In his book, Carrots and Sticks Don’t Work, Paul Marciano hits the nail on the head when he says “reward and recognition programs can be costly and inefficient, and they primarily reward employees who are already highly engaged and productive performers.  Worse still, these programs actually decrease motivation, because they make individual recognition, rather than the overall success of the team, the goal.”

Rewards offered as a prize for individual achievement fall short of programs designed to recognize, as an expression of gratitude, accomplishments achieved by the entire department or division having met the challenge of a new program or change management goal.

Here is the TED ( YouTube ) video of Daniel Pink explaining the mismatch between “what science knows and what business does”.

What is it that business “does”? Business thinks about how to get people to do things. To get people to do things, business “does” incentives. Like … sell stuff, when a trip. Pile up safety points, win a logoed jacket. Pull a lever, get some cheese. Sorry, didn’t mean to infer people are like lab mice. Just poking a little fun by exaggerating.

What Pink “does” is lay out a lawyerly case describing experiments that measure how people perform with various reward devices. The bottom line? Experiment showed that “the secret to performance is not rewards or punishment, but the unseen intrinsic drive to do work that matters”.

Question: Who defines what matters?

Answer:  The leaders … the leadership team.

A brief example. How do you “get” people to innovate? One way is … if you want to innovate, go to work at Apple. Why? Exactly – the secret is “why”. What Pink describes as motivating was that Steve Jobs saw Apple as the institution that was all about changing how people lived (how they accessed and listened to music and made technology intuitive). He defined their purpose … their “why’ that made employees pioneers.

That’s work that matters. No cheese required.

The newspaper article I was reading was continued on an inside page next to the obituaries. I don’t normally read those, although my wife does … and, aside from the old joke “to see if I am in there”, there have been several occasions where her habit resulted in our only notice of a friend’s passing.

But this obit was different – however, maybe not that different or unique to those of you who look there for yourselves daily to make sure you’re still alive!

Normally, here, I comment on great examples of leadership influence and on the power of their gratitude. To me, how people express appreciation is an attractive trait. So I was intrigued by the obit written by James V. O’ Donnell ( 1941 – 2012),  you guessed it – the deceased.  Instead of the usual “this is your life” treaties by family, he summarized his gratitude and life lessons with a series of “what I learned’s”.  Here are the cliff notes:

What I learned at home: I was inspired by my parents example.

What I learned in school: how to speak and write clearly and logically.

What I learned from selling: multiple applications of Vick’s VapoRub ( his first sales job )

What I learned in business: having fun took priority over career and income

What I learned in retirement: wearing Walmart jeans and eating in authentic Mexican restaurants ( a deliberate move from fashionable to comfortable )

What I learned from my family, including pets: love, loyalty and tolerance … and ( with his wife in retirement ), silence until dinnertime to save things to talk about

What I learned about God’s mercy: it left some things to talk about in heaven ( he lost a son to medical malpractice and a police officer daughter pursuing a kidnapper )

Learnings for the rest of us: live a life in a way that you look for the good in others and in all circumstances, even though we don’t understand it all until heaven.

Once upon a time Shirley had an OK job in an OK industry.  Shirley was a janitor in a hospital and she had worked for this same company for 15 years.  Okay, so now you may recognize the setup of the story from the book Soul of the Firm by C. William Pollard.

Pollard, now retired chairman of ServiceMaster, wrote about Shirley in the book.  In three steps, here’s how ServiceMaster thought about people and subsequently became very successful in the building maintenance marketplace.  Each step contributed to transforming Shirley’s daily tasks, for her, into something more than cleaning porcelain and polishing terrazzo.

Step 1: ServiceMaster leadership ensures that Shirley understands that she is more than an employee with brooms, mops, cleansers and bucket. They suggest that she think of herself as a part of the healing process – an extension of the doctors and nurses.

Step 2: Shirley… let’s assume she’s in her mid-30s – she’s likely to be a wife, maybe a mother.  So, her world is not limited to work.  Actually, she understands love … she got that from her parents, hopefully, as well as grandparents. So do you think this ServiceMaster purpose statement falls on deaf ears?

To honor God in all we do

To help people develop

To pursue excellence

To grow profitably

Step 3: the job has standards for quality and productivity that Shirley must accomplish. But, because Steps #1 and #2 are in place … her job is more than a task.  In other words, she wants to do a good job.

So, when an organizational leadership honors the purpose and humanity of any task first, then the metrics required are more likely to be achieved task-by-task by employees who do not leave their craving for purpose and contribution at home.  That’s the formula for success… transferable to any task!

In my post #1 on this topic I inferred that a chunk of my belief was based on the experiences and career of Roy Spence, Jr., CEO of the ad agency GSD&M in Austin Texas. Spence wrote a great book about purpose titled “It’s Not What You Sell, It’s What You Stand For”.  They have created their own Purpose Institute to help others see the power of purpose.  So, for this ad agency, does that mean that they market their clients to the marketplace via that expression “what you stand for”?   Yes, that’s what they do.

Let’s consider the example of one of their clients, Southwest Airlines.  What do they market? Okay class, would you say that your marketing message might be that Southwest Airlines is the low-cost, on time, no-frills, hassle-free baggage-loving airline?  Have you seen the commercial where the message is “we love bags”? That’s what Southwest Airlines stands for.

So back to the loyalty-is-dead paradigm of this decade:  If you “stand” for something, besides top and bottom line, people … employees and customers … are attracted to the humanity of that.  Some label that culture … or community.  We belong to a community dedicated to a cause that appeals to our desire for contribution, affiliation and meaning … not just making money.  Although when we get the humanity part right, why are we surprised when the strategy part works?

Hmmm … maybe you’re onto something.   If you “belong” to something that you believe in and attracted you to apply, why would you leave?

So, at Texas Orthopedic Hospital at 6:00 am, you wouldn’t expect a Ritz-Carlton “moment of truth” greeting … but it was pretty close.  I noticed that they were ready, the bed was ready, the charts were prepared, the nurses and both members of the anesthesiologists team were present and of good humor ( powerfully comforting when the customer is to undergrowth undergo three hours of surgery ).  They repeatedly asked the same questions – even “is it okay for medical intern to observe?”  I got a pager that buzzed me when the procedure was finished when it was time to talk to the doctor.

For a while I sat in the main lobby and everyone that worked there, it seemed, were “on duty” to greet even if it wasn’t “their job”.  I watched a maintenance engineer direct people to their destination …  and it was clearly not an interruption.

How do they coach this I wondered? I looked for visible evidence that might shed some light on the seemingly well-intentioned colony of servants who seem dedicated to healing.  I noticed one clue while there and that was the framed photographs of people with names grouped by department, like radiology and food service.   To me, the visual was both an acknowledgement of a version of tribal “belonging” and placed a human face as those who have a responsibility.  One other possible intention on the part of the hospital leadership … “these are our front line soldiers that win our daily battles”.  The flat screen at the entrance to the cafeteria for employees and visitors not only displayed the week’s menus, but also the names of those responsible for the preparation and delivery to rooms.  Interesting that the names displayed in the areas of measured results …  linked those results to all members.

The other clue just came to me later as I was writing this. Orthopedics is work that is very visible. Bone, tendon and joint repairs are highly apparent.  People following surgery usually have significant bandages and even casts. Have you ever seen someone who wears one of those steel cages on their leg … for bone realignment? Making tasks and those responsible … maybe there’s a clue for all organizational leaders about elevating the context of work.

A couple of transferable lessons came from this experience.  In your company look for ways to make your tasks more evident (think Hall of Fame displays – see next post).  And give equal credit to your supporting cast.  While the doctor did the surgery on my wife, he was one of about 12 or more people that attended to her throughout the entire pre and post-surgery interactions.

In our initial post on this topic I signaled that we should shift our understanding of loyalty – in the context of employee loyalty. The financial incentive for employers is that turnover is expensive. What’s the rule of thumb? To replace an employee cost 1.5-3X their annual compensation? So let’s say, the subject annual tab is $70,000 – then a replacement will cost $105,000 to 210,000? And what’s the annual tab if your turnover is 15%-20%?  What would it cost to pay little attention to a new loyalty model? Me thinks a lot less.

Most principal–led organizations have made a significant investment and commitment in formulating their core ideologies – their mission, values, vision … purpose ( MVVP ).  What does Southwest Airlines value? Fun!  So here’s one clue for enhanced loyalty that is not calendar driven.  First ( think now of one of your own MVVP’s ), hire those who embrace fun. Then make work fun – even let your flight attendants crack jokes during the pre-flight safety instructions.

There. Now you will have (more ) loyal employees.  People at Southwest are not coming to work to make uncle Herb rich. No one (okay, maybe some) goes to work there to count the months and years!  Hmmm …  do you think? Stay tuned! I’ll get to the ad agency story that I mentioned last time – just not as soon as I thought.

Maybe if you are in that Fast Company crowd you fall into that category of those who describe a future where the top three constants are change, change and change. “Get ready, young professional, for 5-8 career changes … not just job changes. “, we hear.  I figured that I’m the centerpiece for that trend. As a Boomer, my longest stint with one company was 22 years, although I worked for six companies in my 30 year career prior to starting this business 15 years ago.  My dad worked for one company for 34 years. So, true, the trend is shorter stints today.  And does that translate into reduced loyalty? Not necessarily, oh–prognosticator– of–old-paradigms!

My view: the world is changing but people have not. Take the subject of loyalty:  Maybe people in our knowledge economy, where thinking, not doing, is valued, are just not loyal to the calendar.  Actually, that’s pretty profound … for me anyway.  I think it is important for employers in any human enterprise to understand that thinkers are likely (more) loyal to meaning, purpose … and contribution to a cause.  Hmmmm.

Stay tuned… my next post will uncover how an ad agency “gets it”!

Queen's Award for Enterprise

What if a nation desires to honor business achievement in a way that that is of the highest importance and an appropriate tribute from the Crown?

Great Britain has such a program to honor outstanding UK companies and individuals.  The Queen’s Award for Enterprise is an honor which recognizes outstanding UK companies and encourages the development of British business.  The Awards are bestowed to businesses in three categories: international trade, innovation and sustainable development; the individual recognition is a tribute to those who make outstanding contributions to enterprise culture in the UK.  Winners are announced each month on the Queen’s birthday, this month on the 21^st, and receive a range of benefits including worldwide recognition and extensive press coverage. The Queen also invites winners to a reception at Buckingham Palace.

And the award itself?  A striking highly-crafted medallion with a relief image of Her Majesty.  The imagery and medallion symbolism has an inherent heritage throughout history with historical precedents.  Even the artistry and engraving requires craftsmanship that is evident when the piece is presented … usually for an achievement that, regardless of the enterprise, required an act of inspiration and creativity.  And although a significant memento of the recipient’s works, the more valued memory will be the presentation and reception in the company of peers, friends and loved ones.  In this case, then, the tribute has the right emphasis … honor above prize.