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## Summary

Businesses are still not up to date with science when it comes to managing people. They rely on carrot and sticks. They reward the behaviors they seek and punish the ones they would like to avoid. Unfortunately, both methods have proved to be inefficient, even counterproductive especially when it comes to creative work. Daniel H Pink recommends changing the paradigm of management. To build a relation based on autonomy - the desire to control one's life, mastery - one's desire to progress and get better, and purpose -one's desire for a meaningful life, larger than one's self.

## Why carrots and sticks are not functioning anymore

### The states of management

As humans, we respond to our environment stimulus. We assume that positive stimuli are associated with good behaviors, the ones you want to repeat. while punishments are associated with bad behaviors, the ones you should avoid. Therefore, managers decided to associate rewards to the actions they want to see more of, and punished what they want to see less of. It worked. For simple tasks, algorithmic tasks. But when confronted with more complex tasks, requiring imagination, for example, this system can actually backfire.

### 7 reasons why it does not work

1. They can diminish intrinsic motivation: rewarding good behavior can associate it with actual work and, hence, transform a pleasure into a drudge.
2. They can diminish high performance. Small incentives do not necessarily improve performance while huge incentives can lower it.
3. They can crush creativity. Linking a carrot and stick to the time required to solve an issue shifts the focus away from the solution to the actual sticks/carrot. It streamlines the process but hinders creative solutions.
4. They can crowd out good behavior. Associating a carrot to a positive action can taint a genuinely charitable action with more venal motives. Reducing the attractiveness of the action.
5. They can encourage cheating and unethical behavior. Pushed by the reward, people may be tempted to cheat or find shortcuts, promoting bad behaviors.
6. They can become addictive. Once received, an agent will expect the rewards every time it performs the task and may be unwilling to do the task unless there is a reward. Furthermore, he may want an increasing reward for the same task as once received, a reward can be seen as a given.
7. They can foster short term thinking. short term reward encourages short term action with short term results, even if it jeopardizes long term survivability.

### The circumstances when it can work

Carrots and sticks can work, just in a specific environment. They are efficient when it comes to rule-based routine tasks. the task where there is little intrinsic motivation to do them in the first place. yet, the reward can be associated with autonomy, purpose, and mastery for greater effect. "If then" rewards are particularly dangerous for the 7 reasons mentioned before and must be associated with rigorous factual results. "Now that" rewards, given and announced only after the completion and not linked to a specific result, can be a good alternative for more creative tasks.

## The three pillars of the solution

### Autonomy

To move away from extrinsic rewards, we need to use intrinsic rewards. The first pillar is autonomy. By giving people choices regarding what they do, when they, how they do it, with who they do it, organizations can boost morale and productivity. Autonomy can be as simple as deciding to help someone during your work time. Voluntarily adding absorbing challenges to one's job can shift the focus away from the mundane task toward their own skills (spicing up cleaner, or nurses job for example).

### Mastery

Mastery is about getting better at something that matters to you. Mastery is an important pillar as it gives someone a sense of progression, of getting better at something, hence, generate motivation. In fact, getting better may be the strongest source of intrinsic motivation. Mastery is key to unlock the "Flow" state, a state where one can be completely involved with the task, losing the sense of time and oneself. It is unlocked when the difficulty of a task matches the skills of a person perfectly. MAstery is a mindset, the will to always improve. Mastery is a pain, it requires a lot of effort over time for unsure results. Mastery is the way, not the goal, true mastery can never be achieved.

### Purpose

Purpose is about the meaning behind what we do. People want to be part of something bigger than themself. Far from being an accessory, purpose is now at the heart of people's motivation. Companies should seek their purpose and use it as a powerful management tool, far stronger than just monetary incentives.

When implementing a purpose-oriented strategy, be mindful of policy settings. Policies are used to set a standard but can be corrupted into minimum requirements. You shift the mindset from "do it because it is the right thing to do" to "do it to check boxes". By putting quotas on hiring, for example, you do not necessarily change companies' beliefs, you are merely putting added constraints with criteria to check. Companies are now not necessarily pursuing an intrinsic motivation to do better, but they are just checking boxes to avoid being sue. You effectively transformed play into work, you have removed the genuine, trustful, part of the action.

To inject some of this purpose into the corporate bloodstream, it is possible to give back some control and autonomy to the agents. A possible solution is to offer employees the possibility to give part of their bonuses to a charitable action of their choice. Money being a hygiene factor (having more don't make you happier past a threshold), giving the extra cash to something you believe in, and something that matters can raise happiness.

## Toolkit

Big and small question: Ask yourself what is your big sentence. How will you be remembered in one phrase? (the big question) Then ask yourself, daily, was I better today than yesterday? What are my small steps toward my goal?

The Sagmeister: Every 7 years, Sagmeister takes a complete year-off to explore his deep interests and pursue something he really cares about. He also uses this time to generate business ideas for his next 7 years. The MBA could be considered a Sagmeister.

Purpose cards: put the reason why you do a thing on a card to remember it when motivation is low

A "not-to-do list": instead of writing everything you want to do, list all the things you want to avoid doing.

20% rules: save 20% of your work-time to advance on tasks you truly care about even if they are not directly related to your job. But be sure to deliver something. Start small, 10% for 3 months, and see where it goes. The annual company meeting can be turned into a fedEx day, a non-commissioned day where you have to deliver a project for the company.

In doubt, ask your employee about Autonomy, purpose, and mastery: Conduct an audit to measure employee satisfaction on this subject.