
English: 
 Our motivations 
 are unbelievably interesting. 
 I've been working on this 
 for a few years 
 and I find the topic still 
 amazingly engaging and interesting, 
 so I want to tell you about that. 
 The science is really surprising. 
 It's a little bit freaky! 
 We are not as endlessly manipulable 
 and as predictable 
 as you would think. 
 There's a whole set 
 of unbelievably interesting studies.
 I want to give you two 
 that call into question this idea 
 that if you reward something, you 
 get more of the behavior you want 
 and if you punish something 
 you get less of it. 
 Let's go from London to the mean 
 streets of Cambridge, Massachusetts, 
 in the northeast 
 of the United States, 
 and talk about a study at MIT - 
 Massachusetts Institute 
 of Technology. 

English: 
 Our motivations 
 are unbelievably interesting. 
 I've been working on this 
 for a few years 
 and I find the topic still 
 amazingly engaging and interesting, 
 so I want to tell you about that. 
 The science is really surprising. 
 It's a little bit freaky! 
 We are not as endlessly manipulable 
 and as predictable 
 as you would think. 
 There's a whole set 
 of unbelievably interesting studies.
 I want to give you two 
 that call into question this idea 
 that if you reward something, you 
 get more of the behaviour you want 
 and if you punish something 
 you get less of it. 
 Let's go from London to the mean 
 streets of Cambridge, Massachusetts, 
 in the northeast 
 of the United States, 
 and talk about a study at MIT - 
 Massachusetts Institute 
 of Technology. 

English: 
 They took a whole group of students 
 and gave them a set of challenges. 
 Things like... 
 ..They gave them these challenges 
 and, to incentivise performance, 
 they gave them 
 three levels of reward. 
 If you did pretty well, 
 you got a small monetary reward. 
 If you did medium well, 
 you got a medium monetary reward. 
 If you were 
 one of the top performers, 
 you got a large cash prize. 
 We've seen this movie before. 
 This is a typical motivation scheme 
 within organisations. 
 We reward the very top performers. 
 We ignore the low performers. 
 Folks in the middle, 
 OK, you get a little bit. 
 So what happens? They do the test. 
 They have these incentives. 
 Here's what they found out. 
 As long as the task involved 
 only mechanical skill, 
 bonuses worked 
 as they would be expected. 
 The higher the pay, the better 
 the performance. That makes sense. 

English: 
 They took a whole group of students 
 and gave them a set of challenges. 
 Things like... 
 ..They gave them these challenges 
 and, to incentivise performance, 
 they gave them 
 three levels of reward. 
 If you did pretty well, 
 you got a small monetary reward. 
 If you did medium well, 
 you got a medium monetary reward. 
 If you were 
 one of the top performers, 
 you got a large cash prize. 
 We've seen this movie before. 
 This is a typical motivation scheme 
 within organizations. 
 We reward the very top performers. 
 We ignore the low performers. 
 Folks in the middle, 
 OK, you get a little bit. 
 So what happens? They do the test. 
 They have these incentives. 
 Here's what they found out. 
 As long as the task involved 
 only mechanical skill, 
 bonuses worked 
 as they would be expected. 
 The higher the pay, the better 
 the performance. That makes sense. 

English: 
 But here's what happened. 
 Once the task called for 
 even rudimentary cognitive skill, 
 a larger reward 
 led to poorer performance. 
 This is strange. 
 How can that possibly be? 
 What's interesting is that these 
 folks who did this are economists, 
 two at MIT, one at University 
 of Chicago, one at Carnegie Mellon, 
 the top tier 
 of the economics profession. 
 They're reaching this conclusion 
 that seems contrary 
 to what a lot of us learned 
 in economics - 
 the higher the reward, 
 the better the performance. 
 They're saying that once you get 
 above rudimentary cognitive skill, 
 it's the other way around. 
 The idea that these rewards 
 don't work that way 
 seems vaguely left-wing 
 and socialist, doesn't it? 
 It's a weird socialist conspiracy. 
 For those of you 
 who have those conspiracy theories, 
 I want to point out the notoriously 
 left-wing socialist group 

English: 
 But here's what happened. 
 Once the task called for 
 even rudimentary cognitive skill, 
 a larger reward 
 led to poorer performance. 
 This is strange. 
 How can that possibly be? 
 What's interesting is that these 
 folks who did this are economists, 
 two at MIT, one at University 
 of Chicago, one at Carnegie Mellon, 
 the top tier 
 of the economics profession. 
 They're reaching this conclusion 
 that seems contrary 
 to what a lot of us learned 
 in economics - 
 the higher the reward, 
 the better the performance. 
 They're saying that once you get 
 above rudimentary cognitive skill, 
 it's the other way around. 
 The idea that these rewards 
 don't work that way 
 seems vaguely left-wing 
 and socialist, doesn't it? 
 It's a weird socialist conspiracy. 
 For those of you 
 who have those conspiracy theories, 
 I want to point out the notoriously 
 left-wing socialist group 

English: 
 that financed the research - 
 the Federal Reserve Bank. 
 This is the mainstream of the 
 mainstream coming to a conclusion 
 that seems to defy 
 the laws of behavioral physics. 
 This is strange, so what do they do? 
 They say, "This is freaky. 
 Let's test it somewhere else. 
 "Maybe that $50, $60 prize 
 "isn't sufficiently motivating 
 for an MIT student! 
 "Let's go to a place where $50 
 is more significant, relatively. 
 "We're going to go to Madurai, 
 rural India, 
 "where $50, $60 is actually 
 a significant sum of money." 
 They replicated the experiment 
 in India, roughly as follows. 
 Small rewards - 
 the equivalent of two weeks' salary.
 I mean, sorry, low performance - 
 two weeks' salary. 
 Medium performance - 
 a month's salary. 
 High performance - 
 two months' salary. 
 Those are real good incentives. 
 You'll get a different result here. 
 What happened was that 
 the people offered the medium reward

English: 
 that financed the research - 
 the Federal Reserve Bank. 
 This is the mainstream of the 
 mainstream coming to a conclusion 
 that seems to defy 
 the laws of behavioural physics. 
 This is strange, so what do they do? 
 They say, "This is freaky. 
 Let's test it somewhere else. 
 "Maybe that $50, $60 prize 
 "isn't sufficiently motivating 
 for an MIT student! 
 "Let's go to a place where $50 
 is more significant, relatively. 
 "We're going to go to Madurai, 
 rural India, 
 "where $50, $60 is actually 
 a significant sum of money." 
 They replicated the experiment 
 in India, roughly as follows. 
 Small rewards - 
 the equivalent of two weeks' salary.
 I mean, sorry, low performance - 
 two weeks' salary. 
 Medium performance - 
 a month's salary. 
 High performance - 
 two months' salary. 
 Those are real good incentives. 
 You'll get a different result here. 
 What happened was that 
 the people offered the medium reward

English: 
 did no better than the people 
 offered the small reward. 
 This time around, the people offered 
 the top reward did worst of all. 
 Higher incentives led 
 to worse performance. 
 What's interesting is 
 that it isn't that anomalous. 
 This has been replicated over 
 and over again by psychologists, 
 by sociologists and by economists - 
 over and over and over again. 
 For simple, straightforward tasks, 
 "if you do this, then you get that", 
 they're great! 
 For tasks that are algorithmic, 
 a set of rules you have to follow 
 and get a right answer, 
 "if then" rewards, 
 carrot and stick, outstanding! 
 But when a task gets 
 more complicated, 
 when it requires conceptual, 
 creative thinking, 
 those kinds of motivators 
 demonstrably don't work. 
 Fact - money is a motivator at work, 
 but in a slightly strange way. 
 If you don't pay people enough, 
 they won't be motivated. 
 There's another paradox here. 
 The best use of money as a motivator

English: 
 did no better than the people 
 offered the small reward. 
 This time around, the people offered 
 the top reward did worst of all. 
 Higher incentives led 
 to worse performance. 
 What's interesting is 
 that it isn't that anomalous. 
 This has been replicated over 
 and over again by psychologists, 
 by sociologists and by economists - 
 over and over and over again. 
 For simple, straightforward tasks, 
 "if you do this, then you get that", 
 they're great! 
 For tasks that are algorithmic, 
 a set of rules you have to follow 
 and get a right answer, 
 "if then" rewards, 
 carrot and stick, outstanding! 
 But when a task gets 
 more complicated, 
 when it requires conceptual, 
 creative thinking, 
 those kinds of motivators 
 demonstrably don't work. 
 Fact - money is a motivator at work, 
 but in a slightly strange way. 
 If you don't pay people enough, 
 they won't be motivated. 
 There's another paradox here. 
 The best use of money as a motivator

English: 
 is to pay people enough to take 
 the issue of money off the table, 
 so they're not thinking about money, 
 they're thinking about the work. 
 Once you do that, there are three 
 factors that the science shows 
 lead to better performance, not 
 to mention personal satisfaction - 
 autonomy, mastery and purpose. 
 Autonomy is our desire to be 
 self-directed, direct our own lives. 
 In many ways, traditional notions 
 of management run foul of that. 
 Management is great 
 if you want compliance. 
 If you want engagement, which is 
 what we want in the workforce today,
 as people are doing 
 more sophisticated things, 
 self-direction is better. 
 Let me give you some examples 
 of almost radical forms 
 of self-direction in the workplace 
 that lead to good results. 
 Let's start with Atlassian, 
 an Australian software company. 
 They do something really cool. 
 Once a quarter on a Thursday, 
 they say to their developers, 
 "For the next 24 hours, 
 you can work on anything you want, 
 "the way you want, 
 with whomever you want. 

English: 
 is to pay people enough to take 
 the issue of money off the table, 
 so they're not thinking about money, 
 they're thinking about the work. 
 Once you do that, there are three 
 factors that the science shows 
 lead to better performance, not 
 to mention personal satisfaction - 
 autonomy, mastery and purpose. 
 Autonomy is our desire to be 
 self-directed, direct our own lives. 
 In many ways, traditional notions 
 of management run foul of that. 
 Management is great 
 if you want compliance. 
 If you want engagement, which is 
 what we want in the workforce today,
 as people are doing 
 more sophisticated things, 
 self-direction is better. 
 Let me give you some examples 
 of almost radical forms 
 of self-direction in the workplace 
 that lead to good results. 
 Let's start with Atlassian, 
 an Australian software company. 
 They do something really cool. 
 Once a quarter on a Thursday, 
 they say to their developers, 
 "For the next 24 hours, 
 you can work on anything you want, 
 "the way you want, 
 with whomever you want. 

English: 
 "All we ask is that you show 
 the results to the company 
 "in this fun meeting - 
 not a star chamber session, 
 "but with beer and cake and fun 
 and things like that." 
 It turns out that that one day 
 of pure, undiluted autonomy 
 has led to a whole array of fixes 
 for existing software, 
 a whole array of ideas 
 for new products 
 that otherwise would never emerge - 
 one day. 
 This is not the sort of thing 
 that I would have done 
 before I knew this research. 
 I would have said, 
 "You want people to be innovative? 
 "Give them a frickin' 
 innovation bonus. 
 "If you do something cool, 
 I'll give you $2,500." 
 They're saying, "You probably want 
 to do something interesting. 
 "Let me get out of your way." 
 One day of autonomy produces things 
 that had never emerged. 
 Let's talk about mastery - 
 our urge to get better at stuff. 
 We like to get better at stuff. 
 This is why people play musical 
 instruments on the weekend. 
 These people are acting in ways 
 that seem irrational economically. 
 They play musical instruments? Why? 

English: 
 "All we ask is that you show 
 the results to the company 
 "in this fun meeting - 
 not a star chamber session, 
 "but with beer and cake and fun 
 and things like that." 
 It turns out that that one day 
 of pure, undiluted autonomy 
 has led to a whole array of fixes 
 for existing software, 
 a whole array of ideas 
 for new products 
 that otherwise would never emerge - 
 one day. 
 This is not the sort of thing 
 that I would have done 
 before I knew this research. 
 I would have said, 
 "You want people to be innovative? 
 "Give them a frickin' 
 innovation bonus. 
 "If you do something cool, 
 I'll give you $2,500." 
 They're saying, "You probably want 
 to do something interesting. 
 "Let me get out of your way." 
 One day of autonomy produces things 
 that had never emerged. 
 Let's talk about mastery - 
 our urge to get better at stuff. 
 We like to get better at stuff. 
 This is why people play musical 
 instruments on the weekend. 
 These people are acting in ways 
 that seem irrational economically. 
 They play musical instruments? Why? 

English: 
 It's not going to get them a mate 
 or make them any money. 
 Cos it's fun. Cos you get better 
 at it and that's satisfying. 
 I imagine that if I went 
 to my first economics professor, 
 a woman named Mary Alice Shulman, 
 and I went to her in 1983 and said, 
 "Professor Shulman, 
 can I talk to you after class? 
 "I got this idea for a business 
 model and I want to run it past you.
 "Here's how it would work. 
 "You get a bunch of people around 
 the world who do highly skilled work
 "but they're willing to do it 
 for free 
 "and volunteer their time - 20, 
 sometimes 30 hours a week." 
 She's looking somewhat 
 sceptically there. 
 "But I'm not done! 
 "Then what they create, they give 
 it away rather than sell it. 
 "It's gonna be huge!" 
 (LAUGHTER) 
 She would have thought I was insane.
 It seems to fly in the face of 
 so many things, but you have Linux 

English: 
 It's not going to get them a mate 
 or make them any money. 
 Cos it's fun. Cos you get better 
 at it and that's satisfying. 
 I imagine that if I went 
 to my first economics professor, 
 a woman named Mary Alice Shulman, 
 and I went to her in 1983 and said, 
 "Professor Shulman, 
 can I talk to you after class? 
 "I got this idea for a business 
 model and I want to run it past you.
 "Here's how it would work. 
 "You get a bunch of people around 
 the world who do highly skilled work
 "but they're willing to do it 
 for free 
 "and volunteer their time - 20, 
 sometimes 30 hours a week." 
 She's looking somewhat 
 skeptically there. 
 "But I'm not done! 
 "Then what they create, they give 
 it away rather than sell it. 
 "It's gonna be huge!" 
 (LAUGHTER) 
 She would have thought I was insane.
 It seems to fly in the face of 
 so many things, but you have Linux 

English: 
 powering one out of four corporate 
 servers in Fortune 500 companies, 
 Apache powering more than the 
 majority of web servers, Wikipedia. 
 What's going on? 
 Why are people doing this? 
 Many are technically sophisticated, 
 highly skilled people who have jobs.
 OK? They have jobs! 
 They're working at jobs for pay, 
 doing sophisticated 
 technological work. 
 And yet, during their limited 
 discretionary time, 
 they do equally, if not more, 
 technically sophisticated work, 
 not for their employer, 
 but for someone else for free. 
 That's a strange economic behavior. 
 Economists have looked into it. 
 "Why are you doing this?" 
 It's overwhelmingly clear - 
 challenge and mastery, along with 
 making a contribution, that's it. 
 What you see more and more 
 is the rise of the "purpose motive".
 More and more organizations want 
 some kind of transcendent purpose. 
 Partly because it makes 
 coming to work better, 
 partly because that's the way 
 to get better talent. 

English: 
 powering one out of four corporate 
 servers in Fortune 500 companies, 
 Apache powering more than the 
 majority of web servers, Wikipedia. 
 What's going on? 
 Why are people doing this? 
 Many are technically sophisticated, 
 highly skilled people who have jobs.
 OK? They have jobs! 
 They're working at jobs for pay, 
 doing sophisticated 
 technological work. 
 And yet, during their limited 
 discretionary time, 
 they do equally, if not more, 
 technically sophisticated work, 
 not for their employer, 
 but for someone else for free. 
 That's a strange economic behaviour.
 Economists have looked into it. 
 "Why are you doing this?" 
 It's overwhelmingly clear - 
 challenge and mastery, along with 
 making a contribution, that's it. 
 What you see more and more 
 is the rise of the "purpose motive".
 More and more organisations want 
 some kind of transcendent purpose. 
 Partly because it makes 
 coming to work better, 
 partly because that's the way 
 to get better talent. 

English: 
 What we're seeing now 
 is when the profit motive becomes 
 unmoored from the purpose motive, 
 bad things happen. 
 Ethically sometimes, but also 
 bad things, like "not good stuff"! 
 Like crappy products. 
 Like lame services. 
 Like uninspiring places to work. 
 When the profit motive is paramount 
 or when it becomes completely 
 unhitched from the purpose motive, 
 people don't do great things. 
 More and more organisations 
 are realising this, 
 disturbing the categories between 
 what's profit and what's purpose. 
 I think that actually heralds 
 something interesting. 
 The companies that are flourishing -
 profit, not-for-profit 
 or somewhere in between - 
 are animated by this purpose motive.
 Let me give you some examples. 
 The founder of Skype says, 
 "Our goal is to be disruptive, 
 "but in the cause of making 
 the world a better place." 
 Pretty good purpose. 
 Here's Steve Jobs. 
 "I want to put a ding 
 in the universe." 

English: 
 What we're seeing now 
 is when the profit motive becomes 
 unmoored from the purpose motive, 
 bad things happen. 
 Ethically sometimes, but also 
 bad things, like "not good stuff"! 
 Like crappy products. 
 Like lame services. 
 Like uninspiring places to work. 
 When the profit motive is paramount 
 or when it becomes completely 
 unhitched from the purpose motive, 
 people don't do great things. 
 More and more organizations 
 are realizing this, 
 disturbing the categories between 
 what's profit and what's purpose. 
 I think that actually heralds 
 something interesting. 
 The companies that are flourishing -
 profit, not-for-profit 
 or somewhere in between - 
 are animated by this purpose motive.
 Let me give you some examples. 
 The founder of Skype says, 
 "Our goal is to be disruptive, 
 "but in the cause of making 
 the world a better place." 
 Pretty good purpose. 
 Here's Steve Jobs. 
 "I want to put a ding 
 in the universe." 

English: 
 That's the kind of thing that might 
 get you up, racing to go to work. 
 I think we are purpose maximisers, 
 not only profit maximisers. 
 I think the science shows that 
 we care about mastery very deeply 
 and that we want 
 to be self-directed. 
 I think that the big take-away here 
 is that if we start treating people 
 like people, 
 not assuming 
 that they're simply horses - 
 slower, smaller, 
 better smelling horses - 
 if we get past the ideology 
 of carrot and stick 
 and look at the science, 
 we can build organisations and 
 work lives that make us better off. 
 They also have the promise to make 
 our world just a little bit better. 

English: 
 That's the kind of thing that might 
 get you up, racing to go to work. 
 I think we are purpose maximizers, 
 not only profit maximizers. 
 I think the science shows that 
 we care about mastery very deeply 
 and that we want 
 to be self-directed. 
 I think that the big take-away here 
 is that if we start treating people 
 like people, 
 not assuming 
 that they're simply horses - 
 slower, smaller, 
 better smelling horses - 
 if we get past the ideology 
 of carrot and stick 
 and look at the science, 
 we can build organizations and 
 work lives that make us better off. 
 They also have the promise to make 
 our world just a little bit better. 
