How do you create a culture that is primed to perform?
What does science say about changing organizational culture?
Is there any tool that can help measure and track your culture over time?
Build A Culture Designed to Perform
Neel Doshi and Lindsay McGregor have just written a book, Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation, that answers these questions and more. It is written as a guidebook for those who know how important a strong culture is, but they don’t know what steps to take to create one. I recently spoke with Neel and Lindsay to learn more.
The Magic of a Great Culture
Often people think of culture as something that is like art, but you say that the “magic behind great culture is actually an elegantly simple science.” Tell us more about your research.
We all know that culture is important. We’ve felt it. Some cultures are filled with fear and stress, while others inspire creativity and enthusiasm. What has eluded us, however, is why. Our research provides an “elegantly simple” answer: culture is what tells your people why they should work, and why they work is what determines how well they work.
Here’s the kicker though: not all “whys” are created equal, and too often, cultures are designed to motivate using the destructive “whys.”
Our answer is not only elegantly simple, but also empirically powerful. Using our total motivation framework, we’ve measured the motives of over 20,000 people at more than 50 major institutions. We’ve observed an incredibly strong relationship between their culture and performance metrics like sales and customer experience. In one study, employees with high levels of total motivation (or ToMo for short) generated 38% more in revenues than their low ToMo counterparts.
Culture is an entirely quantifiable and engineerable asset—and the most important one. ToMo gives leaders the tools to unlock the highest levels of performance in their people and company.
Why You Work Determines How Well You Work
What is total motivation? How does this drive performance?
Total motivation is simply the notion that why you work determines how well you work. The effectiveness of the “why” depends on its distance from the work. Let’s take a mid-level management consultant for example:
Play is when you work for enjoyment of the work itself. Play is the most powerful motivator: twice as potent as purpose and almost three times more than potential. Our fearless consultant might enjoy conceptual thinking and the process of breaking down big puzzles into digestible, actionable pieces.
Purpose is when the outcome or impact of the work is why you do it: maybe she values seeing how a new strategy improves a client’s well-being and helps his customers.
Potential is when the work enables a future outcome aligned to your personal goals: she might want to manage operations at a big company or a company of her own down the line, and this job will help her achieve that.
Emotional pressure is when we work to avoid feelings like guilt, shame, peer pressure or disappointment. Imagine if our heroine remained a consultant because her parents pressure her to do so, or because it is one of a few jobs considered prestigious by her friends and peers.
When we work to gain rewards or avoid punishment, we are working because of economic pressure—like if the consultant remained at work due to the perks and paychecks.
Finally, inertia is the last and most destructive motive—about three times more so than emotional pressure and twice as much as economic pressure. It occurs when we no longer know why we work; our consultant friend comes in every day because she came in the day before.
As you can imagine, you want as much of the first three and as little of the latter three as possible; that is total motivation.
The Link Between Culture and Motivation
Explain the link between culture and motivation.
A company’s culture is what motivates—or demotivates—its people, telling them whether to do their work for the love of it or for the fear of punishment (at this point, you can guess which is more effective).
The biggest misconception about culture is that it is a collection of sentiments and perks like “honesty,” “integrity,” and in-house yoga. In fact, culture is the set of systems and processes people have to interact with as they go about their work, including favorites like mission and values, but also job design and compensation. And to inspire the highest levels performance, the entire ecosystem has to be aligned in the right direction.
Total motivation provides a scientific and actionable basis with which to create that alignment—toward the direct motives and away from the indirect ones.
As you studied companies and thousands of workers, what was most surprising?
We were most surprised by how tight the link between motives and performance was. One study of a call center found a $141 difference in revenue per hour between representatives that had positive ToMo and those with negative—that represented a 60% difference. Think about the man-hours and resources companies commit for a fraction of that lift today.
We surveyed people at global banks, 20-person start-ups, even school districts, and what the highest performers and the highest performing organizations had in common was positive total motivation. When we looked at major airlines, Southwest came out on top; retailers, Nordstrom; and among grocers, Trader Joe’s. These companies’ reputations precede them, but never before has a data-driven narrative, agnostic of role, industry or larger-than-life leaders united them all.
Compensation and Motivation
Would you share an example of a compensation system that motivates (and / or one that demotivates)?
At this stage in the conversation, you probably think compensation and offshoots like performance pay are wholly bad. Our research shows however that money is neutral; it is only damaging when it is positioned as the motivation for work instead of the acknowledgement of work well done.
Consider two compensation systems. In one, a glass manufacturer started paying employees based on the number of windshields they installed. The company also guaranteed a minimum hourly wage and provided the installers tools to let them see how their actions impacted their productivity. In the second, a bank offered employees a bonus based on the number and size of loans approved. Which, if any, do you think was successful?
Both saw between 40-50% improvement in productivity—but the bank also saw a 24% increase in bad loans and higher turnover. For the windshield installers, speed was not at odds with their ability to do their jobs well. What’s more, the new process increased play by allowing them to experiment with different ways of working. And because of the salary guarantee, there was no anxiety about their livelihood. The bank employees, on the other hand, reported uneasiness about not being able to offer small loan customers high-quality service as well as having to compromise time and values to meet high quotas.
When designing compensation systems, companies must determine how performance pay, hourly wages vs. salaries, bonuses and more will affect employees’ motives. Will it change why someone does their work every day? Our book, Primed to Perform, provides a comprehensive set of questions like, “Can customer, employee and company incentives be aligned to help leaders understand the nuances?”
Overcoming the Blame Bias
In talking about leadership, you say that it is much “easier for a leader to destroy ToMo (total motivation) than to create it.” Why is this and what should we guard against?
It is easier to destroy ToMo than to create it because of a phenomenon we call “blame bias.” When things don’t go as planned, our natural but misplaced blame bias seduces us into always pointing the finger at the individual instead of considering the context in which they acted. When a client reacts negatively to a presentation or someone joins a call late—those responsible must be incompetent; there’s no way the teleconferencing technology malfunctioned.
The first step to combating the blame bias is to acknowledge when it happens. For many of us, those initial accusatory thoughts are inevitable, but thankfully, they don’t have to be the measure of our leadership. What matters is what follows: ask and investigate what about the context could be causing the observed behavior or outcome. Considering context dramatically changes next steps. Imagine a manager of a factory trying to decrease accidents. A blame-induced solution might involve tying bonuses to number of days without an accident versus painting danger zones bright yellow to caution workers.
Leadership Behaviors that Drive Motivation
What leadership behaviors have you identified that best drive total motivation?
Like any other part of a company’s culture ecosystem, great leadership is characterized by enhancing your team members’ play, purpose and potential and minimizing their emotional pressure, economic pressure and inertia. This was a particularly interesting lesson for both of us. In our past lives, we tended to use very few of the motives — “Just be nice and come in only when people need help,” we thought. We confused being hands-off with allowing autonomy; people need degrees of freedom, but they also need guidance and support. They need leaders who will proactively increase play, purpose and potential.
Below are four examples of high ToMo leadership behaviors that balance both needs (the complete set is available in Primed to Perform). A great leader:
- Makes it clear what it means to be performing well (increasing play)
- Helps you see how your work is important and meaningful (increasing purpose)
- Provides you with more responsibility as your skills grow (increasing potential)
- Ensures you don’t waste your effort (reducing inertia)
The Causes of A Negative Culture
Are there predictable elements of negative, toxic cultures? What are the main causes of a negative culture?
Funny you say predictable. Research shows that a company’s culture tends to become more toxic the more doggedly it pursues predictability. Dashboards, more oversight, more targets, goals and standardized processes can be very tempting; these artifacts create (a false sense) of control—even great companies can be seduced by predictability. But sticking to the plan is only half of performance; there is incredible value in how well you diverge from the plan.
Our research shows that these two forces of tactical and adaptive performance are actually opposites and must be kept in balance to achieve high performance. Unfortunately, we operate in a high tactical world. In one survey, a majority of executives confessed they would sacrifice value-creating activities to meet quarterly goals.
Even when things become less predictable, companies must continue to encourage experimentation and meaningful work and resist the urge to over-engineer everything. It is their only chance of innovating their way out of stagnation.
How do you sustain a positive culture?
There’s an old adage that “what gets measured gets managed.” Measure the strength of your team’s culture, using our simple total motivation survey. You’ll be able to see where your culture is weak or strong, and generate ideas for how to improve it. Make the exercise a part of your biannual routine; culture is too important to be left to chance.
http://www.vegafactor.com/survey/
Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation