JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. Think money is the ultimate motivator? Well think again says Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us. In his book Pink contends that while money is important it plays a relatively small role in what pushes us to strive, succeed, and enjoy life. Pink's book Drive is being translated into 31 languages and continues to show up on the New York Time's Bestseller List. The topic this week: the surprising truth about what really drives us. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

[DAN PINK'S REMARKS TO THE RSA - VIDEO COURTESY OF THE RSA]
We are purpose maximisers not only profit maximisers. I think the science shows that we care about mastery very, very deeply and the science shows that we want to be self-directed. And I think that the big takeaway here is that if we start treating people like people and not assuming that they're simply horses-- you know slower, smaller, better smelling horses-- if we get past this kind of ideology of carrots and sticks and look at the science I think we can actually build organizations and work lives that make us better off but I also think they have the promise to make our world just a little bit better.

JIM GLASSMAN:
Dan thanks for joining us on Ideas in Action. Dan what are the historical phases of motivation that have brought us where we are today?

DANIEL PINK:
Well human beings are a mix of motivations. We have a biological drive, all of us do. We eat when we're hungry, we drink when we're thirsty, we have sex to satisfy our carnal urges. That's part of what it is to be human but obviously not all that it is. We have a reward and punishment drive-- we respond very well to rewards and punishments in our environment. And for a long time-- early on in our history, I mean 50,000 years ago, it was really that first drive, that biological drive, that was at the center of society. I was trying to race faster than you so the saber tooth tiger would get you rather than me. I was trying to basically to survive. It was all about those biological impulses. Well as we got more complex and I had to do trade with other people, I had to work with clans and tribes that weren't my own, that reward and punishment drive ended up being a very powerful social lubricant. It basically created an operating system that allowed us to do all kinds of trade and commerce. I mean it's an incredible achievement these carrots and sticks. I mean it's an incredible human achievement. We all tend to think that the Industrial revolution was fueled by steam or coal but it was fueled in equal measure by carrots and sticks. Well now here we are in the 21st century and if you look at the social science-- if you look at 50 years of research in motivation it says that those kind of carrot and stick motivators are great for 19th century work, good for 20th century work, but don't work very well for 21st century work-- the complicated, complex, creative kinds of things that most people in the white collar and even blue collar workforce are doing today.

JIM GLASSMAN:
So when you say carrots and sticks-- the carrots-- the medium for carrots is generally money, right?

DANIEL PINK:
Yeah. Generally money deployed in a certain way. It's what I call an 'if then' reward. If you do this then you get that.

JIM GLASSMAN:
So you say in your book Drive you write: "The best use of money is to take the issue of money off the table.," And how would that work?

DANIEL PINK:
Ok well that's true for the creative and conceptual kinds of work, for routine things-- stuffing envelopes, pay people per envelope; turning the same screw the same way on an assembly line, doing that routine algorithmic stuff 'if then' motivators work well. They get people to focus, eliminate distractions. The trouble is we have 50 years of science that says that they don't work so well for the complicated, complex, and creative sorts of tasks. So the best use of money as you say is to pay people enough so they're focused on the work rather than on the money. People do better when you raise the-- we have this misguided notion we think if we raise the salience of money that'll get people to perform better. But the way people perform better-- again this is not a philosophy this is what you know 50 years of --

JIM GLASSMAN:
--There's research on this right--

DANIEL PINK:
Social science tell us is that the way that people perform better at work is when you raise the salience of the work. And the way to do that is to reduce the salience of money. And so what it would mean it would mean paying people very healthy salaries and then offering as a measure of fairness some kind of maybe profit sharing but something-- some other kind of incentive but not keyed especially to individual short-term performance. That can be devastating.

JIM GLASSMAN:
You talk about how there's technology ventures for example where people are participating in creative activities not for money. What are some of those?

DANIEL PINK:
There is a great example of the entire open source movement. The open source movement, which is--

JIM GLASSMAN:
Linux--

DANIEL PINK:
Linux, Apache, Wikipedia, a whole array of things, which would have seemed to many people-- and I studied economics-- theoretically impossible. Let's get a bunch of volunteers who do complicated work for no money and give away their product. That can't work, but it does because people have these other kinds of motivations and even in the for profit technology sector there are a whole array of really, really interesting new practices that challenge the traditional notions of management. And these new practices arise not because they're nicer but because they're more effective.

JIM GLASSMAN:
What are some of those practices?

DANIEL PINK:
Oh I mean one of my favorite is an Australian company called Attlasian does something called FedEx days where once a quarter on a Thursday afternoon they say to their developers go work on anything you want as long as it's not part of your regular job. Do it the way you want, do it with whomever you want, pure autonomy, the only requirement is that you have to show what you've created to the rest of the company on Friday afternoon in this fun wacky kind of meeting. They call them FedEx days because you have to deliver something over night. It turns out this one day of intense autonomy new ideas for products, new features for existing products, improvements to internal processes-- and these FedEx days are spreading like crazy to companies all over the place.

JIM GLASSMAN:
And Google does something similar right?

DANIEL PINK:
Google does 20% time where people can spend 20% of their time working on whatever they want. And again there's something that's sort of a little bit-- you know in basketball terms is a little bit of a head fake here because 20% time, FedEx days, it seems you know summer of love, follow your bliss, groovy, and it's so strategic and it's so hard headed. Cause Google is not signing away the intellectual property rights--

JIM GLASSMAN:
Right.

DANIEL PINK:
--To what's created on 20% time--

JIM GLASSMAN:
It's one of the best things-- best products Google has were created in this time--

DANIEL PINK:
Google News-- you used to be-- you were in the newspaper business at one point, Google News has reshaped the newspaper business. Google News-- not an official project, a 20% project. G-Mail not an official project a 20% project and if you talk to people at Google they'll that you can take any innovation there and it traces back to someone's 20% project.

JIM GLASSMAN:
And another example you used in the book is the results only work environment, ROWE, explain that.

DANIEL PINK:
The ROWE. What it is-- work arrangement where people don't have schedules. They don't have to be in the office at a certain time, they don't have to be in the office at any time, they just have to get their work done. How they do it, when they do it, is up to them. And it started off as a-- most famously as a small project inside of the corporate headquarters of Best Buy, the big American retailer, and now 90% of the corporate headquarters is on this results only work environment. You see it with places like Netflix, classic kind of disruptive company, right? I mean this is a very successful company. Successful not in basically achieving greater and greater economies of scale but basically reshaping an entire industry. Netflix: their vacation policy, they don't have one. People take as much vacation as they want whenever they want it. There's a challenge to the orthodoxy out there about what really motivates people and what it says is that we have this folklore-- there's a belief-- really in folklore that human beings are easy and simple. That if you simply reward the behavior you want and punish the behavior you don't want you're going to get the results that you expect and that just empirically isn't true and so you have these companies out there that are challenging these orthodoxies and minting what I think are going to be the sorts of management practices that most companies are going to adopt. I've started doing this inside of companies is say how many people here-- give me an estimate how many people in your company do you think are good citizens, contributors, work hard, trustworthy? And usually the answer, depending on the company, is-- I've never gotten an answer lower than 85%. Ok? It's usually in the 90s. And so what we have is we have a set of workplace policies-- let's say it's 90% fit that bill-- all of our workplace policies are designed for the 10%. All of our workplace policies are designed to close off the low road to the 10% and they end up shackling the 90%.

JIM GLASSMAN:
You made one of the best or most popular videos on YouTube-- I don't know if you actually made it but it was a speech that you gave at the Royal Society in London that was then animated-- last time I looked it had 6 million views. Tell us about that.

DANIEL PINK:
I did a talk in this place called the RSA and they ended up taking 9 minutes of the remarks and accompanying it with this incredible white board drawing done by a guy named Andrew Park in the UK.

[REMARKS ON VIDEO]: It turns out there are three factors that the science shows lead to better performance-- not to mention personal satisfaction: autonomy, mastery, and purpose.

It's a really great way to put ideas in action that is there's some motion, some animation, and it helps sort of give some of these ideas life.

JIM GLASSMAN:
But clearly people are connecting with the content of what you were saying as well as with the animation.

DANIEL PINK:
I hope so. [Laughs] I mean believe me plenty more--

JIM GLASSMAN:
No in other words this kind of resonates with people I think.

DANIEL PINK:
I think it does because I think all of us have that suspicion. I mean all of us-- if you say to people tell me about the best boss you ever had. They don't say here's the best boss I ever had she was amazing; she was unbelievably controlling, she told me what to do and how to do it all the time, she was completely controlling and I was utterly compliant, that was the best job I ever had.

JIM GLASSMAN:
But what about the part where the best boss may be the one who said you know if you do this I'm going to give you a big bonus?

DANIEL PINK:
You don't hear that very often. What you hear-- ask people about their best bosses you hear answers of-- it's interesting-- you hear high standards and autonomy. You hear-- they held high standards for me but they let me get there on my own.

JIM GLASSMAN:
And in fact you say in your book that this carrots and sticks approach can lead to cheating and even addiction. What do you mean by that?

DANIEL PINK:
Well I mean the mechanism for waving a carrot in front of somebody you know is similar neurologically to the sorts of-- the reward-- the pathways that we have for drugs and other kinds of things that are less benign. And that's the point these rewards get our attention ok so if you offer me $500 to climb onto this desk I'm there. Ok? I'll do it. I'm going to focus on it, do it. You get my attention. That's a very good frame of mind for simple things but for the complicated things that most people are doing, for seeing the long-term, it just doesn't work very well. If there's very high stakes rewards for short-term accomplishments you're going to get some cheating there's no question about it. I mean we've seen that.

JIM GLASSMAN:
You talk about simple tasks but also very short term. That's the orientation. You've said that in fact the financial crisis of 2008 may have been the result of this kind of carrots and sticks thinking and very short-term thinking.

DANIEL PINK:
Well I mean I think that there is a short term problem-- to some extent in American business where many executives-- not because they're bad people but because they're rational say I'm looking at that 90 days. I want to hit my earnings. I want to-- or exceed my earnings by 1 cent. That's my time horizon, and if I do that it triggers a huge bonus. I think that's a big part of what happened in the financial crisis. You also had people basically passing the potato around so I write a mor-- I'm a mortgage broker and I give somebody a mortgage for a house that they can't afford then I go off and sell it off to someone else and they chop it up and package in the security that somebody else buys. The thing is is that again looking at the science these 'if then' motivators they're powerful in the short term. Let's take sales-- it's the 20th of the month and you got to hit your sales numbers by the end of the month. Offer people a huge honking bonus for closing deals by the 30th of the month. You'll hit your numbers. You might burn your best customers in the process, you might have people pulling in orders from later in the year, but it'll work. It has a great-- it does do things in the short term.

JIM GLASSMAN:
Other than money you write that genuine motivation's composed of three things so let's talk about each one of them. The first is autonomy.

DANIEL PINK:
Yes. Autonomy's our desire to be self-directed, to direct our own lives. It doesn't necessarily mean kind of wild and wooly cowboy independence but it means having some volition over what we do, how we do it, who we do it with, even when we do it. I mean Facebook is a good example. Facebook hires engineers, very talented engineers, they bring them into a boot camp-- Facebook boot camp they're doing-- fixing bugs and what not. Then let's take-- there's a great engineer she goes around and she interviews with various product teams and various technology teams at Facebook and then at the end of those three or four weeks she decides which team she wants to work for. That is the company hires a talent but the talent picks the team. Because if you have a say over who's on your team you're more likely to engage.

JIM GLASSMAN:
So it's ownership, buy in, that kind of thing--

DANIEL PINK:
It's all of those kinds of things but it's self-direction. All of us want to be in charge of our lives. We don't want to be controlled. Human nature is not to be controlled and our nature is to be autonomous and self directed. If you fashion policies particularly within the inside of a company that go with the grain of human nature rather than against it I think you do better.

JIM GLASSMAN:
Ok so the second element in motivation-- this motivation 3.0-- is mastery. So you write, 'the desire to get better and better matters.' Now does this work for the majority of people or only for high achievers?

DANIEL PINK:
Oh it works for everybody. I mean this-- if you think about human behavior people do all these things that biologists and economists can't explain. Playing a musical instrument on a weekend; biologists: 'Why are you doing that?' Economists: 'Why are you doing that?' It's not satisfying a biological urge; you're not making any money, why do people do that irrational act? 'Cause they like it, 'cause it's interesting, 'cause they get better at it. And this is-- there's some interesting research out of-- from an incredible researcher named Teresa Amabile, fairly new research, that shows that the single biggest motivator at work-- she did this fascinating in depth study where she would randomly page people during the day or you know text them during the day and say how motivated are you right now and what she found is that the single biggest motivator at work was making progress. The days that people were making progress were the days they felt motivated, engaged, loyal to the company.

JIM GLASSMAN:
So is the lesson there that the businesses should offer ways for people to get better at what they do-- you know education?

DANIEL PINK:
Put people in positions where they make progress. A lot of times people don't see the progress they're making, help people see the progress they're making, celebrate the progress. The trouble is inside of companies is that the only way you know you're making progress is if you get feedback on what you're doing, and the workplace is one of the most feedback deprived places on the planet. Generation Y, the younger folks are always going around annoying boomers saying how am I doing, what'd you think of that, was that any good-- and boomers have misinterpreted that as some kind of deep seeded emotional neediness. When in fact what it is is that they live in a world of incredible rich robust feedback where you press a button something happens you do a Google search you get the answer, you play a game you get a score, then they come into this feedback desert called the workplace where we give people feedback once a year in a kabuki style formal performance review. I mean it's crazy.

JIM GLASSMAN:
So what would you advise for a business as far as feedback in concerned about mastery?

DANIEL PINK:
They're all kinds of great thing that companies are doing. One is a do it yourself performance review. So at the beginning of the month you can set out your goals-- your learning goals and your performance goals at the end of the month give yourself an evaluation. High performing teams do that almost organically, they meet, they set out goals, they meet again, they give each other feedback. Some companies are doing something really, really interesting that is kind of a peer-to-peer-- using peer-to-peer feedback even with external rewards although no contingent ones. So there's a couple of companies that will do things like say you and I are coworkers, you help me out of a jam, I see you do something amazing for a customer, boom I can give you a $50 bonus on the spot. Now it's non-contingent so I'm not saying if you do something great for me I'll give you a bonus.

JIM GLASSMAN:
Right.

DANIEL PINK:
It's non-contingent, it's immediate so you don't have to wait 9 months to get the feedback on it, it's $50 so it's not distorting anybody's behavior, and when it comes from peers it's often seen as very, very authentic. There's even some software out-- a lot of new software being developed to sort of quicken the feedback metabolism inside of companies.

JIM GLASSMAN:
Ok number three you write, 'Humans by their nature seek purpose; to make a contribution and to be a part of a cause greater and more enduring than themselves.'

DANIEL PINK:
I think there's purpose with a small 'p' and purpose with a capital 'P' and both are powerful motivators. For instance people want to know how what they do contributes to the larger whole. So they want to know that if they're going to work that it's going to have some kind of effect on what's going on, that it doesn't disappear into the ether. And when people feel like they've done something that actually is going to last, that something that's going to make a difference in somebody's life-- and I don't mean something you know grandiose like you know solving world hunger or anything like that-- giving somebody a great product or service, having a restaurant that people love, doing something that you know-- have a product that someone buys as a gift and gives to someone else and has a meaningful experience. That is actually really motivating and there's some other just fascinating research out there that shows that even-- bringing the sense of purpose to the surface can have a huge effect on people's productivity and performance.

JIM GLASSMAN:
So are people willing to take let's say a lower salary if they-- if they're satisfied in these other ways?

DANIEL PINK:
Not necessarily, because here's the thing this goes back to your question about money-- money is really important-but it's just not important in the way that we think. So these are not replaceable, fungible goods, it's not like I'll give you a 10% drop in pay and a 15% increase in mastery. Uh uh. It's more of a threshold thing. So you got to pay people enough and people evaluate enough based on-- this is very, very clear in the research on human resources-- people evaluate fairness internally and externally. So if you and I are doing the same kind of work in the same kind of company and you're getting paid a lot more than me and I find out boom my motivation goes down. If you and I are working at one kind of company doing a certain kind of work- a similarly situated company is paying its folks for our jobs a lot more; totally demotivating. So money is a very important threshold motivator. If you miss it it's game over.

JIM GLASSMAN:
Does this theory work for those who are not Westerners? Is there anything cultural about it?

DANIEL PINK:
It's interesting-- some of the psychologists-- mostly psychologists not really economists have looked at this and what they find particularly with autonomy is that autonomy is pretty universal. It might express itself differently above the surface. So someone in Japan might say well-- I choose-- my self direction says I want my family to do well and my family to prosper rather than an American might say I want to be on the cover of Rolling Stone, and they both come from autonomist urges they might express themselves a little differently on the surface. 'Cause I don't think you know deep down there's a huge amount of difference in our nature. I mean, we're human beings.

JIM GLASSMAN:
When you talk to business people about this idea-- the ideas that you developed in Drive-- what are their reactions?

DANIEL PINK:
It's interesting. I've gotten much less pushback on a central claim than I ever would have imagined. Partly because if you marshal the science and marshal this evidence it's pretty overwhelming. It's not even a close call in the social science. So then you get two reactions; number one is I agree with you what do it do? And I think that there are a lot of people in business who generally want to be good. Good in the sense of treating people well but good in the sense of affective at the same time and they're realizing there's some amount of synergy between the two. The other thing that you get though is I agree with you I think you're right; I'll do it next quarter I got to hit my numbers.

JIM GLASSMAN:
[Laughs] Are there big companies in the United States-- you talk about I think it's Attlasian in Australia-- but are there big companies that are adopting this kind of approach?

DANIEL PINK:
Look I mean Google's a big company, Facebook is becoming a big company, Netflix is a big company, what you see-- Cisco has started doing FedEx days so that's a huge company as well. It's harder to do in a very large kind of company, it's harder to do in a publicly held company because of the short term pressures, it's harder to do in a highly regulated industry because there's less autonomy. So you see the first movers in places like really in places like software and places where the founder was still around. Having some amount of founder DNA still around-- so you look at a place-- you look at an established tech company like Qualcomm in San Diego and they do a lot of these kinds of things but Irwin Jacobs who started the company 30 years ago he's still walking around the hallways.

JIM GLASSMAN:
In the tools kit section of your book you give some concrete steps that readers can take in order to put motivation 3.0 into effect. Can you just tell us what your top advice for individuals?

DANIEL PINK:
For individuals?

JIM GLASSMAN:
For individuals.

DANIEL PINK:
I think it's a few things. Number one I would tell them to think about-- I mean as mushy as it sounds to think about their purpose. It's like why are you here, what's the point? And a lot of times--

JIM GLASSMAN:
Kind of one sentence.

DANIEL PINK:
Yeah. Like there's an interesting exercise in there where can you define your-- what's your life about in a sentence? I think that--

JIM GLASSMAN:
What's an example of that?

DANIEL PINK:
Oh 'I live my best life so that I can teach others to do the same.' That was Oprah Winfrey's sentence when she did this exercise. Alright so-- so having a sense of purpose-- a lot of times we talk about how; here's how you do it, here's how you do it, I got to get better at it, but we're not talking about why, what's the point? Why am I here? So that's a good one. I think having a good sense of how much autonomy you really have particularly at work and so you can do a sort of self assessment where you say how much autonomy over time do I have, how much autonomy over team do I have, how much autonomy over task do I have? I think that's kind of things. There are all kinds of things that parents can do with their kids--

JIM GLASSMAN:
Yeah what's gotten the biggest response for parents-kids advice?

DANIEL PINK:
Ok-I get a piece of email on this everyday. 'Dear Dan, now I know why paying my kids an allowance to do chores isn't working.' Alright? So this idea out there that chores are good and allowances are good but it's one of those things where if you combine the two it's not good. And so if you combine-- which seems so sensible, my kids are going to do-- I'm going to pay them an allowance in exchange for doing chores but that's not why you do chores at your house. You do chores at your house because you're part of a family, family members help each other, you have an obligation to each other. Allowances are good too; helps kids manage money, understand the importance of money, but when you start paying them to do chores you're saying hey taking out the garbage after dinner only a chump would do that for free, helping your mom empty the dishwasher that's like working at Mickey D's, nobody would ever do that for free. And so what parents find out is that it actually works because kids love-- we all love money but they metabolize it pretty quickly and suddenly you're paying $10 a week to get the dishwasher emptied and you know you got three kids-- my kids would start a union you know and they'd want $12 to empty the dishwasher.

JIM GLASSMAN:
Did you learn anything about yourself by writing this book?

DANIEL PINK:
I think so. I think so. I didn't really understand myself the importance of-- I think I understood autonomy pretty well and I think purpose is important too and other kinds of research and writing reporting that has come out a lot. It was the mastery that really surprised me but it made visceral sense. So if I'm working on something and I crack a problem in writing or I come up with wow that was actually a good paragraph for once, it's great. I mean you're up, you feel good about what you're doing, and at some level all of us think well not everybody-- that must be my own weird thing-and a lot of us I think don't extrapolate enough from our own experience.

JIM GLASSMAN:
That's a good place to end. Thank you Dan Pink.

DANIEL PINK:
Thanks for having me.

JIM GLASSMAN:
And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.