Return On Investment (ROI is always important), however, there are additional ways to improve ROI and the long term growth of your business

Gary C. Cunningham
http://bettersignupnow.ourtoolbar.com

There is a serious mismatch between social engineering psychology and the way business is conducted in the real world. Recently, in discussion topics we discussed two methods of associative learning, training, for employees and customers. One is the classical Pavlovian model, and the other is operant conditioning, made possible by the work of B.F. Skinner, et al. In both of these methods, some form of stimulus is used to guide desired natural behaviors to reach a specific outcome. When this is applied to the world of business, it usually takes the form of carrots and sticks through the common medium of business exchange; i.e., money. You work a certain number of hours, sell a certain number of products, or provide a specific service and are paid a certain amount of money. This positive reinforcement method has been the basic business model for much of the industrial and post WW2 decades. A few days before dying of leukemia, B.F.Skinner (1990) stood before the American Psychological Association for his last critique of “cognitive science”. He died resisting the idea that cognitive processes have a necessary place in the science of psychology and in our understanding of the laws of conditioning (Myers, 2008).
A new breed of psychologist have entered the field in the last few years, developing more tests and evidence that cognition not only plays a significant role in conditioning, but also suggests once again that humans are unlike other sentient beings. This takes the form that once basic needs are met, intrinsic and extrinsic motivators become a very large part of cognitive decision making (Boggiano & others, 1987). When this thinking was extrapolated to the business world, some very surprising outcomes developed in employer-employee production ratios.
The findings through the Chicago School of Business, the London School of Economics, MIT, and Carnegie Mellon School of Business defy the laws of behavioral physics. These results are a new paradigm for the world-wide business model. What the scientists found was the behavioral model was in fact a very narrow foci, in the field of human motivation. Yes the old traditional methods of starting pay plus incentives, plus a 40 hour or less work week, flex time, Friday dress day, and other carrots worked well for the basic employee. But when applied to the upper levels of management, the partner level, the developmental level; the return on investment dropped off sharply, regardless of the amount of incentive. In other words, there was a plateau, or a glass ceiling, if you will, that became very difficult to penetrate. It seemed that no amount of incentive, cajoling, or work environment enhancements would result in increased production or technical product output. This amounted to functional fixedness; now enter the Candle Problem.
In a classic experiment demonstrating functional fixedness, Duncker (1945) gave participants a candle, a box of thumbtacks, and a book of matches, and asked them to attach the candle to the wall so that it did not drip onto the table below. Duncker found that participants tried to attach the candle directly to the wall with the tacks, or to glue it to the wall by melting it. Very few of them thought of emptying the box of tacks and using the inside of the box as a candle-holder, tacking this to the wall. In Duncker’s terms the participants were “fixated” on the box’s normal function of holding thumbtacks and could not re-conceptualize it in a manner that allowed them to solve the problem. What does this have to do with psychology and business? Well, when students at MIT were given the problem and a reward schedule, those at the bottom of the scale outperformed those fixated on the higher rewards possible. Then when the experiment was repeated, this time with the box of tacks emptied onto the table, the percentage of successful students shot off of the chart (D.Ariely, 2005). The conclusions drawn were that at a certain point (1) the reward scale becomes the object of fixation (2) If the successful requirements are purely mechanical (everything laid out, no thinking required; i.e. Henry Ford) then to incentivize is a proper technique. But when it comes to right-brained projects, the incentive actually gets in the way (Dan Pink, 2009). The solution is not to entice employees with a sweeter carrot or threaten them with a sharper stick. In this day and age of economic collapse, tightening budgets, and employee layoffs – right brained thinking-out-of-the-box is required. This requires thinking intrinsically rather than extrinsically. It is necessary to consider (1) Autonomy (2) Mastery (3) Purpose.
Autonomy: The ability to direct our own lives
Mastery: The desire to get better at something that matters.
Purpose: The yearning to do something that we do in the service of something larger than ourselves.
The traditional notions of management are great, if all you want is compliance. If you want engagement, self direction works better. Certainly, you have to pay people fairly and adequately. This gets the issue of money off of the table. Companies like Atlassian, Google, and others have ventured into ROWE (Results Only Work Environment) where there are no fixed schedules and meetings are optional. Worker productivity goes up, job satisfaction goes up, and turnover goes down. A company called Microsoft started an online encyclopedia (Encarta), with all of the technical expertise you could pay for; it was run into the ditch by a company called Wickipedia, where everyone worked when they wanted to, worked for free, and worked for the pure satisfaction of doing it. Other examples are Apache Servers and Linux operating systems. In conclusion, Autonomy, Mastery, and Purpose as intrinsic motivators outperform carrots and sticks in today’s world. If we adopt the psychological principles given to us by science, we can solve a lot of candle problems. ~

Gary C. Cunningham
http://bettersignupnow.ourtoolbar.com

References
Myers, D.G. (2008). Exploring Psychology in Modules (7th Ed.) Worth Publishers: New York, N.Y.
Boggiano & others, 1987 U.S. National Library of Medicine Retrieved online from
http://www.ncbi.nlm.nih.gov/pubmed/3681655
Ariely, D., and others 2005 The Federal Reserve Bank of Boston working Paper 05-11 2005
Pink, Dan 2009 TED – Ideas Worth Spreading Recovered online from
http://www.ted.com/talks/dan_pink_on_motivation.html

More and more people these days are technology tinkerers. They’re messing around, trying new things, jumping from small project to small project, but never settling on and committing to one thing. It’s certainly easier and easier to tinker, which is great; it makes building stuff more accessible and less expensive. And that can lead to new innovations, ideas and startups. But beware of too much tinkering.
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