Now is the age of Motivation 3.0!

The current societies and business world need to adopt the new business operating system built around intrinsic motivators.

About five decades ago, two scientists insisted that they discovered methods to drive intrinsic motivation. Since then, numerous scientific studies have produced theories and dynamics on the new motivation system. Unfortunately, business hasn’t caught up to these new understandings. If we want to strengthen our companies, elevate our lives, and improve the world, we need to close the gap between what science knows and what business does.

Daniel H. Pink - a best-selling writer with provocative views on employ-management relations

Daniel H. Pink is the author of four provocative books about the changing world of work — including the long-running New York Times bestseller, A Whole New Mind, and the #1 New York Times best seller, Drive. His books have been translated into 32 languages. Dan lives in Washington, DC, with his wife and their three children.

New business operating system

The author emphasizes that the new business operating system for the 21st century needs to be built around autonomy, mastery, and purpose.

Our current business operating system - which is built around external rewards and punishment - doesn't work anymore and only harms creativity. This system endorses the overly simplistic view that human beings tend to prefer rewards to punishments. On the other hand, there is a new operating system which drives intrinsic motivations so that we can fulfill the desire to direct our lives and the urge to get better at something in order to serve our own purposes. We need to upgrade the old system to this new one.

Replacing carrots and sicks, the modern societies need new motivation methods.

The author intends to introduce a new motivation method to the business fields.

Half a century ago, behavioral scientists started to recognize the limitations of the motivation systems based on rewards and punishments and seek for new systems. So far, the scientific studies have shown significant progresses so that some of them could readily be put into practice. However, such progresses are totally unknown to business fields. The old system still prevails in our societies and there are no efforts to upgrade to new systems. Our societies and the business fields should consider what the science suggests.

The author wants to make suggestions to improve the carrot-and-stick motivator

It is an outdated idea that human behaviors can be controlled by rewards and punishment. The current motivation method, called carrots-and-sticks was built under the assumption that human beings would pursue rewards and avoid punishments. Such a simplistic view is inapplicable in the 21st century. We need new motivators to stimulate more complex human natures.

The current societies and business world need to adopt the new business operating system built around intrinsic motivators.

About five decades ago, two scientists insisted that they discovered methods to drive intrinsic motivation. Since then, numerous scientific studies have produced theories and dynamics on the new motivation system. Unfortunately, business hasn’t caught up to these new understandings. If we want to strengthen our companies, elevate our lives, and improve the world, we need to close the gap between what science knows and what business does.

1. Introduction

The research on a new kind of motivator by Harlow and Deci

Human beings have a biological drive that includes hunger, thirst, and sex. We also have another long-recognized drive: to respond to rewards and punishments in our environment. But in the middle of the twentieth century, a few scientists began discovering that humans also have a third drive—what some call “intrinsic motivation.” For several decades, behavioral scientists have been figuring out the dynamics and explaining the power of our third drive. Alas, business hasn’t caught up to this new understanding. If we want to strengthen our companies, elevate our lives, and improve the world, we need to close the gap between what science knows and what business does.

2. The Rise and Fall of Motivation 2.0

The current human operating system, which cannot handle the complexities of the modern world and fails to fulfill its role, needs to be upgraded into the new system.

Societies, like computers, have operating systems—a set of mostly invisible instructions and protocols on which everything runs. The first human operating system—call it Motivation 1.0—was all about survival. Its successor, Motivation 2.0, was built around external rewards and punishments. That worked fine for routine twentieth-century tasks. But in the twenty-first century, Motivation 2.0 is proving incompatible with how we organize what we do, how we think about what we do, and how we do what we do. We need an upgrade.

When carrots and sticks encounter our third drive, strange things begin to happen. Traditional “if-then” rewards can give us less of what we want: They can extinguish intrinsic motivation, diminish performance, crush creativity, and crowd out good behavior. They can also give us more of what we don’t want: They can encourage unethical behavior, create addictions, and foster short-term thinking. These are the bugs in our current operating system.

However, carrots and sticks can be effective for rule-based routine tasks—because there’s little intrinsic motivation to undermine and not much creativity to crush. And they can be more effective still if those giving such rewards offer a rationale for why the task is necessary, acknowledge that it’s boring, and allow people autonomy over how they complete it. For non-routine conceptual tasks, rewards are more perilous—particularly those of the “if-then” variety. But “now that” rewards—non-contingent rewards given after a task is complete—can sometimes be okay for more creative, right-brain work, especially if they provide useful information about performance.

3. The New Operating System

The new operating system whose ultimate goal is the maximization of purpose nurtures autonomy, mastery and flow to stimulate the intrinsic motivations

Motivation 2.0 depended on and fostered Type X behavior—behavior fueled more by extrinsic desires than intrinsic ones and concerned less with the inherent satisfaction of an activity and more with the external rewards to which an activity leads. Motivation 3.0, the upgrade that’s necessary for the smooth functioning of twenty-first-century business, depends on and fosters Type I behavior. Type I behavior concerns itself less with the external rewards an activity brings and more with the inherent satisfaction of the activity itself. For professional success and personal fulfillment, we need to move ourselves and our colleagues from Type X to Type I. The good news is that Type I’s are made, not born—and Type I behavior leads to stronger performance, greater health, and higher overall well-being.

Our “default setting” is to be autonomous and self-directed. Unfortunately, circumstances—including outdated notions of “management”—often conspire to change that default setting and turn us from Type I to Type X. To encourage Type I behavior, and the high performance it enables, the first requirement is autonomy. People need autonomy over task (what they do), time (when they do it), team (who they do it with), and technique (how they do it). Organizations that have found inventive, sometimes radical, ways to boost autonomy are outperforming their competitors.

While Motivation 2.0 required compliance, Motivation 3.0 demands engagement. Only engagement can produce mastery—becoming better at something that matters. And the pursuit of mastery, an important but often dormant part of our third drive, has become essential to making one’s way in the economy. Indeed, making progress in one’s work turns out to be the single most motivating aspect of many jobs. Mastery begins with “flow”—optimal experiences when the challenges we face are exquisitely matched to our abilities. Smart workplaces therefore supplement day-to-day activities with “Goldilocks tasks”—not too hard and not too easy. But mastery also abides by three peculiar rules. Mastery is a mindset: It requires the capacity to see your abilities not as finite, but as infinitely improvable. Mastery is a pain: It demands effort, grit, and deliberate practice. And mastery is an asymptote: It’s impossible to fully realize, which makes it simultaneously frustrating and alluring.

Humans, by their nature, seek purpose—to make a contribution and to be part of a cause greater and more enduring than themselves. But traditional businesses have long considered purpose ornamental—a perfectly nice accessory, so long as it didn’t get in the way of the important things. But that’s changing—thanks in part to the rising tide of aging baby boomers reckoning with their own mortality. In Motivation 3.0, purpose maximization is taking its place alongside profit maximization as an aspiration and a guiding principle. Within organizations, this new “purpose motive” is expressing itself in three ways: in goals that use profit to reach purpose; in words that emphasize more than self-interest; and in policies that allow people to pursue purpose on their own terms. This move to accompany profit maximization with purpose maximization has the potential to rejuvenate our businesses and remake our world.

Considering a new motivation system for the Korean Business

Financial Supervisory Service investigates on LH Corp. CEO’s stock option

Mr. Lee Ji-Song, the CEO of LH Corporation received the 50 thousand shares as a stock option from Hyundai Eng. when he was the president of Hyundai Construction Corp. in 2005. But it was illegal for him to receive them. Under the law, board members and executives of the parent company are prohibited from receiving stock options from the subsidiary company. (Hyundai Construction is a parent company of Hyundai Eng. (----) Legal experts say it is apparent that Mr. Lee violated the laws. (MK News, August 31, 2011)

Since the financial crisis in 1997, the Korea’s capital market has become completely open to the foreign direct investments, and the Korean business community has undergone tremendous changes. One of the most significant changes of is implementing the merit-based HR system replacing the seniority-based one. In the beginning, the merit-based system was considered to be rational and even iconoclastic in a way. Especially, the stock option drew publicly envious attention as a symbol of the merit-based system. We often heard about the news that companies offered excellent employees and star performers enormous stock options. On the other hand, we frequently see its ill effects as the above article. What on earth is in their mind when they pursue unethical rewards?

According to the author, there are two basic problems in the merit-based system. First, the merit-based system is meaningful only when the company is constantly growing. Under the constant growth, the company can increase earnings and share them with star performers through incentive packages like a stock option. But if the company is in a low growth industry and has only marginal profits annually, then there is no longer any reason for such incentive packages. Accordingly, when the stock option was first introduced, the Korean business community should have selectively adopted it because there were certain types of industries where the growth possibilities were low. Secondly, the external rewards could drive human desires to the extreme. Even though many companies adopted the merit-based HR system, the traditional seniority-based system was not completely abolished and still remains as one of the main elements in “the Korean operating system.” Under the circumstances, it is hardly acceptable that within an organization the small elite group gets special treatments. In other words, the Korean business community should have taken more time understanding the nature of the merit-based incentive systems and judging their adaptability. In my view, such a careless adoption was one of the main reasons why some people were driven to the unethical and extreme desires.

In this context, it is apparent that the merit-based system is by no means superior to the old system. We had to be more cautious when we decided to implement it in our business system. However, it is not my wish to return to the old system. Rather, I hope that business owners and decision makers in Korea read this book. So that they can realize there is an alternative choice to improve the current motivation system.