Part 1: The Hidden Costs of Carrot and Stick Management

Most organizations, as mechanically efficient as they aspire to be, motivate people very wastefully.

Instead of understanding people’s natural intrinsic motivations — their sources of meaning, fulfillment, inspiration, resilience and endurance — they rely on artificial extrinsic motivations. These positive and negative external motivations are often referred to as “carrots and sticks”.

No organization can entirely dispense with external motivations, for the simple fact that many employees are largely externally motivated. But some are not, and when employees who are internally motivated cannot find an outlet for them, and are managed as if they must be externally motivated, bad things happen, which we will discuss.

Let us call the habitual overuse of external motivations “carrot and stick management”.

Instead of creating conditions where people have opportunities to do the kind of work they feel called to do, carrot and stick management prefers bribes, blackmail and psychological manipulation to extract behaviors from their human resources.

Here are some downsides to carrot and stick management:

First, there is the expense of the carrots and sticks themselves. When work is a labor of love, people naturally work tirelessly just for the reward of doing it. When work is a labor of getting paid and not suffering consequences of noncompliance, pay must increase accordingly. Penalizing noncompliance also is not cheap; it requires documented processes. Carrot and stick management squanders cash on artificial motivations required to make folks do what they don’t want to do because natural motivations are lacking.

Second, carrot and stick requires considerable bureaucratic overhead, which is costly to create and maintain. In order to properly reward the desired behaviors and to correct or punish undesirable ones, managers must monitor those behaviors. They must build expensive technologies, establish reporting processes and enforce compliance, because these are dull activities people avoid if they can. Carrot and stick management squanders money and time on artificial motivation technologies and processes.

Third, carrot and stick management wastes an organization’s deepest and best resources — passions that, if channeled into the work, could infuse energy and vibrancy into the organization. Instead these passions are channeled into evenings, weekends, vacations and hopes for a better career elsewhere, where they are valued. The organization, instead of benefitting from these gifts, is resented for rejecting, undermining and obstructing them. And people are left feeling coerced, dehumanized, devalued and unfulfilled, which, for obvious reasons, is corrosive to an organization’s culture and contributes to turnover. Carrot and stick management squanders employees’ and partners’ morale, energy and desire to give.

Finally, demoralized people are demoralizing to interact with. Even if they stay at a job they don’t like and try with all their might to hide their feelings or numbness, they’ll behave in a spiritless, artificial and slightly phony, scripted way. They feel “corporate” in the worst sense of the word, and even the most perfectly executed corporateness is impossible to like. Brands that feel corporate do not inspire positive feelings or personal connection, and undermine brand relationship. Carrot and stick management squanders brand equity.

Part 2: Lessons of the Knitbone

Knitbone is the folk name for the comfrey plant (Symphytum officinale), a plant prized for a great many useful properties.

Traditionally, it has been used medicinally, especially to make poultices which help a wounded body heal itself. A knitbone poultice applied to a broken bone helps it knit itself back together. When my wife gave birth to our first daughter, our midwife prepared a poultice from knitbone we grew in our own back yard garden to help her recover.

But the knitbone used in the poultice had been planted for an entirely different purpose. We planted it in order to improve the soil in our herb garden.

The leaves of the knitbone are extraordinarily rich in minerals, and when they shed and fall onto the ground, they enrich the soil. They create a sort of fertile poultice for the plants around it. A knitbone ripples rings of vitality into all neighboring plants, which is why gardeners plant knitbone throughout their gardens.

Why does the knitbone have this effect on living things? The secret is its roots. When a knitbone is planted, it drops a taproot into the ground, which burrows into the earth, deeper and deeper, sometimes ten feet or more into layers of earth otherwise unreachable, drawing obscure, buried resources up to the sunny surface, where they can be accessed by other plants, animals and human healers.

Part 3: Restart with Whys

My essential service is understanding other people’s driving Why — those natural intrinsic motivations that give a person a sense of fulfillment and life purpose.

Before we can understand what a driving Why is we need to understand what it means to ask a why question.

Because most of us suffer a kind of philosophical color-blindness. Just as the retina of a color-blind person is missing a color receptor, our vision of work is missing a whole category of understanding.

We lack a Why receptor. We have only What and How receptors.

So when we ask Why, we perceive only a What-How answer. We expect an in-order-to response.

Why do you go to work? In order to get paid. Why do you need to get paid? In order to pay my bills and build savings. Why do you need to pay your bills? Why do you need to save money?

Of course, most of what we normally do all day is stuff we do in order to do other stuff, in order to… in order to…

And that is fine, as long as one condition is met: the in-order-to chain is grounded in something that is done for its own sake. It is done for no other reason except its own value.

Here there is no in-order-to. The answer to Why is “I cannot say why.” It is what I do. It is what gives my life purpose. I do it because I love it.

This is what the question Why seeks, and the response cannot be given in language. It is given in feeling and action. Words, at best indicate it, but when they are expected to give that Why, the meaning is lost entirely.

But if a person’s chain of in-order-to is plugged into Why it is all charged with significance. A person feels motivated to do x in order to do y, and z when the connection with Why is felt.

Further, an organization where Why is felt by enough people also enjoys a purposeful culture. Meaning is in the air and infuses the work, even for people who are largely externally motivated. The activities, expressions and outputs of internally motivated people enrich the soil of the organization, and the culture of the organization is nourishing.

People are not motivated by the slogans or mission statements or strategies or justifications of strategies. They are motivated by the energy, the sense of purpose, of importance, the atmosphere of intrinsic motivation.

To achieve this, it is of the highest importance for organizations to start accounting for their stores of intrinsic motivations, and ensure they aren’t wasting or blocking them.

It must understand where these driving Whys may naturally be designed into its operations, so they drive the organization in the direction it is trying to go. And so these driving Whys animate its interactions with customers, who feel and appreciate its charismatic sincerity.

It also must understand where people need these gifts from others — where someone who needs to be needed in a particular way — who wants to give their essential service — can serve another person who needs it. Whether this happens externally — for example when a customer who needs technical assistance is helped by someone who feels personal fulfillment using their expertise — or internally — for example a junior employee is mentored by a senior leader who wants to share her hard-earned wisdom — an internal exchange of value is a win-win.

These win-win points are the energy generators in an organization. This is where the organization provides opportunities for people to give what they need to give, and receive what they need to receive. This is where people feel gratitude and loyalty to one another and to the organization that mediated the exchange.

The choreography of these win-win value exchanges, and all the other value exchanges that power the human interactions that constitute the organization is the very heart of the work service design does.

Service design shapes, as its material, everything that makes up an organization, so it can mediate value exchanges among those who participate in it, whether receiving its products and services (as a customer) or delivering or supporting it. Whatever various materials are used, what sets the whole system in motion — what animates it and gives it vitality — is the exchange of value.

The material of service design is organizations; its medium is exchange of value, and the most vivifying value, the lifeblood that makes the system a living organic system and not a soulless mechanical system, is the driving Whys, the essential services that come from people who have found purpose serving within the organization.