Yesterday I wrote about how we are not rational. Today, we look at how sometimes we don’t even see things that are right in front of our eyes! Take a look.
Did you see the bear the first time? I know when I first did this test, I didn’t. How long did it take you to notice the changes in the 2nd video? I didn’t catch it until about 3/4 the way through and I was looking for it.
Riding a bike My 4-year old son just got his bike a few weeks ago. He is in heaven. Ask him what his favorite thing in the world to do is, and he will tell you, “Ride my bike!” He wants to ride it everywhere…which is fantastic. He is definitely motivated!
I have one problem…he won’t ride it without training wheels.
We tried. The first four days I was out with him every day, running up and down the sidewalk, holding on to the bike as he peddled. But he was too scared. He would stop peddling anytime the bike tilted. He would always look back to make sure I was there (which caused him to turn the wheel and tilt the bike to one side and then stop peddling). He would stop and say he wanted to go slower.
And the problem was he was actually doing a good job riding on his own. He was able to go a fair way with me just running beside him and not supporting the bike. I would let go and he would be riding just fine.
The largest part of our business is developing communications for sales incentive plans. We create presentations, develop plan books, and design flash and other forms of communication. We got into this work by accident (one client many years ago asked us to create a “meeting in a box” for his IC plan – the rest, as they say, is history), but now we embrace it and have carved out a niche. That niche is taking highly analytical and dry plan data and making it more interesting, more engaging, and more motivating for the sales representative. Over the past 10 years we have done just this for thousands of plans and hundreds of thousands of participants.
We strive to tell a visual and emotive story with our work. We work hard at capturing the vital information that is important to a sales person and making that information understandable and engaging. I like to think we do a good job – when our clients allow us to. You see, telling a story about incentive compensation and creating captivating visuals to convey that information isn’t easy. It requires that we make choices about what information we share. It means that we may have to simplify the message. It may mean changing how we present and what types of communication that we use. This, for some clients, is easier said than done.
Salespeople who are engaged in their roles, who are motivated to succeed, and who’s goals are aligned with the organizational goals have been shown to have a significant impact on helping an organization succeed (Badovick, Hadaway, & Kaminski, 1992). Successful organizations understand this and try to keep their sales employees motivated and engaged through a variety of motivational methods – mostly involving extrinsic rewards.
While much has been much written about how extrinsic rewards may have a detrimental effect of on a sales person’s intrinsic motivation (Deci & Ryan, Kohn, or Pink – note: there is also a lot of research on how this extrinsic/intrinsic effect can be mitigated) there is little disagreement on the short-term impact that extrinsic rewards can have on a company’s performance . The short-term benefit of extrinsic rewards assures us that these rewards will be used in businesses no matter what Dan Pink has to say on the topic. However, this does not mean that these types of programs can’t be improved.
Successful organizations and leaders of the future not only need to focus on the optimization of extrinsic reward programs but also on moving other levers within the organization that can drive sales motivation. Using the Four-Drive Model of Employee Motivation (Lawrence and Nohria, 2002) provides a clear framework for how to do this.
As some of you might know, I am working on my PhD in I/O Psychology and have been for many years. Too many years actually – which is why I think my wife insisted that I attend a five day Dissertation Writers Retreat held by Capella University just outside of Chicago. So for the last five days I’ve been working on Chapter 4 of my dissertation which is the results section. I’ve been having a blast inputting data, crunching numbers, running statistical tests and analyzing the results and what I found out is surprising…at least it was for me.
Susan and I just had the wonderful pleasure of spending a day interviewing 11 people at Oak Ridge Hotel & Conference Center to try to uncover their secret – because they have gotten the formula right on employee motivation. Anyone who has ever stepped into their facility outside of Minneapolis can attest to the customer service mentality that every employee exhibits – from the front desk, to housekeeping, to the chefs, groundskeepers, and even in accounting. There is a definite difference in how the majority of these employees “show up” at their job everyday and how they view and take care of their “guests”. They are truly a company that is doing something right. While we haven’t had time to fully analyze the interviews (we will in the upcoming weeks), there are a few things that I can say definitively:
1. Leadership counts – the one overriding conclusion that hit us in the face was how important leadership is in this process – they need to be present, genuine, and focused on the right things.
2. Its not about the money – I was a little surprise to hear (actually to NOT hear) about bonus plans or contests or other recognition that had a big dollar value. It wasn’t important. It didn’t drive their day-to-day activities or play an integral part in their motivation.
3. It is about the team – teamwork was an overriding theme in all of the interviews that we did. It wasn’t ever about “my job” but instead about serving the customer. If that means that top managers have to change sheets, then that is what happens.
4. Genuine recognition rejuvenates – real, honest recognition that is done on a regular basis, in public, helps reinvigorate and help drive the culture. Knowing that their work is important and recognized keeps people engaged.
5. Its about people – employees were seen as people first. Management spent time getting to know them, getting to understand who they were, spending time finding out about their families and interests. They care and it shows.
Over the next few weeks we will let you know more about our findings and get in depth with some analysis. Oak Ridge Hotel & Conference Center has been kind enough to give us access to their people and allow us to share our insights with you. There is something to learn here if you are interested in creating a workforce that is motivated and engaged. Stay tuned!
Kurt
The end of the game
So Amazon is leaving the incentive market which they just entered three years ago. From all reports it isn’t because the venture isn’t profitable, but instead it is about ensuring that their brand and their customer service reputation are not sullied. Paul Hebert in his blog wrote, “the decision was made to drop fulfillment through incentive programs due to customer service issues. Specifically, the recipient, if they had problems with their order, would call Amazon for resolution but Amazon would have to refer them back to the incentive company – who in turn would do the due diligence to fix the problem. From Amazon’s point of view this created a negative impression of their customer service.” In a nutshell, they are taking a hit on millions of $ to make sure there is no negative impact on the billions of $ that they do in their non-incentive business. In my mind, that is a pretty smart move (one that you wouldn’t see a lot of businesses making). Now I’m sure there are other factors (i.e., tax issues, not controlling the customer relationship, etc…). Nothing is ever quite as black and white as it seems.
In the short time that Amazon was in the market, they shook it up. They offered a new way of fulfilling incentive program offerings. With their great number of items, their back end processing and handling, drop ship expertise, and their low price points, Amazon was able to provide even the smallest incentive companies with a very sophisticated e-catalog of incentive goods. No longer did an incentive house need to have the large capital expense of a warehouse and stocking products. Amazon was able to provide the back-end seamlessly for a price that couldn’t be beat.
Playing against Amazon
I was part of a large pitch (as a partner with a traditional incentive house) last fall to a company that loved what we did, trusted our customer service, thought that our creative approach was the best and liked the way we brought behavioral science into the process (i.e., The Lantern Group) – but, ended up going with a different company because they could offer more merchandise at a lower cost point. How did that other company do it – they used Amazon as their fulfillment partner. At that point, I thought I saw the writing on the wall – that the days of making large margins on merchandise were all but over. How could the traditional companies compete, when smaller, more nimble and aggressive firms could come in and under-price while having a larger item selection and great fulfillment services. In the debrief with the company about why we lost the business, the purchasing agent said, “…this is the wave of the future, all [incentive] companies should be doing this.” It was going to be a new world – and I was excited!
Changing the game
For years the pricing model used by incentive companies has been margin based. While there is nothing wrong with this conceptually, it does create an interesting dynamic. Merchandise is the cash cow for these companies. Without this, many of the companies will fail. There is an underlying need to get people “into the warehouse.” When I started my career (many eons ago) I was naive enough to think that when I was hired on at one of these incentive companies that I was going to work for a consulting firm that was trying to find the best way to motivate and engage employees. What I found out was they were all for that – as long as the way to do motivate and engage led through the warehouse (I’m exaggerating a little here for emphasis, but there was an underlying culture of this).
While that culture has shifted slightly over the years, it is still present in the industry. If Amazon was going to be able to undercut prices because of their buying power – then incentive companies were going to be forced to change their model. This would mean finding other ways to make money – which would lead them to finding other ways to increase motivation. The benefit would have been that these companies would have created a larger toolbox with more tools and thus not fall to the old idiom “when you only have a hammer, every problem looks like a nail.” This would mean better solutions to motivation problems.
The next competitor
While Amazon might be leaving, they showed that there was a desire in the marketplace for something like this. I don’t think there is another company right now that could fill that role, but that doesn’t mean in the future there couldn’t be. So, with that in mind, it is important to think about the next game. What will this mean for the traditional incentive houses, for the mid or small sized performance improvement firms? Will someone take that bold step to change the game and bring in a different set of plays and players or will they exhale a deep breathe, thankful the other team forfeited, and go back to their old ways of playing? Right now, we’ll just have to wait and see…
Please share your thoughts and rants on this…would love to get a nice dialogue going.
Kurt
If you know someone that might benefit from this article pay it forward and pass it along.
I had a question poised to me in a group that I’m in regarding which is more effective/important, recognition or incentives? It got me to thinking about how we tend to try to simplify things into easily digestible answers (i.e., make the world black and white). It isn’t so simple. In reality, a truly effective motivational program needs to include both. It also needs to include a focus on intrinsic motivators (i.e., the three other aspects of the 4-Drive model: Bonding & Belonging, Challenge & Comprehend, and Define & Defend). When we look at motivation holistically, we have a number of levers that we are able to pull as leaders. The fact of the matter is, there is no one silver bullet. Everyone has a plethora of motivators that drive them everyday.
That being said, it is important to understand what those key motivators are. Asking people is obviously a key component of that, but I’ve found that often what people ask for, isn’t really what motivates them the most. It is important to get beyond the surface to the underlying motivators that people have. For instance, research that I’ve been part of shows that the majority of sales people will ask for cash if given the choice for an incentive reward (roughly 74% of the time), yet, we typically see a larger increase in sales performance for non-cash awards (on average about 15 – 25% better). Because of human nature, we don’t always know what really motivates us or we have been conditioned to respond in a particular manner to these types of questions. The difficulty is being able to identify what those real motivators are.
My belief is that incentive programs have to get more individualistic. That companies need to provide managers with more tools to be able to determine real motivators and set up individual programs for their teams. Of course, this is easier stated than done. The first step however is asking them. The second step is identifying peoples underlying drives. The third aspect is to ask them again after assessing their motivational profile, using probing questions to get at peoples real motivation.
Would love to hear people’s thoughts on this topic. What have you seen in your own business on recognition or incentives? How do you optimize them?
A short deck on impacting the motivational impact of your incentive plans
The first drive in the Four Drive Model of Employee Motivation is the drive to Acquire & Achieve. This is typically the drive that most organizations focus on when they are trying to find a lever to influence employee motivation.
However, companies often get too caught up in the financial aspects of this drive (i.e., how much of a raise can we give, what is our targeted incentive/bonus payout, etc…).
The following are three quick tips to help you think about how to impact this drive and increase employee motivation.
1. It’s not just about the money. It is so much more…This drive also includes the drive to achieve. Achievement takes on a number of different forms. Think about this in terms of grades – there is no monetary component to this, yet we are driven to try to get an A. In organizations, recognition is a very powerful motivator because it recognizes individuals or group achievement (kind of like a report card). Organizations can tap into the drive to achieve by focusing on ensuring that recognition is done correctly (e.g., timely, relevant, and appropriate to the effort/result).
Achievement is also about setting realistic goals that can be achieved. Short-term milestones are elements to use to help keep this drive up. One way to think about this is to think about the need to reinforce achievement on at minimum every 5 weeks. If you don’t have a milestones set up that fall within that time frame, you will tend to lose people. Make sure that you celebrate those milestones as well. One thing that we are trying to get better at The Lantern Group is celebrating when a project or milestone is done. We get so caught up in the next project or next event that we don’t take the time to stop and congratulate ourselves on a job well done.
2. Add Some Perks. While we tend to focus on the big items like pay and bonuses with this drive, some of the more powerful levers that we get to pull are smaller “perks” such as office space, titles, parking spots, flexibility to work from home and other things that help satisfy the Achieve drive.
In addition, there are a number of small perks that also tie into the Acquire side of the equation, such as pizza Fridays, movie days, lunch seminars, discounts on classes, days off, foosball or pool in the office, employee of the month/quarter/year… You will notice that a number of these also contribute to the other three drives of Bond & Belong, Challenge & Comprehend, and Define & Defendsee also Four Drive Model
3. Improve your Total Rewards Communication. Too many times we’ve worked with companies that offer fantastic total rewards – not just their base salary, but their benefits, bonus programs, culture and recognition opportunities; however, no one at the company knows about these programs! This is because they are outlined in a legal terms in a five different 50 page HR documents. It is vital that you market what you are providing to people in a way that will capture their attention and convey the big picture.That means that you have to overcome silos within the organization and market your Total Rewards as a comprehensive program that highlights the offerings from across the organization.
Also, make sure that your Total Reward communications are not just a one-time effort at the beginning of the year, but instead a campaign that highlights various aspects of your offering throughout the year and keeps people engaged and charged up.
While the concept behind these ideas is simple, the implementation of them isn’t always as easy. If you need help, please give us a call. We can help you work through the issues and improve your employee’s motivation!
Kurt
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