Dan Pink spoke on TED.com about the way traditional businesses are build is often still with the old mindset from the industrial era using incentives like the “carrot and the stick” model to increase production performance. However for more complex tasks people get paralysed when put under pressure to perform by higher rewards. Rewarding systems work better when the task is simple and the details are well scripted, like in repetitive manufacturing work.
In this clip he explains the concept, and the statistics behind it.
Since I am working at SURFfoundation, I have noticed the same behaviour. People do not want to finish a project because of the large amount of money you put in to it, but because of the intrinsic motivation and a high level of autonomy. SURFfoundation subsidises innovative research projects, half paid by SURF, the other half by universities, but even on an unbalanced budgets (say 20% SURF, 80% universities), people are prepared to step in the project. Even when there is no money incentive at all, they want to work together with different universities to tackle a problem, because their intrinsic motivation is high. The only thing SURFfoundation has to do is to facilitate cooperation infrastructure (meeting rooms and synchronising agenda’s).
Daniel Pink points out that for higher performance on complex tasks the business model should thrive on intrinsic motivation. The elements that create intrinsic motivation are, according to Daniel Pink: Autonomy, Mastery and Purpose. This results in a completely new business model, abbreviated by ROWE (Results Only Work Environment).