People who care
If we look inside an organization (i.e. ignoring external things such as market strategy, access to capital, brand etc.) I think the most important factor for success can be linked to engagement. In other words, that a sufficiently large proportion of employees actually care. People who care tend to try hard to contribute whatever skills, knowledge, creativity etc. they may have available.
If we focus on product organizations (businesses that develop new products for a market) it is not so important to “make as much as possible as quickly as possible”, but rather to use creativity combined with customer insight and technology to gradually satisfy customers better and better. The task is to solve complex problems that require empathy and great cognitive capacity, but very little repetitive efficiency. Or muscle power.
Studies of commitment in the workplace appear at irregular intervals. “Only 20% of the workforce is engaged” is a quite common statement. We should probably take these alarming figures with a grain of salt, but there are many indications that there is great potential to be extracted here in many places.
It is possible to get people to work hard by rewarding this behaviour. Incentives work! Well, this is not always true. What Dan Pink conveys so brilliantly here is that rewards will only have a positive effect when the task is fairly simple. In other words, routine work or physical work. But when it comes to cognitively demanding (complex) knowledge work (as product development actually is) rewards will actually have a negative effect. What works for this kind of activities are intrinsic motivation that comes from genuine commitment, while extrinsic motivation (rewards) can displace the inner motivation and thus impair performance.
Dan Pink shows that intrinsic motivation depends on three factors: Purpose, Autonomy and Mastery. The trick is to pay people well, so that rewards don’t become an important (disturbing) topic. Then management only need to facilitate these three factors:
Purpose — must be something all employees have a relationship with. Why are we doing this? What are we trying to achieve? Here it is important that top management in particular is able to communicate the purpose in such a way that it is both credible and inspiring. Something people would like to be a part of. It must also be real, i.e. closely connected to the strategic goals of the business.
Autonomy — is what gives ownership. “This is our problem. It is up to us whether we succeed or not. If we fail, we have no one else to blame.” It’s about giving interdisciplinary teams real authority. This is an extremely strong driver for motivation and a sense of responsibility. In order to achieve this, it is crucial that management dares to let go so that the employees experience real trust. With this comes safety, so that it is no longer scary to take responsibility, with the risk of failure.
Mastery — triggers the good feeling of having achieved something good. A pride. If we can see with our own eyes that we are taking steps in the direction of something better, we are inspired to work further on developing both ourselves and the product we make. Here, it is important to work in short iterations with good analysis tools so that we can see frequent and real development over time.
This is possible to achieve — but requires that the management puts aside old dogmas about efficiency, control and reward and instead focuses on triggering responsibility, creativity and commitment.
There are several good reasons why so many management groups in Norway (and also in other countries) have adopted Tight — Loose — Tight as its preferred governance model. One of them is the strong support for inner motivation.
If you want to have interdisciplinary teams to self-organize and move by themselves instead of just following the plan, they must have a clear and distinct direction. This direction has to be Tight. When something is completed, we must be able to see whether we have progressed in the right direction and whether we have made a real improvement to the product. This is also Tight. The implementation itself can take place without strong management attention. Here we can let go and trust that people with strong inner motivation will find good solutions. This is Loose.
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