The last thing Wall Street analysts and investors are thinking about is "feelings." Too bad, because all economic activity boils down to the back-and-forth exchange of rewarding feelings. The visible economy is just a surface manifestation of the emotional exchanges percolating underneath. My “hack” is to expose this subterranean economy to the light of day and repair capitalism in the process.
Human beings, I claim, are primarily emotional creatures and secondarily rational. Feelings are central to human existence because they tell us what we need to survive and the rational mind dutifully attempts to satisfy these vital needs. A simple example of the primacy of feelings in human affairs is hunger. Hunger is the body’s way of saying, “feed me.” If I’m having a hectic day, and a major report is due, I might ignore the initial pangs of hunger and continue to work, but then the hunger signal then escalates to, “FEED ME!!.” Sooner or later my rational mind is going to obey the hunger signal and find a logical path to food. This, I propose, is the fundamental dynamic behind all feelings. They are proxies for our basic survival needs and if we ignore them we are all dead, extinct.
It bothers me when managers refer to feelings and emotions as soft and irrelevant. Extreme emotions may be disruptive and harmful, but subtle, everyday, emotional incentives provide the foundation for our survival and our economy.
If you still believe that feelings are soft and irrelevant, then why don’t we figure out a way to turn them off? This is precisely what happened to 13,000 lobotomy patients between the 1930s to the 1950s. Hospitals at this time had few options for dealing with extreme emotions, so doctors experimented with a variety of surgical procedures in a desperate attempt to them turn off. Surgeons eventually discovered that they could calm frantic patients, and quiet their violent emotions, by damaging a brain area located just behind the eyeballs. These operations succeeded in calming patients’ violent emotions, but they also turned off the subtle, everyday, normal emotions that get us out of bed in the morning, motivate us to care about our friends and family, and motivate us to work hard. By turning off emotions, surgeons did not create hyper-efficient robots. Rather, they created lazy people who were content to sit in their chairs all day staring out the window.
I have studied human motivation for 30 years. I know what the human engine looks like, how many cylinders it has and how companies can tap into it. The human engine is fueled by feelings and if we turn those feelings off, as we did with the lobotomy patients, human beings come to a screeching halt. Furthermore, there are 10 flavors of feeling that motivate us—five that regulate our biologic survival and five that regulate our social survival. We are often unaware of these regulatory feelings because they are subtle and operate on the edge of our conscious awareness. Taken as a whole, human motivation is an elegantly-designed survival system that has allowed a puny primate to thrive in every ecosystem on the planet. It is pure arrogance and hubris, therefore, to make fun of this vital mechanism that makes our very existence possible.
I recommend that we completely rethink how emotions impact business success. One helpful construct is the emotional paycheck. Companies measure monetary benefits to the nearest penny but then proceed to ignore the intrinsic rewards that are every bit as motivating to human beings as money. Companies therefore have a flawed perception of employee compensation and a flawed payroll accounting system. I’ve invented a tool that captures the emotional paycheck by measuring the five pleasures that nature built into our brains to motivate productive human behavior. This tool fixes the broken accounting system and provides executives with accurate compensation data.
I call the emotional paycheck the master metric because it drives everything happening inside a business. If companies can get their emotional paycheck to go up, then every desirable financial, operational and HR metric will go up as well. The logic behind this bold statement is simple; rewarding feelings drive behavior and behavior determines organizational success. It all boils down to how rewarded people feel in their work and money is just part of that reward.
The business logic for paying attention to emotions is simple and compelling: would you rather double your employees’ monetary salaries to get them to work harder, or would you rather create an exciting workplace that boosts the emotional paycheck? In my book, Primal Management: Unraveling the Secrets of Human Nature to Drive High Performance, I explain how to improve the emotional paycheck by triggering human nature's five productive pleasures. I show where these pleasures originate in the brain, which neurotransmitters regulate them, and how managers can tap into them to create a dynamic workplace that fires on all cylinders. If you follow my advice to the letter, you can create a workplace that is so rewarding that your employee might even pay for the opportunity to play!
Working harmoniously with human nature is not that difficult and the payback is spectacular. All we need to do is to shake free of the simplistic money-and-fear approach to employee motivation. The traditional approach is coercive and only taps into 30% of the potential energy our workforces. This more-nuanced approach and will allow us to tap into the other 70% to create a company that succeeds spectacularly by getting the people-part right. This is not just a good way to motivate human beings, it’s the best way, because it aligns harmoniously with the human engine.
Many CEOs have excellent people skills, but they forget to bring them to work. They are stuck in an old-school mindset and see themselves as task masters instead of as motivators and leaders. Here is an example of a people-play; a company that succeeded spectacularly by getting the people-part right.
A former Price Waterhouse accountant was promoted from controller to CEO at the nation's largest designer and builder of hospitals and clinics. He went from managing 20 people to managing 1,000. This CEO had superb people skills, but he wasn’t going to use them. His first instinct was to fall back on his accounting training and start harping about the numbers.
I suggested a radically different path. I told the CEO, “You are not an accountant any more. You are a leader who has to capture the hearts and minds of your employees. Why don’t you tell them, “My primary job as CEO is not to improve profits or increase cash flow. My primary job as CEO is to create an exciting and rewarding workplace that you look forward to arriving at in the morning. If I take care of you, and you take care of the customer, then the numbers will more-or-less take care of themselves.” He followed my advice and I continued to coach him for the next four years.
After four years (2004 to 2008), revenue increased by 200%, profits increased by 300%, the company went from the lowest quartile in employee engagement to the top quartile, and a company that was purchased for $50 million was sold for $250 million. One of the investors, a global private equity firm, said it was the best return on investment in their 23-year history.
Someday Wall Street will wake up and realize that optimal returns occur when enlightened leaders learn how to tap into the motivational engine that drives human achievement. This is the path to a more promising future where everybody wins: employees, managers, customers and shareholders.
The best way to test my hack is to measure the horsepower of your company's motivational engine. This can be accomplished using the reward survey built into The Horsepower SystemTM (see demo at www.horsepowermetric.com/demo.php). If the motivational horsepower is negative, it means that employees find it painful coming to work and that the motivational engine is malfunctioning. If the horsepower is in the 0 to +5 range, it means that employees get intrinsic pleasure from their work that enhances motivation and productivity. If the horsepower is in the +5 to +10 range it means that employees get so much passion and purpose from their jobs that they would come to work just for the thrill of it (assuming that they were independently wealthy, of course)!
Dear Raj,
You wanted to know what companies should invest in to improve their motivational horsepower. The answer is simple--relationships. Human beings are a social species and we function best within the context of close interpersonal relationships. Cold, impersonal workplaces are harmful to the motivational engine and hence reduce horsepower. Unfortunately, according to Gallup, only 20% of employees report having close relationships in the workplace. This is a serious problem that I address in Chapter 4 of Primal Management.
Although relationships at work are important, we have a limited allotment of them. According to a classical research paper by Dunbar, human beings can only process around 200 meaningful social relationships which is why we are so relationship-averse. If we go beyond 200 relationships, the computing power of the human brain is overwhelmed. This is why many business writers, like Top Peters, recommend subdividing large organizations into smaller groups of 200, or less, employees.
Since we spend half of our waking life at work, I think it makes sense to dedicate half of our allotment of relationships to the workplace (100 relationships). If we use a computer analogy, authentic relationships provide the "wires" that connect one employee to the next and provide conduits through which knowledge and energy can flow. A networked group of human beings, just like a group of networked computers, is much more powerful than a hodgepodge of individual workstations.
I applied this networking concept at a hospital in Wisconsin that had a morale and collaboration problem. I paired-up everybody in the organ-transplant unit and then put each pairing through a 4-step relationship-building program. The idea was to double the number of connection in the human-network every 4 months, then randomize the pairing and do it again. This intervention boiled down to mutual-mentoring; convincing the partners to invest in one another by helping each other solve problems. When we invest in someone, they become part of us (part of our identity) via the mysterious process of cathexis. The hospital project succeeded in creating a more collaborative and engaged workforce where people enjoyed coming to work.
I guess the moral of my story is, "When it comes to relationships in the workplace, quality is more important than quantity." If you'd like to learn more about this relationship-based approach, I can send you an article titled, "Relationships Matter." You can contact me at peherr@chorus.net.
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Hello Paul,
I have been working on the theory that the world has become a far more problematic place because of the growth of interactions. This growth has been gradual and has therefore proceeded to boil us like the unwary frog - the frog will definitely jump out with alacrity if introduced to boiling water! If interactions could be tamed then with the same Knowledge base we would have better discipline and teamwork and this would lead to a quantum growth in performance. I too have obtained results with my approach.
When I noted your experience in delivering quantum growth I felt there had to be a tie up between your experience and mine. However, it was not clear to me just what the management invests in to raise Horsepower. There has to be something that is needed but is missing and requires time, energy or money to get the volition and teamwork going. There is grave shortage of all three!
I presume it is something different from Freedom promoted by Bill Nobles in "Overcoming the management hierarchical control mindset—the key to re-inventing management and resolving 20 moonshots".
Regards,
Raj Kumar
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