A Liminal Truth: Money Doesn’t Matter

I learned about an idea that could not only save you and your business enormous sums of money but also minimize your frustrations this week. Interested?

Having worked with sales organizations for years, I used to subscribe to the unflattering notion that salespeople are “coin-operated”— motivated primarily by pay. I had been taught that the way to incentivize more sales is to pay salespeople for a piece of the action, especially through structured bonuses with accelerators, stock options and trips.

While recovering from minor knee surgery, I read Daniel Pink’s Drive: The Surprising Truth About What Motivates Us. I realized, through my reading, that like most of us, I like having a casual relationship with Truth: I’ll take her out when she’s arm candy, but I wouldn’t bring her home to Mom! Well, this weekend, Pink not only dropped off  Truth and me at Mom’s doorstep, but he rang the doorbell, ran off, and he left me to explain this shocking newcomer, dressed in her best Lady Gaga plumage!!

The truths from Pink led me to reflect on why the unconventional approaches to sales compensation for two sample mid-tier businesses “makes sense”/works for them. Both seemed to ignore the “Truth” of what motivates salespeople. One company took its sales team off commission and paid above-market wages —unheard of in that industry. Another chose to pay its staff above market-rate commissions.

So if these business owners were to use pay incentives to elicit heuristic (discovery-based) behaviors involving creative problem solving, that incentive would quickly extinguish creativity. Pink calls this the [Tom] Sawyer Effect: Rewards turn play into work (p.226). “Pay for performance” would end up killing the very global skill set they’re trying to deliver to their customers! Aren’t these business owners foolishly increasing their overhead and reducing the upside for their business?

Benefits of motivational forces beyond money

Here’s why they are not. (See my earlier blog on the topic) These business owners took the issue of money off the table for their salespeople. The sales force no longer worries about paying the mortgage or putting food on the table. Instead, they are rewarded for exercising their creativity and passion to develop long-term relationships with customers: the outcome the owners care about.

Both owners sought heuristic behaviors from their sales staff by charging them with delighting their customers. For example, how does one measure and reward a salesperson for “doing the right thing?” What actions does the salesperson take to keep the customer buying again and again? A heuristic task requires personal judgment, creativity, and initiative but no clear algorithmic, formulaic path of action.

My epiphany on motivation is causing me to reevaluate my professional mindset. How should you reward heuristic behaviors?

Next week I will share ways to encourage heuristic behaviors by cultivating autonomy, mastery and purpose.

Toolkit:

Would you like to take Truth out for a spin? See if you look at the world from a heuristic (Type I) or algorithmic (Type X) orientation. Take Daniel Pink’s free survey. Afterwards, comment here on your orientation results!

Photo by mathplourde

A Liminal Truth: Money Doesn’t Matter is republished from American Business Advisors Blog

Comments

Post a Comment

Popular posts from this blog

Season’s greetings to you this holiday season!

Dear Clients and Friends: Season’s greetings to you this holiday season!            As is our tradition during December, we want to publicly thank our Creator God for His love and faithfulness! The Holiday Season is a very special time for the Jewish and Christian faiths because they share spiritual beliefs rooted in the Torah (the first five books of the Bible) and they both celebrate the experience of faithfulness of the God of Abraham, Isaac, and Jacob. Following is a brief summary of why each celebrates. HANUKKAH           In Hebrew, the word “Hanukkah” means “dedication.” In 168 B.C.E. the Greeks seized the Jews’ holy temple and dedicated it to the worship of Zeus. Some Jews were afraid of the Greek soldiers and obeyed them, but most decided to take back the temple and rededicate it to the worship of God. After three years of fighting, the Jews defeated the Greek army, despite having fewer men and weapons. After rebuilding the Temple they decided to have a large dedication c
Read more

Liminal Dimensions: Completing “Theory U”

Managing our companies provides the most strenuous leadership challenge: though owners must lead by example, they in fact cannot lead others where they themselves have not gone! Your competitive advantage as a firm is to harness the nascent future within your employees. Go beyond respecting to encouraging, celebrating and liberating your employees to bring their full selves to your firm. (more…) Liminal Dimensions: Completing “Theory U” is available on American Business Advisors in Denver
Read more

What Industry Trends Mean for the Future of Your Financial Planning Practice: Blue Ocean Spotlights Tectonic Plate Shifts

At a recent Colorado Financial Planners Association (COFPA) meeting, Sameer Somal, Blue Ocean founder, gave a sobering snapshot of things every financial advisor needs to consider: what’s next for your practice. When an industry like financial planning is undergoing rapid tectonic plate shifts, the impact of those shifts create a tsunami of change to every participant in the industry—not only advisors--especially their clients. I rarely use superlatives like “every” but consider the following profile of the financial advisory space: Average age of a financial advisor is 50+ 10% are 60 and older Of the advisors within two years of retirement age more than half do not have a written succession or contingency plan 75% of advisors have never had a third party valuation of their firm More than 40% of approximately 315,000 advisors will transition their practices over the next 15 years. Where are their successors coming from? (more…) What Industry Trends Mean for the Future of
Read more