I have just finished reading a good book by Daniel Pink, called Drive: The Surprising Truth About What Motivates Us. This book talks about the difference between the old way of motivating people extrinsically by providing incentives (Type X, for eXtrinsic), usually monetary, to achieve business goals versus the new way of dealing with workers who are intrinsically motivated (Type I). While there were studies in this book that were familiar to me, I know that I read more business books than the average person and so, the studies may not be known by all. There were a number of ideas that came out of this book that were interesting to me.

In a prior life, I worked at a company that developed software that calculated and paid incentive compensation to employees. They were very much focused on companies that felt they were dealing with a workforce that was extrinsically motivated. The old adage that you get what you pay for was the norm of the day. At one of my clients, I found a compensation plan that was 75 pages long. How did people know what specific things they were supposed to do or if their pay was correct? We never figured that one out.

What we are seeing with our more junior members of the workforce is that they increasingly are interested in the intrinsic benefits of the job. They want to do a good job and as long as they are compensated adequately, they are motivated by doing interesting things. They want their companies to do the right thing.

Certainly we have all heard about Google and their 20 per cent time, where engineers can work on any project they find interesting one day a week. Google has benefited hugely from the 20 per cent time; products like GMail and Google News were developed on 20 per cent time. Younger engineers think of Google as the dream job, in part because of the freedom to explore. Before Google, 3M incorporated free time into their corporate strategy.  The most famous product developed in free time was Post-It Notes.

In another company that I was involved with that had a young workforce, the rank and file petitioned management to approve a program where you could wear jeans on Fridays if you donated $5 to charity. Management wisely agreed. All of the employees had a say in which charity was the recipient each month. Everyone participated and felt empowered.

This change from extrinsically motivated workers to intrinsically motivated workers is going on now. Partially it is a demographic surge. The younger employees in their early worklife are asking for it. In addition, old-line management have seen that the old way of incentive compensation just does not lead to long term success. It leads to gaming the system (look at the way that the Wall Street bankers were compensated). It leads to a never ending cycle of increasing incentives without a corresponding increase in productivity.

The most valuable section of the the book is called the Toolkit. In this section, Pink provides exercises, descriptions and experiments that you can use to help your company (or yourself individually) become more intrinsically motivated. He identifies and interviews 6 business thinkers who “get it”. These include Jim Collins, Peter Drucker and Gary Hamel. He introduces 15 books that help illuminate the Type I mindset. He even includes a link to an online test to see if you are Type I or Type X.

As owners, leaders and managers of our companies and organizations, it is incumbent upon us to develop environments that foster a sense of engagement for our staff.  As we look to develop our organizational culture, Daniel Pink gives us a playbook to use as a basis for engineering our own intrinsically motivating environment.