There is a mismatch between what science knows and what business does
DANIEL Pink puts forward the idea that there is currently a mismatch between what science knows and what business does.
Pink presents the Candle Problem, an experiment invented in 1945 by Karl Duncker. The experiment works as follows: I bring you into a room and give you a candle, a box of tacks, and some matches. Your job is to attach the candle to the wall so that the wax doesn’t drip onto the table. This is a seemingly simple problem, but the problem is difficult to solve because of the difficulty of overcoming something known as “functional fixedness”. The items are presented in such a way that there is a “mental block against using [them] in a new way that is required to solve a problem” (Duncker 1945). Watch the video to see a good explanation of the Candle Problem.
Now here is the interesting thing. At Princeton University, an experiment was conducted using the Candle Problem to look at the power of incentives. Two groups of people were taken and the first group were offered individual monetary rewards if they solved the Candle Problem quickly. The control group were not offered an incentive. The result was amazing, the incentivised group performed significantly worse than the control group … external incentives reduced performance.
Pink makes a number of insightful points on motivation, in summary:
- As long as a task requires only mechanical skill, bonuses work as they would be expected – the higher the pay, the better the performance.
- Once a task calls for even a rudimentary amount of cognitive skill, a larger reward often leads to poorer performance.
- Extrinsic motivators, which Pink refers to as “if-then” rewards, often destroy creativity.
- In early 2009, economists at LSE looked at pay for performance schemes and concluded that “financial incentives … can result in a negative impact on overall performance.”
- The secret to high performance isn’t rewards and punishment but rather that unseen intrinsic drive, the drive to do things for their own sake, the drive to do things because they matter.
Autonomy, mastery and purpose
The solution to achieving high performance in business in the 21st century will be based on intrinsic motivation, on the desire to do things because they matter, because they are interesting, and because they are important. Pink argues that this new operating system for business is to be based around 3 elements:
- Autonomy – the urge to direct our own lives;
- Mastery – the desire to get better and better at something that matters; and
- Purpose – the yearning to do what we do in the service of something larger than ourselves.
As Pink argues, if we can repair the mismatch between what science knows and what business does, and bring our notions of motivation into the 21st century, we can strengthen our businesses, solve a lot of those Candle Problems … and maybe even change the world.
Book version of this speech
I wrote Dan an email to thank him for this great speech. He informs me that the book versionof the speech will be released in the US in December and in Australia around April or May. If the book is even half as insightful as the speech, I think it will be well worth reading.