How do I get my kids to read, to do well at school? How do I get my staff to do better work? How do I get people to support me, vote for me, and even volunteer for me? How do I get myself to stay in shape or lose weight?
Designing environments where people do things is the bedrock of our society. In a professional setting, it is essential in order to maximize efficiency, productivity, and/or innovation and often called human resource management. Go one step beyond management. “Getting the most out of people” or helping people reach and go beyond their potential is a common definition of great leadership. But great management and leadership are outputs; you know them when you see them. The inputs are more elusive. After going through the Stanford MBA program myself and $100K+ later, I can say with confidence that there’s still little clarity around what these inputs are! Although we’re still taught the core management “skills” like strategy, accounting, finance, etc., it’s now commonly argued that these have become commoditized; they can be obtained from an online course or manual. Good management and leadership are born elsewhere. After starting and managing an ostensibly successful nonprofit, I have some street-cred to confidently say I agree.
What if great management is less about the skills of the trade, being a good “people person,” or having a killer network? What if it’s more about design, the design of the “doing” environment? What if there were best practice design principles and processes that could be brought into any casual or professional work environment to get more out of people? Let me be more specific: What if there were design principles that either extracted more value out of a finite number of people or that tapped into a larger pool of human resources at the same cost? Although deep belief, personal commitment, and a knack for clear and compelling communication are undeniable requisites to effective leadership, I would argue that the primary driver of great leadership is great design: great designers of social systems!
What is your first reaction when you hear that people have given away without any compensation more than 100 million hours of their precious time to build Wikipedia? What is your reaction when you hear about software developers spending millions of hours coding massive new software programs for free? Let me guess: either complete shock or a glib dismissal of these contributors as losers without anything better to do with their free time.
Due to the recent societal phenomenon in which we only believe in fame, fortune and status—extrinsic motivational forces—as effective ways to incentivize work, we have collectively forgotten, for the most part, about intrinsic motivational forces that are equally powerful ways to get great work done. Intrinsic motivational forces include feeling competent and capable, feeling good (ethically and morally righteous), feeling entertained, and feeling appreciated and loved. A more colloquial way to summarize intrinsic motivations is the feeling of a sense of meaning and fulfillment. In fact, these intrinsic motivations usually are the most important to people. Repeatedly you hear the wise reminding us that what really matters are those things that reinforce you intrinsically rather than extrinsically.
We can shake our fists and get mad at the world and at ourselves, but let’s instead try to understand this phenomenon. In my version, there’s actually a happy ending. So why has this happened? Why have most of our society’s most powerful and important institutions collectively forgotten or dismissed intrinsic motivations? It doesn’t seem like a utility-maximizing way to organize ourselves.
Let me venture an answer. One of the main reasons I think this has happened goes back to the industrial revolution when most of the work became modulated, granular, and process-orientated, the work of armies of ants. It is difficult to harness the power of intrinsic motivation to get work done and, when human capital is not scarce or expensive, then it’s not worth the trouble. Extrinsic tools like a salary were used and relied on almost exclusively, and it worked so well that it became the gold standard. Most of the economy is still industrial, so I don’t expect people to dismiss this style of management altogether, although I don’t encourage it. However for those bumping into the future, the informational economy, where the most critical input or factor of production has become human capital (not physical capital like iron ore), we have had to get more innovative about how to motivate people. People have become in effect the only input in many professions (software development, consulting, finance, law, etc.) or the only point of differentiation in others (Toyota, Cemex, etc.). Market forces are requiring us to evolve our level of understanding and sophistication around motivation.
It’s not as intangible as you might think. You don’t have to be born a charismatic leader in order to unleash the advantages of an intrinsically motivated work force. You need to design it into your work environment. There are design tricks (principles and templates) to make that happen. Just ask Obama (we funded and organized his campaign and might also run his administration—see change.gov) or Google (we create the links) or eBay (we vet for quality—reputation system) or the film studios (through word of mouth we market their movies) or any successful social entrepreneur like Gandhi or Wendy Kopp. I could go on, but you get the picture. We are inclined to overvalue the importance of managers’/leaders’ vision and charisma and drastically undervalue their ability to design systems that tap into people’s intrinsic motivations to do much more or better work than any extrinsic motivational tool could ever do.
I am told that many studies have recently and conclusively shown that getting the most out of people, not surprisingly to any of us, involves making work interesting, rewarding, and fun. No longer will this be a luxury but rather a necessity for success in all professions, not just the citizen sector (NGOs, government, and education) where we also have done a terrible job overall. I’m excited and encouraged that the industrial period’s mode of human resource management is fading: that market forces are starting to evolve our society towards a more enlightened (higher level welfare or utility-maximizing) mode of management where our intrinsic motivations are no longer ignored. To succeed in this new paradigm, we need to put on our designer hats and sharpen our designer utensils!
Lloyd Nimetz founded the online giving market HelpArgentina.org. While pursuing his MBA at Stanford Graduate School of Business, Nimetz has focused on for-profit business models that address social challenges. This summer he will launch a payments platform for India’s bottom billion.