one lone societal benefit of job creation as an excuse to maintain the status quo, but the jobs they have raced to create have left hidden a wealth of compassion and creativity inside the majority.

Don’t get me wrong. I am a capitalist and I have respect for the one-dimensional brilliance of Milton Friedman. I just believe that our system in its current state has served its historic purpose and is ready to evolve. It is great at creating jobs for the majority, but I believe it has the potential to create wealth and opportunities for all people. And I am not the only one.

The latest financial crash has created an amazing opportunity for new business models to emerge. More people than ever before are skeptical and starting to question the system in its current state. With the internet at our disposal we can connect these entrepreneurial-spirited people to create a movement to catalyze a sea change for business; a way of doing business that has rock solid values that are continually reinforced and strengthened by innovative business models … where the people whose blood, sweat and tears have gone into the business are empowered to make decisions … where creativity and passion are the fuel for the system, not money … where competition is held in check by never being separated from collaboration.

I had a quick grasp of the secret to sanity, it had become the ability to hold the maximum of impossible combinations in one’s mind. ~Norman Mailer

Let’s get sane! A sea change for business awaits. Humans are multi-dimensional and competition and collaboration aren’t mutually exclusive concepts.  If we tap into the hidden creativity that exists inside of everyone and then channel it into making the world a better place we can create opportunities for wealth and meaningful careers for all people.

The time for a focus on job creation has come to an end.

Wealth and meaningful careers for all people can be created by selfishly serving others.