Leading@Google: Daniel Pink

Uploaded by AtGoogleTalks on 09.04.2010

Ilana Weiss: So hello, everyone. Welcome. My name is Ilana Weiss, and I work on the
Learning and Leadership Development Team here at Google.
And today, it is my pleasure to welcome Daniel Pink to the "Leading@Google" series.
Many of us are here today because we are big fans of Daniel's last bestseller, "A Whole
New Mind: Why Right-brainers will Rule the Future."
As Googlers who love data, we appreciate his use of hard science to drive his insights.
Daniel is an expert on economic transformation and the new workplace.
And his articles on business and technology appear in publications, including the New
York Times, Harvard Business Review, and Wired where he is also a contributing editor.
Dan jokes that he held his last real job in the White House where he served from 1995
to '97 as chief speech writer to Vice President Al Gore.
He also worked as an aide to U.S. labor secretary Robert Reich.
Today, we're also lucky to be among the first to hear from Daniel about his new book, which
just came out last week. And today it is Number 3 on the Wall Street
Journal list. And his book is called, "Drive: The Surprising
Truth about what Motivates Us." Please join me in welcoming Dan Pink.
Daniel Pink: All right. Thank you, Ilana, for that nice introduction.
Thanks to all of you for being here. It's great.
This is my first trip to the Google plex, and I think on the way out, I'm going to get
a haircut. [laughter] So it's really kind of cool.
I sank to Ilana this idea -- this kind of mobile haircutting place.
We actually have that in my neighborhood in Washington, D.C., but it's for dogs.
Because there was sort of roving dog-grooming places.
I said, "Oh, my God, I got to apply this to human beings. This is awesome."
Well, it is great to be here, and I'm actually really excited to talk about this new book
-- Drive: The Surprising Truth about What Motivates Us -- which is about the endlessly,
endlessly -- truly endlessly -- fascinating and interesting topic of motivation and what
motivates us and why we do what we do. But -- before we do that -- I just have a
quick question. I know that it's lunchtime.
Has anyone not eaten lunch? All right. Wow, a lot of you. All right.
Now, there's a smell of food wafting from the cafeteria down here.
Some of your colleagues are eating food. I bet some of you who haven't had lunch are
hungry. Anybody who hasn't had lunch hungry?
Pretty hungry. Who's pretty hungry? You pretty hungry? What's your first name?
>> John.
Daniel Pink: John. John is pretty hungry. You're pretty hungry, John. All right.
We're establishing that. Here you go. Can you come up here for a second, John? [laughter]
On the way over here, I went to Quiznos. And here's a sub and some Cheetos, all right?
Enjoy your lunch. [laughter] All right? You can sit down now, John. [laughter]
What did we just see there, ladies and gentlemen? We saw motivation right there, right?
John exemplified one of our drives that we have as human beings.
We have a biological drive, right? We eat to sate our hunger; we drink to slake
our thirst; we have sex to satisfy our carnal urges.
That is part of what it means to be human. No one would say "That's not part of what
it means to be human," right? But no one would also say that "That's all
it is to be human," right? Because humans are more complex than that.
So let's try something else here. [pause] Martin -- hang on a second, Martin.
Now, we know -- this is for this little YouTube video series, "Leading at Google."
And so, Martin, if you come up here right now and hold this book to that camera for
30 seconds, I'll give you ten bucks. All right. [laughter] All right. Martin's
psyched. Okay. Hold it right there. All right.
I want to get my money's worth -- 30 bucks -- I mean, 30 seconds, all right?
So we're at like 15 now? 14, 13, 12, 11, 10, 9, 8, 7 -- look interested
in the book please -- [laughter] 6, 5, 4, 3 -- a little thumbs up sign -- 2, 1.
Thank you, Martin. All right, don't sit down. Can you hold this for a second, Martin?
Let's hope I have ten bucks.
Martin: I'll take 20. [laughter]
Daniel Pink: Here you go. Here's ten bucks. Martin, thank you. All righty. Here you go.
Give Martin a hand -- round of applause.
Daniel Pink: Now, ladies and gentlemen. That's also motivation, right?
That's another form of motivation. Human beings respond exquisitely to rewards
and punishments in their environment. You reward something, you typically get more
of it. You punish something, you typically get less
of it. I mean, it's a shame that we couldn't show
Martin's face on this screen. Because when I said, "If you come up here,
I'll give you ten bucks," Martin's -- I mean, I'm not joking around -- and I'm assuming
Martin is not like woefully underpaid, okay? [laughter] Maybe he deserves to be, but he's
not. Martin's -- I'm not joking around here --
this is true. Martin's eyes widened.
It was like, "I'll give you ten bucks." Martin's like -- Oh! -- and he's out of his
seat ready to stand up there. Now, Martin, have you and I ever met?
Have you and I -- have you ever read -- have you read this book?
No. So here's Martin -- for ten bucks, Martin's willing to come up in front of his peers,
on to a TV camera, and hold up -- for 30 seconds -- a book he's never read, by an author he's
never met -- all for ten bucks. Money's a powerful motivator.
Carrots and sticks are powerful motivators. But that second drive -- to respond to rewards
and punishments in our environment -- is obviously part of what it is to be human.
But, it's not All that it is to be human. No one would ever say that's all we are.
We have other drives too, right? We have the John drive -- the biological drive.
We have the Martin drive -- the reward and punishment drive.
But we also have a third drive. We do things because they're interesting.
We do things because we like to do them. We do things because we're curious, because
we want to learn, because we want to make a contribution.
That is also part of what it is to be human -- that third drive to do things for their
own sake, because they're interesting, because we get better at them, because they advance
some kind of purpose. Now, does that make sense? We have those drives.
And for those of you who -- actually, there were a handful of you who looked a little
skeptical at that claim of this third drive. And for you, let me ask the following question:
If you're skeptical of the existence of this third drive -- what are you doing here?
No, I mean that. What are you doing here? Here in this hour that we're going to spend
here at this little session? It's a very, very attractive audience, full
of attractive people, but my guess is that in the next 45 minutes, no one is going to
find a mate, okay? So it's probably not going to answer your
biological urges being here. Second, except for Martin, no one's making
a buck here in the next hour, right? So why are you here?
You're here because you're curious. You're here because you want to learn.
You're here because you're part of a community. You're here because you're going to engage.
That third drive is fundamental to what it is to be a human being.
The trouble is -- and I think that you should be grateful -- I mean, I think that you should
be grateful working here. The trouble is that, in many businesses --
Google being the exception in many ways -- many businesses treat human beings as if
that third drive doesn't exist, and that the second drive is what it's all about.
So that the way that they architect the systems in their company -- the way they architect
the compensation schemes -- the way they architect their human resources policies -- is really
built around carrots and sticks, around "if-then" rewards, "if you do this, then you get that."
And here's the thing -- and for this book, I looked at -- and I'm grateful to Ilana for
mentioning that a lot of the books that I write are very much grounded in the science.
I looked at 40 years of research -- 50 years of research in the field of behavioral science
-- huge numbers of experiments by economists, by sociologists, by psychologists about what
really motivates us. And what is clear from this 40 or 50 years
of research is that those "carrot and stick" motivators -- those "if-then" motivators
-- "if you do this, then you do that" -- they work.
They work really, really well. But they only work in a surprisingly narrow
band of circumstances -- a surprisingly narrow band of circumstances.
And that -- for many things that we do, and much of the work that you do here -- those
kinds of motivators -- those "if-then" motivators -- don't work.
In fact, they often do harm. So let me try to lay out some of this case
to you, because the research on this is absolutely fascinating.
And so much of the research on human motivation is counterintuitive.
We have this notion that human beings are these purely mechanistic creatures -- that,
if you simply push the levers the right way at the right time, people will do what you
expect them to do. And that ain't true.
We're a lot more complicated than that. Let me give you some experiments, because
experiments are totally cool. I mean, I don't want to, it's warm in here.
I don't want to empty the room by reciting all 40 years of research.
But some of these studies are totally interesting and cool.
My clicker is in my pocket. That sounds like -- "My clicker is in my pocket"
-- that sounds like a euphemism, doesn't it? [laughter]
[pause] My clicker is in my hand -- which also sounds like a euphemism. [laughter]
Where was I? Oh, yes. We're talking about the science. Okay. It's
cool. Let me tell you about some experiments, because
these experiments are really, really interesting. And they're really, really surprising.
So, let me tell you about one experiment that comes from the mean streets of Cambridge,
Massachusetts. All right? At the Massachusetts Institute of Technology,
MIT. Very interesting piece of research done by
some economists there. Some economists at MIT in collaboration with
some -- an economist at Carnegie Mellon and at the University of Chicago.
So really -- not only the mainstream of the economic profession -- but in some ways sort
of the 'elite' mainstream of the economics profession.
They did this really interesting study. They gave these MIT students a series of challenges
-- a series of games and other kinds of tasks to play.
Some physical tasks -- "Can you throw a ball through a hoop?"
Memorizing strings of digits, solving complex conceptual puzzles -- a whole set of challenges.
And they said, "We're going to incentivize you.
We're going to incentivize you and reward you based on your performance.
So if you do reasonably well, you get this small monetary reward.
If you do medium well, you get a medium monetary reward.
But if you do really well -- if you're one of the top performers -- you get a sizable
monetary reward." Okay? The classic kind of motivational scheme.
Now, what happened? Let's go to the videotape. Or -- it's not
videotape -- but let's go to this. As long as the task involved only mechanical
skill, bonuses worked as they would be expected: The higher the pay, the better the performance.
Nothing surprising about that, right? Here's where the surprise comes.
But once the task called for even rudimentary cognitive skill.
Look at that phrase again -- "rudimentary cognitive skill" -- and in an incredibly innovative
act of right-brain thinking, I made it red. In a rudimentary cognitive skill, a larger
reward led to poorer performance. Now, that's kind of weird isn't it?
That's not the way it's supposed to work. You know -- if you want more of something,
reward it. But that's not happened here.
So they say, "This is weird. What's going on here?"
So they test the assumption. Maybe giving 50 bucks to a student in MIT
isn't sufficiently motivating. So let's take the same experiment and do it
somewhere else. Let's do it in Madurai, India -- rural India,
where the standard of living is far lower, so a reward that's modest by American standards
is going to be more impactful. Same deal -- small rewards, medium rewards,
large rewards. Same set of tasks.
Here's what happened this time. People offered the medium reward did no better
than people offered the small reward. But this time around, people offered the largest
reward -- they did worst of all. Here we go. In eight of the nine tasks we
examined across three experiments, higher incentives led to worse performance.
This is strange. This is not what I learned when I studied economics.
This is not the way it's supposed to work. This seems to defy some of the laws of behavioral
physics. This seems -- in its own way -- vaguely leftist
and socialist to me. It sort of undercuts certain tenets of capitalism.
Okay? But who spots -- first of all, these are done
by economists. Let's look at the socialist organization that
sponsored the research -- Federal Reserve Bank.
So this is the mainstream of the mainstream. Top flight economists sponsored by the Federal
Reserve saying, "Higher incentives can lead to worse performance."
Here's what's interesting about this. We think that if you reward something that
you want, you get more of it. And that is not always the case.
And particularly for creative, conceptual tasks, that is actually rarely the case.
If you offer an "if-then" incentive for a kind of conceptually-challenging complex task,
people routinely perform worse. This is actually so clear that it's hardly
even controversial in the world of behavioral science.
It's hardly even controversial. We see it over and over and over again.
So let's talk about -- that's "rewards" -- let's talk about "punishments".
Because punishment is actually a very powerful motivator as well.
And punishment is much more predictable. So let's go from the mean streets of Cambridge
to the country of Israel. And let's talk about some day care centers
in Israel who had a problem. Day care centers in Israel -- the chain of
day care centers -- they noticed that some parents were coming up late to pick up your
kids -- their kids. You had to come and pick up your kid by 4
p.m. Some parents were coming late.
So how do you disincentivize people from showing up late?
What would you do? Charge them! Exactly. You charge them.
You impose a fine; you impose a penalty. Absolutely right. Common place practice.
So that's what they do. They say, "You know what? People are showing
up late. That's wrong. We're going to stop this behavior.
If you punish something, you get less of it." So they put up this sign, "Announcement: Fine
for Coming Late. As you know, the official closing time is
4 o'clock. Since some parents have been coming late,
we -- and of course, with the approval of the Authority for Day-Care Centers in Israel
-- have decided to impose a fine on parents who came late to pick up their children.
As of next Sunday, a fine of ten Israeli shekels -- about $6.00 U.S. -- will be charged every
time a child is collected after 4:10." So it's every child -- many people have more
than one kid there -- every child, every instance, you're paying a fine.
This fine will be calculated monthly. It is to be paid together with the regular
monthly payment. Sincerely, the manager of the day-care center."
So of course, tell me your first name. Patsy? So of course, Patsy said -- had the same instinct
that I had -- you wanted to turn this behavior -- charge them for it! And of course, when
you charge them for it, what happens, Patsy? After the introduction of -- sorry, Patsy
-- that was kind of a rhetorical question. [laughter]
After the introduction of the fine, we observed a steady "increase" in the number of parents
coming late. The rate was finally settled at a level that
was higher and almost twice as large as the initial one.
So you impose a fine to deter bad behavior and the consequence of the fine is, you get
"more" of the bad behavior? And then what happened?
You double the rate of bad behavior, and then, when you withdraw -- I don't have this in
there -- when they withdrew the fine, what happened?
The incident -- no! -- it didn't go down! The incidents of lateness stayed up.
You did permanent damage. Now, this is -- seems on the surface as we
think about things. If we think about human beings as these purely
mechanistic creatures, it seems inexplicable. But Patsy, seriously -- how would you explain
this result?
Patsy: Well obviously we said it's OK to come late if you pay this extra amount of money.
So people who couldn't make it there on time thought, "Oh no big deal I'll just pay this
money and show up late".
Daniel Pink: You said, "It's no big deal to show up late, I'll just pay them money."
Why were people showing up late -- why were most people showing up on time in the first
place under the earlier regime?
Patsy: They didn't think they had an option probably.
Daniel Pink: They didn't think they had an option?
What is another reason you think they might have been showing up on time?
Social convention? Okay. What else? Guilty? Shame? They liked their kids? [audience
laughter] They didn't want their child to sit on the
street. Here's the thing -- okay, this is good.
Their relationship with the caregiver was not a purely economic, market relationship.
They want it to be fair to the person -- and not just any person -- the person caring
for their children. So, they had a social obligation -- social
convention. I would even -- I would see your "social,"
and raise it -- "moral." That is, they have a moral obligation in some ways.
They have a relationship, and that encouraged them to -- that's why they actually -- most
people actually -- complied with the rule. But when you -- what it did is, it shifted
this out of the social realm into the market realm and it became nothing more than buying
-- it became similar to buying the bag of Cheetos I got for John, all right?
"Hey, I want three bags of Cheetos." Open up your wallet; buy three bags of Cheetos.
And so, human beings are not that mechanistic. We do things for other reasons.
We do things because they're good and because we care about other people and because we
want to maintain that relationship. So when you look at the science, it actually
calls into question a lot of what we think about human beings.
And so, here's the gist of it. Let's talk about -- we're going to talk about
how this applies to work, but let me just give you, in some ways, the "thumbnail sketch"
here. If you want people to do work that is routine,
that is rule-based -- I can use this word here -- you want people to do work that is
"algorithmic," okay? Where you are -- this is the only place on
the planet where you can say the word "algorithmic," and a third of the audience smiles in response
to that one word. [audience laughter]
It's almost this Pavlovian nerd instinct [audience laughter].
"Algorithmic" -- woe! If the work is "algorithmic" -- that is, there's a set of rules, a process
that you follow, a clear set of steps that leads to a single conclusion -- the carrot
and stick motivators are excellent for that kind of work.
They're really good. For work that's not especially interesting,
carrot and stick motivators are pretty good. One of the dangers of carrot and stick motivators
is that they can sometimes dampen or even extinguish people's intrinsic motivation for
a task. But if there's no intrinsic motivation to
extinguish, then, you're not taking a big risk.
So for tasks that are simple, tasks that aren't especially interesting, tasks where you want
a short-term result -- carrot and stick motivators are awesome if you want short-term results.
Awesome. You get the Martins of the world leaping out
of their seat for ten bucks, instantly. Uninteresting -- not particularly interesting,
not especially complicated, short-term -- they're awesome.
But here's the thing -- how much of the work that you do at Google is "not especially interesting,"
"not especially complicated," and "only has short-term results?"
Maybe some portion of it, but the vast majority of what you do is actually reasonably interesting.
It's actually quite sophisticated and complicated and conceptual.
And you actually want the results to endure for a long time.
And for those kind of work -- these contingent "if-then" motivators simply don't work.
There's 40 years of science that says this. And the danger is -- or at least from my perspective
-- is that the science hasn't migrated to the business world.
That many people -- I think this company is an exception -- many aspects of the business
world, many institutions in the business world, are basically operating on notions of human
motivation that is rooted in folklore, not in science.
But I think if you listen to science, you can run your companies in a fundamentally
different way. And there's some cool examples of how to do
it differently. So, let's talk about how to do this.
Number one -- money is a motivator. Money is a motivator. We saw it with Martin.
Money is a motivator. But money is the motivator in slightly different
way than we think. The gist of it basically is that, for money
to be a motivator, you got to pay people enough. If people aren't being treated fairly, if
people feel like they're being compensated inadequately, if they feel like someone in
the adjoining office, the adjoining cube, is doing similar work, or isn't as good --
is getting paid more than them, you don't have motivation.
That is a motivation sinkhole. If people can't support their family, this
notion of a "third drive," is nonsense. Okay? But once you pay people enough -- in fact,
once you pay people a little bit more than enough -- what you do as a motivator is, you
take the issue of money off the table so people can focus on their work.
That is the best use of money as a motivator -- to take the issue of money off the table.
Now, after the fact, profit sharing, even stock options -- those are less corrosive.
It's very difficult for any single one of you to game -- to basically -- I hope it's
very difficult for any of you to single-handedly game the Google stock price.
I hope that's true. You might be smarter than I give you credit
for, but I hope that's true. So after the fact, it's not so bad. But contingencies
are bad. Pay people enough so that they don't think
about money, they think about work. What else can you do?
Well, there are three components that science shows us that really lead to effective, enduring
motivation, especially for complicated, conceptual tasks.
They are: Autonomy, Mastery, and Purpose. Autonomy, Mastery, and Purpose.
Autonomy, Mastery, and Purpose. Let's start with "autonomy," which is in some
ways the first among equals. We want to be self-directed. You want to direct
your own lives. That is human nature.
There's a notion out there -- in companies not like this one -- that if human beings
were left alone without the threat of a punishment, without the dangling of a carrot, people would
do nothing. This sort of the "lump" view of human nature.
I'm serious -- Oh, there are plenty of people who believe this.
Plenty of people who believe that if people were not threatened with a punishment or enticed
with a reward, they would just sit there and do nothing.
Now, what's curious about this is that no one ever believes this about him or herself.
They only believe it about other people. And I think it's wrong.
I think that is not human nature -- that human nature is to be active and engaged.
That is -- let's use a computer metaphor here -- I think that being active and engaged
and curious? That is our default setting.
That is our default setting, okay? When the product ships, when the box ships,
that's the default setting -- to be active and engaged.
And any of you have kids or have seen kids -- I have yet to see a 2-year-old who's not
active and engaged. I have yet to see a 4-year-old who's not active
and engaged. It is manifest as day that that is our natural
state -- that that is our default setting. Now, I've seen plenty of 14-year-olds and
34-year-olds and 44-year-olds who are not active and engaged -- who are passive and
inert. But looking at that doesn't mean that's their
natural state. What it means is that the default got changed
through a whole set of experience. But if we awaken that default, I think great
things can happen. And I think you guys have done actually --
in many ways -- a masterful job of that. Truly, masterful job of that.
And I've said that in venues other than this one. [audience laughter]
Just for credibility's sake. I mean, I used to work in politics before
I chose the equally noble calling of writing business books. [audience laughter]
And one person in politics -- actually, a legendary political consultant -- we were
in a meeting -- legendary political consultant -- we were in a meeting, and he leaned over
to me and he said something sort of kind of unctuous cloying to the person in charge.
And he leaned over to me and almost in a staged whisper he said, "In politics, you can never
pander too much." And I think that's true in politics. I don't
think that's true here. So, my credibility is that I've said this
other places. But let's not talk about you.
Let's talk about some other cool places -- cool places that might yield some lessons
for this equally cool place. Let's talk about this company, yes.
This company -- Atlassian. Atlassian -- Australian company.
Software company. Obviously much smaller than Google.
Atlassian. Has some offices in San Francisco along with Sydney.
They do something really cool. Once a quarter, they say to their software
developers, "You can work on anything you want for the next 24 hours."
It starts usually Thursday at 2:00 in the afternoon.
Starting now, you can work on anything you want, as long as it's not part of your regular
job. You can work on it with whomever you want.
You can work on it the way you want. You can work on it wherever you want.
The only thing we ask is that, at the end -- at 4:00 on Friday -- you show what you've
created to the rest of the company. Okay? But not in this kind of star chamber, American
Idol kind of setting. But in this kind of -- no seriously, it's
like kind of a -- it's sort of like, I don't know, are TGIFs fun here? They are.
Okay, so it's sort of like the poor man's TGIF, where you show the results to the company
at the end of those 24 hours. They have beer and cake and other kinds of
things like that. I guess "other kinds of things like that"
would be carbohydrates. They call these things "FedEx Days." Why?
Because you have to deliver something overnight. [audience laughter]
Little Australian humor. Well, it turns out that this one day of intense,
undiluted autonomy has produced this whole array of software fixes -- a whole array of
ideas for new products -- that had never otherwise emerged.
Now, this was not a contingent motivator, "if you do this, then you get that."
This is basically leaving people alone, saying, "Do something cool if you feel like it," and
getting out of their way. One day of intense autonomy produced these
things. And they have actually then raised it --
which is something much more familiar to you -- I don't even want to talk about it here.
Which is, they now -- because of the success of "FedEx Days" -- they now do 20 percent
time. So, FedEx Days turned out to be kind of this
baby step on the way to 20 percent time, which you obviously do here.
And for those of you watching at home who don't know about 20 percent time.
20 percent time down here at Google -- some people can spend 20 percent of their time
-- although no one ever hits that mark usually -- 20 percent of their time -- working on
anything they want, and Google keeps the IT rights. [audience laughter]
Give you another example of this, because here's the thing that's really important to
me personally just as a human being. This is not reserved only for people who are
doing high-level sophisticated work like you are, okay?
This urge for autonomy and self-direction is a human urge.
And it's possible to infuse this in all kinds of jobs -- in all kinds of work.
And let me give you an interesting example of this.
Let's take call centers. Let's take call centers.
Has anybody ever worked in a call center? Okay, right back -- you work in a call center.
Right there. You with the glasses. Tell me -- oh, it's an early call center here,
so we don't want to talk about that. How about a less-evolved call center?
Anybody? Oh yeah, you worked in a call center. Tell me what it was like. How long ago was
Man: Ten years ago, I supported systems for Amazon.com's call center.
Daniel Pink: I don't want to bring in another brand here.
No, but -- yeah, okay. So tell me, what was it like working at a
call center? Describe the physical setting.
It doesn't have to be where you said it was, but just in general.
You're packed in. You're always visible. Ooh, that's a nice way to put it. You're always
visible to somebody. So it's basically a warren of cubicles, hamsterlike
cubicles. You had a headset on? Headset on.
You're always visible to somebody -- that's an interesting way to put it.
Were your calls monitored?
Man: Oh yeah, the manager wanders over and sits down and just start listening.
Daniel Pink: Sits down and starts listening. And were your calls timed?
Man: Oh yeah.
Daniel Pink: Okay, how long did you stay at this job?
Don't say the name again! [audience laughter] Yeah, it's a high turnover job -- six months
is long. That's exactly right. Tell me your first name?
Man: Benji.
Daniel Pink: Benji? As Benji says, it's a high turnover job.
You did a brilliant job of describing it. It's like, you're sitting there in a hamster
cage with your time monitored, your voice being listened to, and people are not calling
to see how you're doing. They're calling because they're a little bit
miffed about this, that, or the other thing, right Benji?
So you know what the turnover rate is in this? In a typical -- in the call center industry?
Annual? About a hundred percent. I mean, think about that for a second.
It'd be like if you came back here a year from now, on average, it'd be a totally different
group of people. I mean, that's basically, essentially treating
human beings like lightbulbs. "Oops, a lightbulb burnt out. Go to the closet;
get another one. [special emphasis] 'Screw' it in." [audience
laughter] Now, there's a notion out there that this
kind of job is sort of inherently soul-hollowing -- inherently deadening -- but that's not
the case. So let's talk about a different way.
How could you do this a different way? Well, talk to the good folks at Zappos, okay?
Talk to the good folks at Zappos. Here's what Zappos does -- trains their call
center representatives over two weeks. "Here's our policies. Here's our values.
Here's our approach to customer service." And then, they do something totally cool and
just kind of wacky -- bizarre -- in motivational terms.
They say, "If, at the end of those two weeks of training, you don't want to work at here,
I'll give you $2,000." Isn't that? I don't even know what to call
that. You know what I mean?
I mean, I -- seriously, I don't know how to describe -- it's like a negative carrot or
something like that. And then, they go and they take their jobs
as call center representatives and here are their instructions: "Serve the customer. Solve
the customer's problem." That's it. "Do it the way you want. If it
takes you one minute, great. If it takes you one hour, no problem."
Now, of course, they get feedback from customers to make sure that they're being treated well.
What happens? Zappos comes out of nowhere to be one of the
highest customer-service-ranked companies in any industry in this country -- higher
than the Four Seasons. Okay? Taking this job that we think is inherently
deadening, infusing it with some autonomy, boom! People perform, because we're not innately
passive and inert. Let's talk about mastery.
Mastery is a second urge. Mastery is our desire to get better at something,
particularly better at something that matters. It is a fundamental human impulse.
It is so powerful that people do things that seem economically irrational. Okay?
Let's talk about economic irrationality, and let's talk about open source.
Now, open source in economic terms is very weird, okay? And we forget that.
We're so kind of anchored in the present, we forget that.
So if you go back say 15 years or 20 years and if you described open source as a business
model to anybody -- particularly an economist or a business school professor -- they would
think that you were high. I mean, I just ima -- can you -- I mean, imagine
-- "Oh, I got this great business model." If it's 1995, "Hey, I've got this great business
model. Here's what it is: People will work to create
software." Okay, 1995 -- the year of Window's '95, right?
And those of you who remember. You remember when Windows '95 came out.
It was like huge news, okay? "But you know, I think there's another model
out there, and here's how it would work. You got these people -- these really technically-skilled
people who fetch decent wages in the labor market.
And what they do is, they volunteer their labor.
They work really hard for free. And then, wait -- it gets better.
Then, they give away their product. You with me? This is going to be awesome."
I don't think you could -- I mean, you could go down to Menlo Park or any venture capital
firm, or any economist or anybody who thought they knew anything about business, they would
say, "Uh, it doesn't quite work that way. That seems actually vaguely delusional to
think that it could." You look at something like -- what's curious
about this is that, they're wrong. It does work -- Linux.
It does work -- Apache. It does work -- reasonably well -- Wikipedia.
Wikipedia. You realize that Microsoft who created Encyclopedia, vaguely around the same
time as Wikipedia, had all the right incentives -- all the things that economists at business
school professors would tell you to do. Encarta is out of business.
Wikipedia is the biggest encyclopedia in the world.
That seems to have sort of almost sort of biologically impossible 15 years ago.
And yet, that's what it is. So what's going on? Why are people doing this?
Think about motivation. Think about mastery and open source from the
employer's perspective. Here you have technically-sophisticated people
doing demanding work for decent wages. But their urge for something is so deep that
they spend their discretionary time doing equally -- if not more -- challenging work
for someone else for free. Think about being the employer.
You say, "What am I missing? What am I not providing?" That economist asks,
because this is a very curious puzzle. They asked the question, and here's what they
find out: The biggest motivator is enjoyment-based, intrinsic motivation -- how creative people
feel while working on the project. That's what it is.
People are looking for challenges. They're looking to get better.
They're looking for mastery. They're looking for engagement.
You see this over and over and over. Another example.
Just to go to even -- this is percolating to the mainstream in a place like Harvard
Business Review. Harvard Business Review has a story in the
January issue -- good piece of research -- about what motivates people at work.
Long, multiyear study of what motivates people at work where people kept very extensive time
diaries over several years to report how they were feeling, to report their subjective well-being.
Over the years, they find this -- there's one motivator above all.
One motivator stands out well above anything else.
And here's what it is: Making progress in one's work.
Making progress -- that was the biggest motivator for people.
Making progress. And the really good managers out there are
managers who recognize this. Who recognize progress.
Who say, "Wow, yesterday you were here, today you're here."
Who help people who honor that. Who respect that.
Who help people move toward that. Making progress. What about incentives?
Here's what the Harvard researchers say. The key to motivation doesn't depend on elaborate
incentive systems. In fact, the people in our study rarely mentioned
incentives. Making progress is the biggest motivator.
Finally, last but not -- oh, let's skip that -- last but not least.
Last but not least -- Purpose. Purpose. We want to be part of a cause larger
than ourselves. That's part of what it is to be human.
We perform at a higher level sometimes when we're animated by some kind of bigger purpose.
We perform at a higher level when we feel like our contributions to teammates actually
creates something bigger than we could create ourselves.
Very, very powerful motivator. And "purpose" -- I think more broadly --
is becoming an enormous animator of effective business today.
And you see that here. You know, your mission what -- is "to organize
the world's information," right? So that people can -- what's the rest of it?
Say again? So it's universally available. Organize the world's information so it's universally
available and -- useful. Okay.
This looks like it's sort of a surprise to some of you, which is alarming.
[audience laughter] But trust me. Check your website.
That's a big, transcendent purpose. That's not -- that's not -- think about that
purpose. That is not profit maximization.
That's not a purpose. That is not even the light and engaged customers.
It is at a higher order of magnitude than that.
It is about some kind of transcendent purpose. And what you see here more and more among
effective businesses is that, we have the profit motive.
The profit motive is a good thing. The profit motive is actually a really good
thing. The profit motive is one reason why we have
such a high standard of living. I think the profit motive is good.
It's not universally, permanently, you know, unequivocally good, but I think the profit
motive is good -- good in the sense of effective and actually good in the sense of moral in
its own way. But, the profit motive is not the only thing.
And what's happening now more and more is that, if you want really talented people to
come work at a place, you got to have a bigger purpose, okay?
Maximizing shareholder gain is not going to get a lot of people up in the morning.
It's not going to say, "Wow, I'm going to do something really cool.
I'm going to like --" If you have a mission of maximizing shareholder gain, I don't think
you would have that groovy thing that Ilana just showed me Aned's globe, right?
That's unbelievable, okay? If you're animated by profit-seeking, you're
not going to get that kind of stuff. You're not going to get the cool stuff.
And so, what I think's going on right now is that, the profit motive -- in order to
be effective, but also to be good in a deeper sense -- has to be anchored in some way to
the purpose motive. That when the profit motive becomes unmoored
from the purpose motive, sometimes bad things happen, but also, it's less effective.
It's really less effective. And I think that we see this in the high-performing
organizations today. And I'll give just one quote from a venture
capitalist -- an investor. He says, "Today you have to have a purpose
bigger than your product." You have to have a purpose bigger than your
product. And I think that's a lot of what you're doing
here. I think it explains your success.
So it's a delight to be with you, because I think in many ways -- not in all ways --
but in many ways, your purpose is bigger than your product.
In many ways, you have people in this place who have the privilege of being able to move
toward mastery. And you actually have a more autonomous, self-directed
environment than in most places. And I think that's the recipe -- not only
for a great company -- but I think it's a recipe for a good company.
And so, my hats off to you. So let's take some questions. Yes.
>> [inaudible]
Daniel Pink: Yeah. [pause] Yeah, "How would you frame the behavior of
the financial industry in response to these things?" It is pretty clear.
This goes back to the utterly shocking slide that I put up there that money is a motivator.
Okay? If you give people -- one of the dangers of
carrot and stick "if-then" rewards -- particularly if they're short-term and high stakes --
is that some people, many people, will take any route there, even if it means cheating.
There's no question about that. And that's some of what we saw.
The other thing is that people become myopic in the sense that they don't see the long-term
consequences of it. And they don't care, even if it's against
their own self-interest. So you bundle up a package of securities based
on essentially fraudulent -- not in the legal sense -- dicey, let's say "dicey" mortgages,
and then pass it off to somebody else. Short-term, all is good.
Long-term, you could be caught in the total downdraft of this whole economy.
So it forces us to be myopic, and it also gets us to be very -- it narrows the breadth
of our thinking as well. So you actually become in some ways less creative.
So I think that, in many ways, the financial crisis -- an element of it -- shows you what
happens when it's all carrot and stick -- or it's all "carrot" -- and when people have
-- and especially short-term. And the short-term thing is actually really
important, because if the payoff is only short-term, people will respond to that.
There's pretty little question about that. Now, let's go more broadly.
Let's talk about executive compensation here for a moment, because I think it's a slightly
-- it's a sort of connected issue. The thing about executive compensation that
I think actually does verge on fraudulent -- and not in the legal sense, but in the
sort of a moral sense -- is that a lot of executive compensation isn't even an "if-then"
incentive. Here's what it is.
If you're an executive -- a high-level executive -- and your company does well, you get a
huge amount of money. If you're an executive and you run your company
into the ground, you get a huge amount of money.
So it's not even like an incentive as much as it is an entitlement in that regard.
Now, there's also this talk out there that you hear in the financial industry -- "Hey,
if we didn't pay these outlandish salaries, these people wouldn't work here."
Right? You've heard that. Okay? I actually think that's a very interesting
research question. Let's try it, okay? [audience laughter] I'm
serious. Let's try it. Let's see what it is empirically.
You're making a -- it's an interesting hypothesis. Let's test it empirically.
I actually think that you'd get a lot of talented people going to jobs that pay a half million
dollars a year even if two years ago they paid $3 million a year.
So I think there's a lot of -- you know -- it's somewhat irritating because of the
-- it's more than somewhat irritating -- it's extremely irritating because of those
kinds of factors. Yes, sir.
>> [inaudible]
Daniel Pink: Yeah. Yeah. If you force caps on CEO pay, you take away
that person's autonomy. You mean, sort of government caps.
Yeah, I think you're right about that, actually. And I think that that is sort of imposing
a solution to this from the top down is not going to work.
Because all -- it's sort of squeezing a balloon. And so, what people are going to come up with
"work arounds" around. You saw this in the early 1990s when they
put a -- sort of a supertax on executive compensation above the then-lofty figure of 1 million.
And so, what happened is that everybody put their regular compensation at 1 million and
then found other ways to compensate people that were even more lucrative.
So I don't think the solution is necessarily to impose a law or regulation to stop that.
I think the solution is actually in the hands of shareholders.
I think the solution is in the hands of boards. And you have very compliant boards.
Google's the exception. You have very compliant boards, and you have
actually very passive shareholders. And the shareholders are getting mistreated.
[pause] Who's next? What are your questions? Yes.
>> [inaudible]
Daniel Pink: Well, we have all kinds of motivations. I mean, fear is a great motivator.
You know, and so these kinds of things. I mean, I think there's an interesting thing
about what you see in open source is that people say, "Well, what about reputation?
What about a acclaim? Is that a motivator?" And it is, in a way, but not quite in the
pure way that we think. Because if you think about reputation and
acclaim, it is itself a form of feedback. It gives you a sense of feedback, and feedback
is necessary if you want to move toward mastery. And so, what's curious -- I'll tell you about
one study about this, about sort of the importance of feedback and reputation.
It's an interesting study of artists. So they went to -- they studied these artists
in the 1960s who were at the Art Institute School in Chicago, okay?
They were preparing to be artists. And they talked to these -- they interviewed
these students -- and they found out -- they did these qualitative interviews to find out
what their motivation was. And they noticed two groups of people.
Basically, because they were curious, "Why are people coming to art school?
What do they want to get out of art school? How does it fit into their path?"
And so, they noticed that some people had very much an extrinsic orientation. Okay?
"I'm really good at art, and I can become rich and famous doing art."
That was one motivator for people. "I want the acclaim. I think I'm really good
at it. I think I can make a decent living off of
it." There were other people who said -- had a
more intrinsic orientation. "I want to paint. I love painting; it's cool.
It's what I do." Okay? Sometimes you talk to artists, and they don't
even have an actual -- they can't even articulate why they're -- it's like, "This is what I
do." Okay? So you had two different orientations here.
Now, what's so interesting about this -- so they use this data to figure out admission.
"Okay, so we have two different kinds of mindsets coming in here.
Okay da da da da." So this sits there for awhile.
Somebody then realizes that there's this trove of qualitative data -- 20 years later.
"Wow, I wonder what happened to these folks?" It's fascinating, right? Follow up. What happens?
Well, it turned out that a decent number of them actually had attained decent amounts
of acclaim and had great reputations and actually were making good livings as artists.
And you know who they were? The intrinsically-oriented ones.
So there's this kind of zen-like thing going on that if you "pursue it, you won't attain
it." [audience laughter] You know? Grasshopper.
And that's so interesting. So it's like, you know, that if you -- that
the folks who are most committed to those kinds of external rewards were the ones who
were least likely to get it. Why? We can speculate why.
Being an artist is really, really hard, okay? Doing anything well is really, really hard.
It takes a really long time. And you're less likely to stick with it if
you don't really love it. And so, because they really loved it, it was
"what I do," they got a lot better at it. They were willing to stick through the --
The other folks who were more extrinsically motivated: "You know? I'll go sell insurance"
-- not that there's anything wrong with selling insurance.
What do you think? One more, then we'll wrap up.
Yes, sir.
>> [inaudible]
Daniel Pink: Okay. In themselves? Okay. So let's take that one. So the question's
a good question. "How can someone sort of lower in the ranks
foster this kind of sense of motivation in him or herself?"
Okay, I think people can do a lot more than they think.
So let me offer actually a tactical idea on that, okay?
Let's talk about performance reviews here for a moment.
You're laughing about performance reviews. What's the point of a performance review?
Ideally, to provide -- tell me your first name? Court.
Court says ideally to provide feedback. Ideally to provide feedback.
Now, we all know that that is actually not the best mechanism for providing feedback.
What's wrong with it as a mechanism for providing feedback?
It's too late. Very good. Your first name was -- Patsy.
Patsy says it's too late. What's another flaw in that?
It's tied to the money. That's a good point. What about the session itself?
Most performance reviews sessions -- you know this -- it's Kabuki Theater, okay?
[audience laughter] It's basically people playing certain kind
of rehearsed roles, right? It's not typically -- sometimes it is --
an open conversation. It's Kabuki Theater.
And so, it doesn't work very well. As Patsy said, it's too late, and it's also
too infrequent. Think about an athlete.
Athletes get feedback all the time. Serena Williams doesn't have a biannual performance
review, you know? [audience laughter] I mean, you're laughing, but it's crazy to
think about that, right? How are you going to get better at tennis
if you only get feedback twice a year, all right?
And so, I think there's a better way to do this -- a better way to do performance reviews.
And basically, is a much more autonomous way. And I think it's very effective for people
-- that Court says -- who are not the folks in positions of traditional power.
And it is basically to take performance reviews back. Take them back.
Do not outsource your performance review to managers or bosses or people of formal authority.
Take it back. And here's how it would work. Basically, a Do It Yourself performance review.
At the beginning of a month, set out your goals -- your learning goals, and your performance
goals, okay? Set them out at the beginning of the month.
And then, at the end of the month, call yourself into the office. [audience laughter]
Give yourself a stern, but loving, assessment of how you're doing.
Where are you making progress? Where are you falling behind?
The other question that we don't ask enough in performance reviews is, "What tools or
information do you need to do things better?" Okay?
Ask yourself that. Ask yourself that question. And that's how you can move toward greater
and greater mastery on your own. Take them back.
The other thing that's very interesting that goes toward aspect of Court's question is
that -- what I've seen is that -- this is happening in a really interesting, somewhat
self-organized way. So that you see this -- sometimes people will
say, "It's too weird to call myself into the office.
I'm not going to have this secret conversation with myself.
But I will have it with a peer. Or I will have it with two peers or three
peers or four peers." And so, you see this less inside of organizations
but more among people who are self-employed or small entrepreneurs who will fashion these
groups and meet monthly and say -- So, Court, Patsy, and I meet.
And I say, at the beginning of the month, I say, "Listen, Patsy and Court, here's what
I'm hoping to do this next month". "Okay, great. Maybe think about this, that,
the other thing," they say to me. They tell me what they're trying to do in
the next month. At the end of the month, we meet.
We sit down informally. Have some coffee. "Okay, how'd you do?"
"Well, I didn't quite make those sales calls." "Why not, Court?" Hold you accountable a little
bit. Give you feedback.
"Oh, that was a really" -- and so, people are yearning for this.
So they're taking these back in a self-organized way.
So I think that reclaiming performance reviews is one thing that individual contributors
can really do to get better at stuff. And I don't think that most organizations
are fully committed to helping everybody get better at stuff.
And on that note, thanks for having me.