Successful entrepreneurs know that bringing their ideas to the most powerful reality is a function of building a team of the right caliber and with the right motivation.
Drive by Daniel Pink proposes a new model to develop that motivation and deliver far more than you can with purely monetary rewards. Daniel Pink argues that business is in the midst of a transformation, from a monetary-focused compensation model (Motivation 2.0) to one that relies on more intrinsic motivation (Motivation 3.0). Success unlocks exponentially improved performance – and organizations whose leaders and employees have tremendous drive are capable of amazing results.
If you doubt that we are in a non-monetary business revolution (and you should be skeptical – it’s different from what we learned), stop and consider which of the following two business plans you would have bet on succeeding in 1995:
- An encyclopedia developed by Microsoft, with PC market leadership, endless capital and the best executives that money can buy or,
- An encyclopedia developed by volunteers with no monetary system for development, quality control, sales or management
The winner was Wikipedia over Encarta (now defunct) because the motivation created for the participants unleashed resources money couldn’t buy… the story challenges our framework.
Why should we listen to Daniel Pink? He is a noted writer and researcher on the changes in the work environment brought on by the information age. He is also the author of New York Times best seller A Whole New Mind and a regular speaker to corporations.
The Author’s Big Ideas
- Business relies on monetary motivation far more than it should. For repetitive tasks, direct incentives are important (say for sales), but for creative projects you need to tap Motivation 3.0 drivers. Beyond this, all employees benefit from Motivation 3.0 to create passion and drive throughout the company. The author details two profiles for how employees see themselves, and what motivation is most effective.
Type X is extrinsically motivated: money and the things it buys are key drivers and they often regard getting more for doing less work as a win. Type I is intrinsically motivated and excelling in the work is the big reward: they see it as a plus to work longer since they learn more in the process and that is their goal. People in X mode can be managed to I mode and he discusses how. - There are three main components of a Motivation 3.0: Autonomy, Mastery and Purpose.
- Autonomy – For people to have true ownership of their actions and outcomes, they need control. This means giving them time as a resource. They need to pick the task, how they do it, who they do it with and when they do it. A great example is Google’s 20% autonomous time policy – engineers are encouraged to invest a fifth of their time in projects they dream up on their own. This accounts for half of Google’s new projects each year and if you have read Google news, use Gmail or many other services, you are a direct beneficiary of the policy – they were hatched by engineers with autonomy. 3M uses a 15% autonomy program and that led to the Post-it note.
- Mastery– This is a journey whose by-product is happiness (but hard work) for the individual and great results for their team. If you enjoy what you do and it has a purpose, you will work to steadily improve. The key is the mindset that your abilities are not finite but can improve (for more on this see Talent is Overrated). You will work hard to get better, and you will never reach perfection. The joy of excelling from mastery while always reaching for the next rung is a powerful driver.
- Purpose – Perhaps the most powerful is the sense of purpose. People become passionate about what they do if it gives their lives meaning. They want to be part of something bigger than themselves. In fact, they want to define themselves in the name of the cause. This is the most exciting area for growth in business because it has the opportunity to change the definition of a successful business. As more of our basic needs are met, we will see mission and purpose as increasingly critical to recruiting the best talent and partners. Purpose and profit are not mutually exclusive – they are becoming synonymous. (For an inspirational story on the power of purpose see Whatever it Takes).
- Managing 3.0 employees is not an annual review of what you did right and wrong. Rather, the author highlights examples of managers operating more like motivational coaches – meeting every 6 weeks to see how to support employees in realizing their goals and making sure that aligns with the organization’s objectives.
How to Apply This Book
Drive resonates both in the power of the new model and the change that it represents in the market. It is good news for entrepreneurs: by being early adopters in applying Motivation 3.0 you can tap the energy required to make your vision a reality. If you are an entrepreneur like me, you already operate this way. The real challenge is how to enrich your businesses with more of these values to achieve long term lasting change while still meeting your short term goals.
In one of our prior businesses, we made it our goal to help company founders get the most value for the companies they created. These are the heroes of the entrepreneurial world: they start companies with nothing but an idea and a vision. To be the organization that helps them get the best value they can when they exit is a galvanizing mission with far reaching consequences for the pace of technological advancement. Setting that goal also helped crystallize our priorities, leading to initiatives that weren’t money-making in themselves but were clear wins for our customers and our objectives. ( See The Seven Habits of Highly Effective People: Habit 6).
Today I meet more and more founders who are defining their organization around a social purpose and mission. Sometimes they are integral to the business and sometimes they are tangential but still clearly voiced: like Salesforce.com’s commitment to donate 1% of profits to charities. This trend is just getting started.
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Author: Daniel Pink
Who should read it: Entrepreneurs, Managers, Parents,
This review was first posted at VentureBeat’s Entrepreneur Corner
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Javier Rojas is a managing director at Kennet Partners, a private equity firm that invests in growth companies in Europe and North America. He has been reviewing the best business books for awhile, posting summaries of the authors’ big ideas on his blog and also monthly on Entrepreneur Corner at VentureBeat.
