Dan Pink Talks About Motivation, Carrots, Sticks, Baby Boomers and Sales Commissions

Here is the transcription of my interview with Dan Pink for those of you who would rather read it than listen to the recording. I hope you enjoy. Bob Poole

Interview with Dan Pink, talking about Drive: The Surprising Truth About What Motivates Us

Bob Poole: Well, I have the privilege today of being with Dan Pink, to discuss his latest book
Drive, The Surprising Truth About What Motivates Us. Dan, welcome to the Water Cooler Hangout.

Dan Pink: Bob, it’s great to be at the water cooler, hanging out.

BP: Thanks. By the way, congratulations, I took a look today and I see that Drive is ranked
number three on New York Times business best sellers list this month.

DP: Hey, thanks. Thanks for noticing.

BP: Yeah, that’s fantastic.

DP: Yeah, we’re off to a pretty good start

BP: In the introduction, you said that "this is a book about motivation and I
will show you that much of what we believe about the subject just isn’t so." Many years ago I was
taught in Management 101, that what gets rewarded gets done. And you think about the carrot and
stick kind of thing. So, what really motivates people? What did you find when you wrote the book?

DP: Well, I think that you’re right, that what gets rewarded, that is people respond very well to
rewards and punishments in their environment. They don’t always respond the way we think they’re
going to respond. And one of the things that I found out in doing the research for this book, and if you
actually look at the science of human motivation, it calls into question a lot of practices in business.
As you suggest, Management 101 suggests, that the way that people perform better is by responding to
rewards or punishments, that in the absence of a carrot or a stick people wouldn’t do much. That’s just
not quite right. That’s just not true, at least according to 40 or 50 years of behavioral science.
What science shows, for relatively simple straightforward tasks, turning the same screw the same way
on an assembly line, or adding up columns of figures in a white collar job, those kind of motivators are
actually pretty good. However, once tasks call for even modest degrees of creativity, complex thinking,
conceptual ability, those kinds of contingent motivators, those if/then motivators, if you do this, then
you get that, they don’t work very well at all, and they often backfire.

BP: Right, the backfiring thing was very interesting as it relates to what happened in this past
year with the idea of short term goals and the whole real estate market. Can you tell us a little bit about
that?

DP: Sure! There are all kinds of ways that those kinds of contingent rewards can backfire. They
have a lot of potential collateral consequences. One of them is that, especially if you give a very high
stakes reward to short term performance, some people are going to take the low road there. Some
people are going to cheat. Not everybody, but a portion of people will cheat. You see this basically in
every kind of high stakes reward, where there’s a big payoff for hitting it.
That’s Bernie Maddoff. That is a source of part of our financial woes.

We see it now even in schools
where you have schools and teachers being rewarded based on scores on standardized tests, and
there’s some recent news out of Georgia that show that something like 25% of the exams that came in
had erasures that changed the answer from what the wrong answer to what was the right answer. And
so some people are going to cheat. That’s the big downside of it.

I think the bigger downside though—that’s a significant downside—but the more significant one for our
purposes, or for the purposes of your listeners, is that contingent motivators, those if/then motivators
can actually inhibit creative thinking. They’re very good for fostering simple, routine rule-based thinking,
because they get you to focus.
So, if you offer me 500 bucks to do something, you have my attention, Bob, I’m focused, man. I really
want to get that 500 dollars. But my frame of mind is this very intense focus, narrow vision. That’s a
great way to approach a problem if it’s short-term or if it’s simple, or if it’s rule based, where there’s a
certain set of steps to follow to get a right answer. That’s not the frame of mind you want to be in if
you’re trying to come up with something creative, if you’re trying to do something innovative, if you’re
trying to solve a conceptual problem
For that, for those kinds of problems, those kinds of challenges you don’t want a narrow view, you want
an expansive view, you want to be seeing the periphery.

And so many times these kinds of rewards
which we think of as somehow emanating from nature, as sort of a given in how people perform, these
if/then rewards, they don’t work very well for creative, conceptual tasks precisely because they work for
simple tasks. They narrow our vision, sometimes you want a narrow vision, other times you want an
expansive vision. But you don’t want to apply a motivator that gives you a narrow vision when you really
want is a wider ranging vision.

BP: So you call the new motivation—what?—Motivation 3.0?

DP: Right, Motivation 1.0 is motivation based on our survival instinct. This is the motivation of
when we were evolving and trying to outrace saber tooth tigers. And it’s built mostly on our biological
motivations, and human beings have a biological drive, obviously. We eat when we’re hungry, we drink
when we’re thirsty, we have sex to satisfy our carnal urges. But that’s not all we are.

So we also have a
second drive, where we do respond very well to rewards and punishments in our environment. Typically
if you reward something you get more of that behavior and if you punish something you get less of it.
And so for a long time I think our businesses had an operating system—and Bob, this is Motivation 2.0—
for a long time our businesses had an operating system built almost entirely on rewards and
punishments. As you’re suggesting, that was Management 101. And here’s the thing, it worked pretty
darn well!

BP: Well, especially in the sales field! I grew up in the world of sales, and that was the
way
of working with sales people… Is it still a good way, you think?

DP: On sales? It’s actually a very, very interesting question. I’m not sure whether it is. I’ll give
you an example of this. I think it’s a really interesting example. There’s a company that I encountered
just a couple weeks ago in Cambridge, United Kingdom, that has eliminated commissions for the sales
people.
Now that seems crazy, right? And what they did… here’s the reason behind it, and I’ll tell you the
outcome. The reason behind it was that they, the company, would set up a compensation scheme, and
sales people inevitably—which is what I would do, not because sales people are bad people, they’re
human beings, they would do what I would do—they figured out ways to game it.
So, if their big bonus is based on increase from month to month, people would often have this kind of
saw-tooth pattern, where they would do really well one month, not do well intentionally the next
month, so they could have a big kick the next month.
If the commissions topped out a certain amount in a given month, they would basically stop working,
stop selling. Understandably.

And so the company in response to people trying to game the
compensation system would make the compensation system more complex. As a result, sales people,
understandably, made their response it more complex, which made the company make the sale
compensation system more complex….
And so eventually the two founders of the company said, “Maybe we’re just going to down the entirely
wrong road.” And they said, “What if we just eliminated sales commissions.” And this is a very
interesting conversation that they had.

So they went in to two of their sales people individually. And
they went in to their first guy, Bob—or let’s not call him Bob, let’s call him Fred—so they go to Fred and
they say, “Fred, we’re thinking about changing our compensation system. What we’ll do is, instead of
having compensations, we’ll raise your base pay, and give you and everyone else a piece of the back
end, a piece of the profit, you know, profit sharing, and what do you think of that?” And Fred says,
“Well, wow, I think that’s actually kind of a cool idea. It would make me feel less pressured each time to
hit my numbers, I think I’d be more collaborative with the other sales people, and I think actually I’d
serve the customer better. The problem you’re going to have is that Maria, this other sales person,
Maria’s never gonna go for this. Maria only cares about money.”

And they say, “Thanks, thanks a lot.
Thanks for your feedback.”
So they go to talk to Maria, one of the other sales people, and they say, “Maria, we’re thinking about
eliminating commissions, here’s why… higher base salary, piece of the back end, what do you think?”
“Well, I actually think it’s not a bad idea. I think we’d serve customers better and collaborate more. The
problem is that Fred will never go for this, because Fred only cares about money.”

And so what you had
is people making false assumptions about others. That somehow sales people didn’t have any sense of
intrinsic motivation; didn’t have any desire to do a job for its own sake, they were only trying to get their
rewards, in contrast to every other person on the planet.
And so, what this company did in eliminating sales commissions, they actually saw sales go up. Why?
Well, a few things. Number one—and I thought this was interesting, ‘cause this surprised me—is that it
freed up an enormous amount of management time. Managers were spending less of their time figuring
out who brought in what piece of business and litigating those kinds of things and more time actually
coming up with good ideas and helping run the business better.

There was certainly much more
collaboration and customer satisfaction increased as well.
So this seems really sacrilegious in a way, but I think there are these alternative approaches. If you start
with a different assumption about people… If you start with the assumption about people that they’re
fundamentally passive, inert, and lazy, and that they’re not going to do a damn thing unless you dangle a
carrot or threaten them with a stick. If that’s your starting assumptions about human beings, or the
people in your organization, that’s going to take you down one road. If you’re starting assumption about
the people in your organization is different, that is, people actually given a chance want to do good
work, they want to be active and engaged, they actually care about quality, that’s going to take you
down a different road.

And what I find kind of curious is that in management, and certainly under Management 101, as you
describe it, Management 101 takes only that first view. And there are many—maybe even the majority
of managers out there today—who have that view of human nature. Who think that people in their
organization, that people in general, wouldn’t do a darn thing unless they were rewarded or punished.
What’s curious is that no one ever believes that about him or herself. Everybody always thinks that he or
she is the exception, that he or she cares about quality and cares about doing a good job and has some
intrinsic motivation. It’s sort of like that old phenomenon where if you go to a group of 100 people and
say, “Raise your hand if you think you’re an above average driver,” 99 of them raise their hand. And so,
maybe we’re not that unique, maybe people have the same sort of motivations and desires that you do,
and if you start from that assumption about human nature, I think it takes you down a very different
road.

BP: I think sales people have always been able to be motivated by intrinsic motivation; I just
think that management failed to look at it like that. As you said, they started out with the wrong view
point. That’s a great story.

DP: I think we sold sales people short, no pun intended. I think somehow we said, “Well, these
people don’t care about the customer, these people are purely instrumental, these people don’t have
any intrinsic motivation.” And I just don’t see how this one profession would deviate from human
behavior so radically.
And the other thing about sales people that I’ve found, and one of the things that I’m most interested in
exploring right now, is that a lot of time these rewards that they get, they’re not only the goal, they’re
also for a lot of people a form of feedback. In order to get better at something, you need feedback on
how you’re doing, and a lot of time the numbers and the rewards serve as that kind of feedback. It
allows them to figure out how they’re doing.
And people I think have an inherent desire to want to do better and to do good work. And in a lot of
professions, in contrast to sales, a lot of times people have no idea how they’re doing, and so they crave
that feedback, and I think with sales people, that feedback is often baked right in.

BP: That is one of the main characteristics that is good about sales, is that you already know
where you stand and you can, if you have a good manager, get good feedback, or just
by winning things. I always felt that that was short term, that people who focused on rewards were
going to do fine for a while, but they were going to burn out. They need to shift the focus to something
that is more like focusing on value for the actual customer themselves, or doing a good job.

DP: Yeah, but here’s the thing. Suppose you’re the CEO, and you look at your sales force say
well, our sales force, the only reason they care about selling our product or service, is to get a big
commission and win a trip to Hawaii. If that’s the only reason they’re selling your product or service, I
think you have a problem. I think that’s a problem. If they don’t truly believe in what you’re doing, if
they don’t truly think that the product they’re peddling is going to make a difference in customers lives, I
think that is in some ways a diagnostic that services is going to be a serious long-term problem in
the organization.

BP: Agreed. So what you’re saying is that in Motivation 3.0 the
activity itself becomes the driving force for the person. Doing the job is the driver.

DP: Right, but an important caveat here. Let’s talk about money here for a second a little bit
more. Money is a motivator and if people aren’t getting paid enough… The starting point is if people are
paid enough. If people aren’t paid enough, Motivation 3.0 is a joke. If people aren’t being compensated
adequately, if they feel like they’re being treated unfairly, if they can’t support their family, you’re not
even going to get to the point where you can talk about the satisfaction of the job itself. So you have to
pay people enough, to my mind you have to pay people more than enough. You know, in some ways,
the best use of money as a motivator is to take the issue of money off the table, so that people can do
good work.

BP: I do some consulting—quite a bit, in fact—with social workers, and their organizations, and
there’s a group of people that, frankly, aren’t paid enough, as a group. And they have a difficult job, and
face some of the most difficult tasks you can imagine, and yet, trying to motivate them, when they’re
sitting there trying work two jobs just to do a job is difficult. It’s just one of my pet peeves.

DP: It’s an understandable pet peeve. And it’s really the case, if you don’t pay people enough,
they’re going to be focused on their anxiety or their unfair treatment rather than on doing great work.
You want people focused on doing the work, rather than on the pay for the work.

BP: And to their credit, most of the people in the social work field got into it because they
wanted to do good work, and they wanted to help people, so that’s why…

DP: Of course.

BP: So that’s why they do it, and that’s why companies, organizations, or governments get away
with paying them less, because the social workers are intrinsically motivated.

DP: It also could be part of what we’ve made a choice as citizens about what we
value, and the same thing with teachers. Everybody thinks that teachers deserve to be paid more; no
one wants their taxes to go up in order to do that.

BP: Right. So, changing gears just a little bit. Three words: autonomy, mastery, and purpose.
What do they have to do with Motivation 3.0? Everything.

DP: The real pathway to enduring performance particularly for creative and conceptual tasks,
are those three things: autonomy, mastery, and purpose. Autonomy is self direction, mastery is our
desire to get better and better at something that matters, purpose is our desire to do what we do in the
service of something larger than ourselves. And those three building blocks are the building blocks that
really lead to sustained, enduring—not short term, enduring—motivation, particularly for the more
complex conceptual, creative things that more and more of us are doing on the job.

BP: I got to that part of the book and a paragraph popped up, and I laughed
because what it said was (you were talking about the Baby Boomers and the fact that they go through
stages), and Stage one, you say, they ask themselves “How the heck did I get to be 60?” And last
September, I asked myself the exact thing.

DP: Oh my god! And that’s the on purpose. And the argument there is that Baby Boomers have
a potential to unleash this avalanche of purpose because when a Boomer gets to sixty, they say, “How’d
I get to be 60?” which is kind of an alarming existential question for people, understandably. And then
they breathe a sigh of relief and they say, “60 isn’t that old any more,” which is true.

There’s this whole
math of demographic and health information and longevity information to point that out. Being 60
today, it’s qualitatively differently than being 60 in say 1950 and 1900. I mean qualitatively different.
And so, if you’re 60 today, maybe you have 25 good years left.
Well, then what happens is people look back 25 years when they were 35 and they say “Man that
happened fast! Are the next 25 years going to happen that fast? And if they are, when am I going to do
something that matters? When am I going to leave a mark on the world? What is my legacy going to be?
How am I going to be remembered? When am I going to live my best life? What is my purpose? What
contribution will I have made in my lifetime?”

Those are all very heavy questions, a little bit touchy-feely
in their own way. But as you know from the book, Bob, those questions are being asked on a scale that
is demographically unprecedented.
You’ve got 78 million people in the Boomer generation—and I’m at the caboose of the Boomer
Generation—you’ve got 78 million people in the Boomer generation, who started turning 60 a few years
ago, who will continue to turn 60 until 2024. That’s 100 Boomers turning 60 every 13 minutes in this
country. Every 13 minutes another 100 Boomers are having those kinds of conversations, asking those
kinds of questions. I mean, we’ve been talking for a little over 13 minutes, and 100 Boomers have
already turned 60 and had that reaction.

BP: It is amazing, and you’re right. That exact conversation is going on. I’m part of it; I have
friends that are part of it. You know, I’m kind of doing it. I’ve changed. I wrote a book this year. I’ve got
another book I’m writing. This is what I’m saying for myself even, and people I talked to, “You know, we
still have a lot of years left.”

DP: Yeah! That’s exactly right, Bob. So, multiply your experience or your conversations by 78
million, we’ve never seen anything like this!

BP: I think what you said is, “When the cold front of demographics meets the warm front of
unrealized dreams, It will result is a thunderstorm of purpose the likes of which the world has never
seen.”

DP: Hey thanks for that. A little bit over-written but…

BP: It was the best paragraph in the book.

DP: Oh man, alright! Thanks.

BP: And so last thing, you have a tool kit you gave us, for putting into practice the ideas in the
book, how do you at this point best recommend that we use the tool kit.

DP: I’m glad that you mentioned that because what I do … the book actually has, believe it or
not, a fairly careful architecture, and this is in response to some of my own frustrations as a reader. That
is, I tried to create a book of the sort that I wanted to read. So, the first the third of the book lays out the
science of motivation, and uses science to challenge these orthodoxies that the only way people will
perform is with carrots and sticks.

The second part of the book talks about those three elements,
autonomy, master, and purpose, and how some organizations are using those sorts of elements to
produce great results.
And then, so those are mostly kind of idea based, and one of my frustrations with books, certain kinds of
books, is that you have certain books that are about big ideas, and they say here’s the big idea, and they
make an argument for the big idea, and it’s often compelling and persuasive, and then it just ends, it
doesn’t give you any advice on how to respond to that, and so what I wanted to do is take a big part of
the book—or not a big part, but a third of the book—and give people some tools and tips on how to do
better.

And so, we’ve got a bunch of ideas for what individuals can do, what we can do in organizations, so
there’s an idea for how to do an autonomy audit in an organization, and this idea of how to do these
kind of one day bursts of autonomy called “FedEx Days” that have lead other companies to really great,
interesting innovations. There are a number of questions and things, self-diagnostics and questions that
people can ask themselves to help navigate their lives toward greater purpose. Advocate do-it-yourself
performance reviews as a way for people to achieve larger levels of mastery. There’s a list of other
books that I think people ought to read to help get better at this.
I even have in the toolkit a summary of the book, a twitter summary, a cocktail party summary, but also
a chapter by chapter summary, because I find myself as a reader sometimes reading a book, starting a
book, and then putting it down and life intervenes, and two weeks go by, and I pick up the book, and I’m
like, “Okay, what was this book about? What was going on?” And books unfortunately don’t have the
thing that TV episodes often have, things like “On our last episode…” that kind of bring you up to speed.
So there’s a chapter-by-chapter summary so that if people put down the book for two weeks, they can
pick it up and find out, “Oh, okay, this is what the Introduction said, this is what chapter one said, this is
what chapter two said, Great, I remember this all now, I can start on chapter three.” So, I’m delighted
that you mentioned that, because there is, amazingly enough, a very careful architecture to the book.

BP: I thought it was a terrific idea, I mean having that back there, because, just what you just
said, one of the things I’ve always hated about—I shouldn’t use the word ‘hate’, but dislike—about the
term ‘motivational speaker’ was, you could motivate someone and they’re all pepped up rah
rah, but come Monday, they go “Okay, now what do I do?” And they don’t know what to do.

DP: Motivational speakers are… that’s just basically a snickers bar of motivation, it just gives you
a sugar rush, it’s not nutritious, and it’s not rooted in any kind of science. And unfortunately it’s often
given even the phrase ‘motivation’ a bad name. Fortunately, there’s 50 years of science that takes a
much more serious, sophisticated, hard-nosed look at what really motivates us.

BP: Well, the tool kit is a great idea. I might steal it from you.

DP: Hey, listen, it’s open source man, you put a tool kit in your book.

BP: I will. Okay, any other last words before you go.

DP: I don’t think so. I’m really glad we got a chance to talk about sales, ‘cause I think it’s a really
interesting topic. If there are companies out there that are eliminating commissions for sales people and
are seeing sales go up, it again challenges our assumptions about why people do what they do. And I
think that good business practice, I think entrepreneurship itself, is built on challenging conventions and
overturning orthodoxies.

BP: Yeah, I think it’s a great idea. It’s been a tough sell in the past…

DP: Huge!

BP: … but I hope that the studies that you mentioned plus your book and other groups doing
it—I know some that are doing it, and having success at it—so I hope all of those things change the
turnaround for sales people. I really appreciate the time and thank you very much.

DP: Sure thing, Bob, my pleasure.

BP: Good luck with the book, and we’ll talk to you again soon.

DP: Okay, thanks, Bob. Cheers.

BP: Bye, Dan.

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