Wouldn't it be great if human beings were born with a "users guide?" Then we would know the best way to lead, motivate and engage our employees. My hack attempts to deduce what the missing “user guide” looks like using engineering logic and the latest science.
The range of effective management strategies for the 21st century is constrained by human nature; a fixed feature on the management landscape that isn’t going to change anytime soon. Since we are stuck with this technology, it’s high time that we figure out how it works so we can design our organizations synergistically around human nature rather than brutally on top of it.
The task of 21st Century management would be much easier if human beings came equipped with a user guide. My hack attempts to deduce what the missing “user guide” looks like using engineering logic and the latest science. My goal is not to create just another theory, but to understand the timeless essence of nature’s motivational design and the emotional “physics” that makes us go. I will then introduce a novel management tool based on the theory to help 21st century managers tap into the latent potential and creativity of their workforces.
I dedicate my hack to courageous and principled leaders everywhere who instinctively align their organizations with human nature; people like Ken Iverson at Nucor Steel, Ricardo Semler at Semco, Dennis Bakke at AES Corporation, and Harry Quadracci at Quad Graphics.
The Fallout from Failing Human Nature 101
Modern corporations are emotionally dyslexic and earns failing grades in human-nature 101.
The default solution to employee motivation practiced by corporations everywhere consists of a simplistic combination of money-and-fear: 1) do it because I pay you, and 2) if you don’t do it you are fired. This simplistic, Neanderthal-approach to motivation has created a dysfunctional workplace where only 30% of employees care about their work[i]. Gallup’s economists estimate that this failure-to-engage translates into $300 billion yearly in lost productivity and over $1 trillion if indirect costs are included.[ii] This does not include the cost of replacing the millions of disengaged employees who jump ship annually because their emotional needs are not being met.
Another symptom of motivational dysfunction is the fact that half of us will suffer from some form of mental illness during our lifetimes[iii], and millions will turn to psychoactive drugs to obtain emotional rewards artificially that they should have gotten naturally from their work. The costs of these crippling social problems are upward of $300 billion annually[iv]. We can bump this number to a staggering $800 billion if we include the costs of untreated addictions and mental illnesses.[v]
Bottom line: Our society is emotionally out-of-whack, and desperately needs a more sophisticated and nuanced understanding of human nature. Modern management, I will argue, requires an overhaul as opposed to a tweak. We need to start over because we have based our management theories on the false assumption that human beings are primarily rational creatures. The truth is, we are primarily emotional creatures who use our rationality to satisfy our deep emotional needs.
At this point you may be wondering, “How could we have gotten it so wrong.” How could the least important thing, “emotions,” all of a sudden become the most important thing?
The centrality of emotions has been overlooked because nature designed them to operate stealthy on the edge of conscious awareness most of the time. In emergency situations, however, emotions rise up and make their presence known in the form of ballistic emotions like anger, fear, jealousy and rage. These are the obvious, defensive-emotions that we don’t want in the workplace. These are the emotions that give the word “emotion” a bad name. The ballistic emotions are just the tip of the proverbial iceberg, however. There is a much more happening beneath the waterline that the scientific community is just beginning to fathom.
My hack is not about the ballistic emotions, but about the subtle, everyday, productive emotions that get us up in the morning, move us from point A to point B during the day, and put us to bed at night. This is the part of the iceberg we are interested in because this is where the motivational engine lies—the positive feelings that drive high-performing organizations.
By the way, not everybody got emotions wrong. Maslow was on the right track with his “hierarchy of needs” idea (although I don’t think human needs are hierarchical). What Maslow calls “needs,” I will refer to as “biologic and social appetites.” The positive psychologists, like Martin Seligman and Mihaly Csikszentmihalyi, are on the right track as well. Freud got important parts of the emotional mechanism right, but other parts spectacularly wrong (like everything is driven by psychosexual motives). Dan Goleman’s writings on emotional intelligence and Lawrence and Nohria’s book, Driven: How Human Nature Affects our Choices,” are important contributions as well.
[i] Steve Crabtree, “Exacerbating the Fear of Layoffs,” Gallup Management Journal, October, 2010, p 1.
[ii] Jerry Krueger and Emily Killham, “At Work, Feeling Good Matters,” Gallup Management Journal, December, 2005, p 2.
[iii] Ronald C. Kessler; Wai Tat Chiu; Olga Demler; Ellen E. Walters Prevalence, Severity, and Comorbidity of 12-Month DSM-IV Disorders in the National Comorbidity Survey Replication Arch Gen Psychiatry, Jun 2005; 62: 617 - 627.
[iv] National Institutes of mental health, 2002 statistical data, Source: NIMH website at the following URL, http://www.nimh.nih.gov/statistics/4COST_TOTAN.shtml
[v] Kathleen Kingsbury, Tallying Mental Illness' Costs, Source: Time website, Friday, May 9, 2008, URL: http://www.time.com/time/health/article/0,8599,1738804,00.html
It’s Time to Reverse Engineer Human Nature
I began thinking about human nature from the perspective of an engineer 30 years ago. I had always been impressed by the designs found in nature, like the corrugated shell of a mollusk that provides high strength and stiffness with minimal material. Nature’s designs are “rational” and make engineering sense.
The human body is also elegantly designed. The human hand, for example, obeys the laws of mechanics and human engineers have yet to duplicate its dexterity and precision. The human eye obeys the laws of optics, and human engineers have thus far failed to create machine vision that can duplicate what the human eye can do. The human heart obeys the laws of fluid mechanics and human engineers have failed miserably to create a reliable and safe artificial heart. What about human emotions, shouldn’t this system be just as elegantly designed as the rest of us?
I felt certain that it was, so I set out to prove it. My goal was to reverse engineer what nature had in mind when it incorporated emotions into human nature. If you’d like to see my vision of the human engine, please click on the following link. Click Here to View Part 2 of my Solution
Note: The MIX has given me permission to split my solution into two parts for copyright reasons. After you read Part 2 of my solution, please come back to the MIX and finish reading the "practical impact," "challenges," and "first steps" sections of my hack.
CASE STUDY: THIS HACK IN ACTION
Since most companies do a crummy job of motivating their employees, large financial gains are possible with relatively little effort.
The motivational engine is not complicated once we understand its basic architecture. Managers just need to get a few things right to see significant benefits. These basics are simple in concept but rather challenging in practice because managers need to unlearn some bad habits and commit more effort and attention to their employees. Here is a short case study that illustrates the natural-management approach in action.
Challenge—Weak Leadership and Interpersonal Conflict: The largest designer and builder of hospitals and clinics in the US, Marshall Erdman and Associates, began to struggle soon after the founder’s death due to inconsistent leadership and interpersonal conflict. The board convinced family members to sell controlling interest to an investor group and to promote Scott Ransom, a former Price Waterhouse accountant, into the CEO position.
Application of the Horsepower System: Paul Herr, the author of Primal Management and inventor of The Horsepower SystemTM, coached Scott Ransom throughout his tenure and got him started in the right direction. Ransom had superb people skills, but he wasn’t planning to use them. His first instinct was to fall back on his Price-Waterhouse training and start hammering people about the numbers.
Herr suggested a different strategy. He told the CEO, “You are not an accountant anymore. You are a leader who needs to capture the hearts and minds of your employees. Why don’t you tell them something like this; ‘My primary job as CEO is not to improve profits or increase market share. My primary job as CEO is to create a workplace that is so exciting and rewarding that you look forward to coming to work. In other words, if I take care of you, and you take care of the customer, then the numbers will more-or-less take care of themselves.’”
Results, Benefits and Savings: Ransom followed Herr’s advice and used his people skills and Herr’s approach to achieve a spectacular financial success. After four years of coaching (2004 to 2008), revenue increased by 200%, profits increased by 300%, employee engagement went from the bottom quartile to the top quartile, and a company that was purchased for $25 million in 2004 was sold for $250 million in 2008. The improved performance resulted in generous bonuses, 15 percent annual retirement funding, and a sparkling new headquarters complete with an employee health club and Internet cafe´.
One of the investors, a global private equity firm, said it was one of the best returns on investment in its 23-year history and Ransom was featured in the company’s annual report. Scott Ransom credits Herr’s methods and ideas as an important factor in the turnaround. Additional case studies are provided in the "materials" section of this hack.
This brief case study illustrates the win-win outcome that can occur when enlightened management is combined with a deep understanding of the human engine. I am in the process of creating a turn-around service based upon this approach. This service will specialize in creating people-plays: companies that succeed spectacularly by getting the people part right. If I can hit home-runs every time out of the box, then perhaps Wall Street will sit up and take notice of the financial benefits that accrue to companies that align business behavior with human nature.
- An advanced theory of human motivation based on the latest science,
- An intrinsic-reward survey based on the theory to monitor the state-of-repair of the human engine, and
- A leadership methodology to get the motivational horsepower to go up.
- Dr. Antonio Damasio (world-renowned neuroscientist who's concept of "social homeostasis" resonates with the social appetite theory described in my hack),
- Dr. William Frederick (father of American business ethics, anthropologist, natural-management theorist and friend),
- Dr. Gary Hamel (author and management thought-leader who thinks it's time to flip dispassionate management upside down),
- Dr. Nitin Nohria and Dr. Paul Lawrence (Lawrence is a business professor at Harvard and Nohria is Dean of the Harvard Business School. They co-authored Driven, How Human Nature Affects our Choices. Lawrence and Nohria's "drives" are similar to my "social appetites.").