Key Points from the Lecture on Business Motivation

Introduction

• Speaker reveals a personal anecdote about attending law school and doing poorly, which was a humorous confession.
• The speaker aims to make a case for rethinking business practices.

Candle Problem

• Created by: Karl Duncker in 1945, used in behavioral science experiments.
• Objective: Attach a candle to a wall so the wax doesn't drip on the table.
• Common Attempts: Thumbtack candle, melt candle to stick to wall.
• Solution: Overcome functional fixedness by using the box as a platform.

Experiment by Sam Glucksberg

• Purpose: Test the power of incentives.
• Method: Two groups tasked with solving the candle problem:
  • Group 1: Timed for norms.
  • Group 2: Offered monetary rewards.
• Result: Incentivized group took longer, showing rewards can dull creativity.

Implications for Business

• Mechanistic Tasks: Rewards work for simple, rule-based tasks.
• Complex Tasks: Rewards narrow focus and hinder creativity.
• Modern Work: Requires creative, right-brained, conceptual abilities.

Evidence from Research

• Studies: Conducted by economists (Dan Ariely, MIT, LSE).
• Findings: Higher rewards can lead to poorer performance in cognitive tasks.

Mismatch in Business

• Current business practices rely heavily on extrinsic motivators (carrots and sticks).
• These are outdated, especially for 21st-century tasks.

New Approach to Motivation

• Intrinsic Motivation: Based on autonomy, mastery, and purpose.
  • Autonomy: Self-direction is more effective than traditional management.
  • Mastery: The desire to improve at something meaningful.
  • Purpose: Doing work that serves a larger goal.

Examples of Autonomy in Business

• Atlassian: FedEx Days and 20% time for engineers to work on projects of choice.
• Google: 50% of new products originate from 20% time.
• ROWE (Results Only Work Environment): No schedules, just result-based work.

Case Studies

• Wikipedia vs. Encarta: Demonstrates the success of intrinsic motivation over extrinsic financial incentives.

Conclusion

• Science shows that traditional rewards are limited in effectiveness.
• Intrinsic motivation leads to better creativity and performance.
• Businesses should adapt these insights to improve outcomes and possibly change the world.

Final Thought

• Aligning motivation strategies with scientific understanding can lead to stronger businesses and solve complex problems.