The Big Lesson

By understanding what social scientists have learned about human motivation, entrepreneurs can understand what moves people, and why it matters for their business.


One of the questions that’s at the heart of business is this, what motivates people to do great work.And it turns out over the last 50 years a group of Social Scientists all over the world have taken a very hard‑headed, very systematic look at this question. And what they found is actually incredibly important to any leader in any organization. What they found essentially is this, there is a certain kind of reward we use in organizations. I call it an if/then reward, as if you do this then you get that. We love rewards. All right. Rewards get our attention. But they get our attention in a particular way. They get our attention in a very fixed, narrow way. They get us to zoom in. That frame of mind is extraordinarily effective when the task is algorithmic. That is when you’re following an algorithm, following a recipe. It could be with your body, turn the same screw the same way on an assembly line. It could be with your brain, add up these columns and figures.

For work that is simple, algorithmic and has a short‑time horizon if/then rewards work quite well. But the same body of research tells us if/then rewards are far less effective for work that is not algorithmic, work that requires judgment, creativity, discernment, conceptual thinking or has a longer time horizon. Why? It’s the same principle. We love rewards. They get our attention. But they get our attention in a fixed way. For creative tasks, complex tasks, you don’t want to be zoomed in too much. You want to be much more expansive. You want to have a looser, broader view. And so what 50 years of science tells us, very, very plainly, is that if/then rewards are great for simple and short‑term tasks, but not so great for complex and long‑term tasks.

And the problem that we have is that we use if/then rewards for everything. We use them as kind of a universal elixer, a universal tool that can fix any kind of motivational problem when the facts tell us something different. And what we need to learn how to do is deploy if/then rewards where they’re effective. But where they’re less effective, and that’s for more creative, complex work, the kind of work that I think defines the 20th Century, we need a different set of motivational mechanism.

So if you’re an entrepreneur trying to get the most out your workforce here are four questions you should ask yourself: One, am I paying people fairly and am I paying people well. At some level there’s an argument for taking money off the table. That what you should do is you should pay people enough so they’re not thinking about the money, they’re thinking about the work. So paying people enough to take the issue of money off the table. Two, am I providing sufficient room for autonomy and self direction in what people do, how they do it, when they do it, and who they do it with. Three, am I allowing people to make progress each day and get better at something that matters. And four, do the people inside of my company know why they are doing what they are doing not merely how to do it.
If you can answer yes to those four questions, you’re going to be in very good shape and way, way ahead of your competition.

Suggested Readings

Founders School || Leadership and Motivation || The Big Lesson || Impact Guide (PDF).

Pink, Daniel H. 2009. Drive: The Surprising Truth About What Motivates Us. New York: Riverhead Books. Chapters 1 “The Drive and Fall of Motivation 2.0”, 2 “Seven Reasons Carrots and Sticks (Often) Don’t Work”, 2A “…and the Special Circumstance When They Do”, and 3 “Type 1 and Type X”.

Amabile, Teresa M. and Steven J. Kramer. 2011. The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work. Cambridge: Harvard Business Review Press.

Nohira, Nitin, Boris Groysberg, and Linda Eling-Lee. July 2008. Employee Motivation: A Powerful New Model. Harvard Business Review.

Ariely, Dan. What’s the Value of a Big Bonus? New York Times, November 19, 2008.

Questions for You

What lessons can I draw from the science of motivation to help me understand how to be a better leader?

Do I use if/then rewards? Have they been effective?

How can I improve the motivation of those around me?

Am I paying people fairly? Am I paying people well?

Am I providing room for autonomy and self-direction?

Am I allowing people to make progress every day?

Does each of us understand why we are doing what we are doing?

Tools and exercises

Reflect on instances when you’ve been most motivated/least motivated? What factors influenced your motivation level?

Think about how you communicate to others WHY they are doing what they are doing.