Policy experts and leading practitioners shared knowledge derived from current research, innovative programs, and interventions.
But it can also have this other function, as a platform for the candle. He gathered his participants and said: "I'm going to time you, how quickly you can solve this problem." To one group he said, "I'm going to time you to establish norms, averages for how long it typically takes someone to solve this sort of problem." To the second group he offered rewards. If you want people to perform better, you reward them. This is one of the most robust findings in social science, and also one of the most ignored. I'm an American; I don't believe in philosophy. Ladies and gentlemen of the jury, some evidence: Dan Ariely, one of the great economists of our time, he and three colleagues did a study of some MIT students.
He said, "If you're in the top 25% of the fastest times, you get five dollars. I spent the last couple of years looking at the science of human motivation, particularly the dynamics of extrinsic motivators and intrinsic motivators. If you look at the science, there is a mismatch between what science knows and what business does. They gave these MIT students a bunch of games, games that involved creativity, and motor skills, and concentration.
If you're the fastest of everyone we're testing here today, you get 20 dollars." Now this is several years ago, adjusted for inflation, it's a decent sum of money for a few minutes of work. Answer: It took them, on average, three and a half minutes longer. What's alarming here is that our business operating system — think of the set of assumptions and protocols beneath our businesses, how we motivate people, how we apply our human resources— it's built entirely around these extrinsic motivators, around carrots and sticks. And the offered them, for performance, three levels of rewards: small reward, medium reward, large reward.
That's actually fine for many kinds of 20th century tasks. If-then rewards work really well for those sorts of tasks, where there is a simple set of rules and a clear destination to go to. The solution, if it exists at all, is surprising and not obvious. If you do really well you get the large reward, on down. As long as the task involved only mechanical skill bonuses worked as they would be expected: the higher the pay, the better the performance. But once the task called for even rudimentary cognitive skill, a larger reward led to poorer performance.
And what worries me, as we stand here in the rubble of the economic collapse, is that too many organizations are making their decisions, their policies about talent and people, based on assumptions that are outdated, unexamined, and rooted more in folklore than in science.
And if we really want to get out of this economic mess, if we really want high performance on those definitional tasks of the 21st century, the solution is not to do more of the wrong things, to entice people with a sweeter carrot, or threaten them with a sharper stick. The good news is that the scientists who've been studying motivation have given us this new approach.
In America, law is a professional degree: after your university degree, you go on to law school. I give you a candle, some thumbtacks and some matches. You've got an incentive designed to sharpen thinking and accelerate creativity, and it does just the opposite. What's interesting about this experiment is that it's not an aberration.
When I got to law school, I didn't do very well. I, in fact, graduated in the part of my law school class that made the top 90% possible. I want to make a hard-headed, evidence-based, dare I say lawyerly case, for rethinking how we run our businesses. It's created in 1945 by a psychologist named Karl Duncker. And I say to you, "Your job is to attach the candle to the wall so the wax doesn't drip onto the table." Now what would you do? And eventually, after five or ten minutes, most people figure out the solution, which you can see here. This has been replicated over and over again for nearly 40 years.
Some examples of some kind of radical notions of self-direction. A few times a year they tell their engineers, "Go for the next 24 hours and work on anything you want, as long as it's not part of your regular job.
You don't see a lot of it, but you see the first stirrings of something really interesting going on, what it means is paying people adequately and fairly, absolutely — getting the issue of money off the table, and then giving people lots of autonomy. Work on anything you want." Engineers use this time to come up with a cool patch for code, come up with an elegant hack.