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.
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!