Tuesday, July 10, 2012

What Management Does

I am reading DRIVE, Daniel Pink's usually interesting take on motivation and what makes people tick.

I have come across the key ideas of this book before, primarily through Pink's presentation at the TED, which I found extremely interesting and put on this blog earlier. [See it here]

The key idea, to repeat, is that there is a limit to extrinsic, material, incentives for work. Most managers indeed operate with an extreme, behaviourist assumption about why people work. Because they get paid, simple, is an extraordinarily naive but extraordinarily common answer. And, accordingly, they believe that the promise of higher pay, extra pay, incentives, is what makes people go that extra mile sometimes required by the business. WRONG, says Dan Pink, in this book.

I completely agree. Psychological theories, elegantly presented in the book, show that extrinsic motivators, like money, does work, but only in a limited context, only for activities which are routine (making 40 phone calls a day) and often lead to undesirable behaviour. However, if the activity involves 'rudimentary cognitive' ability, such as making potential customers, on the other end of phone, interested in some product or service, which will require not just the product knowledge but extraordinary sensitivity to his/her feeling, privacy and interest (given the limitations of phone as a medium), extrinsic benefits do not work. 

I shall stick to my theory of phone calls [I have been a telephone salesman for a period in my life]. Most companies still hire people to make calls, and call centres are still popular. The assumptions that lie beneath the whole business of telesales is an extraordinarily plain view of how things work: If you make 40 phone calls, and get 10% conversion (10% because that is a nice round number and it is just reasonably low but sounds nice!), you will get 4 sales a day. And, to do so, companies give out incentives, on the number of phone calls when the money is easy, on conversions when it is tight. We, as customers, therefore get these annoying phone calls at odd hours, by mostly rude people who would want to sell something that we do not want, and are mostly left with a bad taste: If we happen to remember the company's name whose sales people pester us all the time, most of us will go great lengths to avoid their products even when we see it at a supermarket.

However, Dan Pink's point is about intrinsic benefits, the work's own reward, which makes people do better in cognitively challenging tasks. He talks about three elements of intrinsic benefits - Autonomy, Mastery and Purpose - which people would derive themselves from meaningful work. Returning to the theory of phone calls, imagine the company has a solution to, well, leaked roofs, and is on a mission to ensure that no one suffers from leaked roof ever again. Here is a brief to its tele-callers: You are the missionaries of the solution, and find at least 4 people in this postcode area and solve their problems. Spend as much time as you want on the phone, and make sure that you are courteous (at least ask the person you are talking to if it is a good time to talk!) and never intrusive: We want to be the friendliest roof repairing company in the world. I would think this approach will work better (on the assumptions that people need roof repairing, the company has a good product which is reasonably priced) and the employees will often end up doing more than 40 calls because they are on a mission.

The problem with material benefits is that it is based on a particular view of how people work and what they expect. I have worked with an entrepreneur, who, though being a generous and charming man, has a very low view of what people really work for, and he went on to create one of the most repressive, ad hoc, dysfunctional workplace I have ever seen. It was not to do with his personality, but his mistaken view of other people and their motivators: While he handed out material benefits, he gathered a crew of self-interested and often dishonest people, who, when the market turned sour and the boss himself needed help, left him and the business in a sorry state and almost beyond repair. What's  worse, such experience only reinforced his view that people work only for money and benefits, and he wholeheartedly ignored the possibility that creating a shared purpose or giving people autonomy may turn around the workplace. While extrinsic and intrinsic motivators do not need to be mutually exclusive, people who actually manage sign up to the view of human motivation of one kind or the other (lazy automatons motivated by rewards versus autonomous self-directed individuals wanting to make a difference). 

So, finally, here is my view of twenty-first century management, after Dan Pink: Managers job is to create a safe, trusting place to work, which should be, for the individuals involved, a way to find their own self-esteem and fulfilment. The businesses exist, and I keep repeating this, to solve social problems, and only by solving them, they earn a monetary reward: The managers job is to pass on this message to the employees (who s/he should recruit on the basis of the commitment to this view) and enable them to get on with it. I shall use a Steve Jobs quip - 'making a dent in the universe' - that's what work should be for, and the manager's job is to be the coordinator in chief in that extraordinary effort, nothing less, nothing more. 

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