I want to talk a little bit about labor and work.
When we think about how people work, the intuition we have is that people are like rats in maze — that all people care about is money, and the moment we give money, we can direct them to work one way, we can direct to work another way. This is why we give bonuses to bankers and pay in kinds of ways. And we really have this incredibly simplistic view of people work, and what the labor market looks like.
At same time, if you think about it, there’s all of strange behaviors in the world around us. Think something like mountaineering and mountain climbing. If you read books of people climb mountains, difficult mountains, do you think that those are full of moments of joy and happiness? No, are full of misery. In fact, it’s all about frostbite and having difficulty walking, and difficulty — cold, challenging circumstances. And if people were just trying to be happy, the moment they would to the top, they would say, “This was a terrible mistake. I’ll never it again.”
(Laughter)
“Instead, let me sit on a beach drinking mojitos.” But instead, people go down, and after they recover, they go up again. And if think about mountain climbing as an example, it suggests all kinds of things. It suggests that care about reaching the end, a peak. It suggests we care about the fight, about the challenge. It that there’s all kinds of other things that motivate us to work or in all kinds of ways.
And for me personally, I started thinking about this after a student came visit me. This was one of my students from a few years earlier, he came one day back to campus. And he told me the following story: He said that for than two weeks, he was working on a PowerPoint presentation. He working in a big bank, and this was in preparation a merger and acquisition. And he was working very hard this presentation — graphs, tables, information. He stayed late at night every day. And the before it was due, he sent his PowerPoint presentation to his boss, and his boss wrote him back said, “Nice presentation, but the merger is canceled.” And guy was deeply depressed. Now at the moment when was working, he was actually quite happy. Every night he was enjoying his work, was staying late, he was perfecting this PowerPoint presentation. knowing that nobody would ever watch it made him depressed.
So I started thinking about how do we experiment with this idea the fruits of our labor. And to start with, we created little experiment in which we gave people Legos, and asked them to build with Legos. And for some people, we gave them Legos and we said, “Hey, you like to build this Bionicle for three dollars? We’ll pay you three dollars for it.” And said yes, and they built with these Legos. And when they finished, we it, we put it under the table, and we said, “Would you to build another one, this time for $2.70?” If said yes, we gave them another one, and when finished, we asked them, “Do you want to build another one?” for $2.40, $2.10, so on, until at some point people said, “No more. It’s not worth it for me.” This what we called the meaningful condition. People built one Bionicle after another. they finished every one of them, we put them under the table. And told them that at the end of the experiment, we will take all these Bionicles, we will them, we will put them back in the boxes, we will use it for the next participant.
There was another condition. This other was inspired by David, my student. And this other we called the Sisyphic condition. And if you remember the story about Sisyphus, was punished by the gods to push the same rock up hill, and when he almost got to the end, rock would roll over, and he would have to again. And you can think about this as the essence of doing futile work. You can imagine that he pushed the rock on different hills, at least he would some sense of progress. Also, if you look at prison movies, sometimes the way that the torture the prisoners is to get them to dig hole, and when the prisoner is finished, they ask him to fill the back up and then dig again. There’s something about cyclical version of doing something over and over and over that seems to be demotivating.
So in the second condition of this experiment, that’s exactly what we did. We asked people, “Would you to build one Bionicle for three dollars?” And if they yes, they built it. Then we asked them, “Do you to build another one for $2.70?” And if they said yes, gave them a new one, and as they were building it, we took apart the one that just finished. And when they finished that, we said, “Would you like to build another one, time for 30 cents less?” And if they said yes, we them the one that they built and we broke. So this was an endless cycle them building, and us destroying in front of their eyes.
Now what happens when you these two conditions? The first thing that happened was that people built more Bionicles — eleven in the meaningful condition, versus in the Sisyphus condition. And by the way, we point out that this was not big meaning. People were not curing cancer or building bridges. People building Bionicles for a few cents. And not only that, everybody knew that the Bionicles would destroyed quite soon. So there was not a real opportunity for big meaning. But even small meaning made a difference.
Now we had another version of this experiment. this other version of the experiment, we didn’t put people in this situation, just described to them the situation, much as I am describing to now, and we asked them to predict what the result would be. happened? People predicted the right direction but not the magnitude. People who were just given the description of the experiment said that the meaningful condition, people would probably build one more Bionicle. So people understand meaning is important, they just don’t understand the magnitude of the importance, extent to which it’s important.
There was one other piece of we looked at. If you think about it, there are some people who love Legos, and some who don’t. And you would speculate that the people who Legos would build more Legos, even for less money, because after all, they get more internal joy it. And the people who love Legos less would build Legos because the enjoyment that they derive from it is lower. And that’s actually what we found in meaningful condition. There was a very nice correlation between the love of and the amount of Legos people built.
What happened the Sisyphic condition? In that condition, the correlation was zero — there no relationship between the love of Legos, and how much people built, which suggests to that with this manipulation of breaking things in front of people’s eyes, we crushed any joy that they could get out of this activity. basically eliminated it.
Soon after I finished running this experiment, I went talk to a big software company in Seattle. I can’t tell you they were, but they were a big company in Seattle. This a group within the software company that was put in a different building, and asked them to innovate, and create the next big product for this company. the week before I showed up, the CEO of big software company went to that group, 200 engineers, and canceled the project. And I stood there in of 200 of the most depressed people I’ve ever talked to. And described to them some of these Lego experiments, and they said they like they had just been through that experiment. And I asked them, I said, “How many of now show up to work later than you used to?” And everybody raised their hand. I said, “How many you now go home earlier than you used to?” raised their hand. I asked them, “How many of you now add not-so-kosher things to your reports?” And they didn’t raise their hands, but they took me out to dinner and showed me what could do with expense reports. And then I asked them, I said, “What could the CEO have done make you not as depressed?” And they came up with all kinds of ideas.
They the CEO could have asked them to present to the whole company about their journey the last two years and what they decided to do. He could have asked them think about which aspect of their technology could fit with parts of the organization. He could have asked them to some next-generation prototypes, and see how they would work. But the thing is that any one those would require some effort and motivation. And I think CEO basically did not understand the importance of meaning. If the CEO, just like our participants, the essence of meaning is unimportant, then he [wouldn’t] care. And he would say, “At the moment directed you in this way, and now that I’m you in this way, everything will be okay.” But if you understood how important meaning is, you would figure out that it’s actually important to spend some time, and effort in getting people to care more about what they’re doing.
The next experiment was different. We took a sheet of paper with random letters, and we asked to find pairs of letters that were identical next to each other. was the task. People did the first sheet, then we asked if they wanted to do another for little less money, the next sheet for a little less, and so on and so forth. And we had conditions. In the first condition, people wrote their name on the sheet, found the pairs of letters, gave it to the experimenter, the experimenter would look it, scan it from top to bottom, say “Uh huh,” put it on the pile next to them. In the second condition, people not write their name on it. The experimenter looked it, took the sheet of paper, did not look at it, did not scan it, simply put it on the pile of pages. So you take a piece, just put it on the side. In the third condition, the got the sheet of paper, and put it directly into a shredder.
(Laughter)
What happened those three conditions?
In this plot I’m showing you at what pay rate stopped. So low numbers mean that people worked harder. They worked for much longer. In the condition, people worked all the way down to 15 cents. 15 cents per page, they basically stopped these efforts. the shredder condition, it was twice as much — 30 per sheet.
And this is basically the result we had before. You shred people’s efforts, — you get them not to be as happy what they’re doing. But I should point out, by the way, that in shredder condition, people could have cheated. They could have done so good work, because they realized people were just shredding it. maybe the first sheet you’d do good work, but you see nobody is really testing it, so you would do more and more and more. So fact, in the shredder condition, people could have submitted more work and gotten more money, and put less into it. But what about the ignored condition? Would the ignored condition be like the acknowledged or more like the shredder, or somewhere in the middle? It out it was almost like the shredder.
Now there’s good news and news here. The bad news is that ignoring the performance of people is as bad as shredding their effort in front of their eyes. Ignoring gets you a whole out there. The good news is that by simply looking at something somebody has done, scanning it and saying “Uh huh,” that seems to be quite to dramatically improve people’s motivations. So the good news is that motivation doesn’t seem to be so difficult. The bad news is that eliminating motivations seems to incredibly easy, and if we don’t think about it carefully, we might overdo it. So this is all in of negative motivation, or eliminating negative motivation.
The next part I to show you is something about positive motivation. So there is a store the U.S. called IKEA. And IKEA is a store with kind of okay furniture takes a long time to assemble.
(Laughter)
I don’t know about you, but every time assemble one of those, it takes me much longer, it’s more effortful, it’s much more confusing, I put things in the wrong — I can’t say I enjoy those pieces. I can’t say I enjoy the process. But when finish it, I seem to like those IKEA pieces of furniture than I like other ones.
(Laughter)
And there’s an story about cake mixes. So when they started cake mixes in the ’40s, they would take this powder they would put it in a box, and they would ask to basically pour it in, stir some water in it, mix it, it in the oven, and — voila — you had cake. But it turns out were very unpopular. People did not want them, and they thought about all kinds of for that. Maybe the taste was not good? No, the taste was great. they figured out was that there was not enough involved. It was so easy that nobody could serve cake to their guests and say, “Here is cake.” No, it was somebody else’s cake, as if bought it in the store. It didn’t really feel like own. So what did they do? They took the eggs and the milk out the powder.
(Laughter)
Now you had to break the eggs and add them, you had to measure milk and add it, mixing it. Now it was your cake. Now everything fine.
(Laughter)
(Applause)
Now, I think a little bit the IKEA effect, by getting people to work harder, they actually got to love what they’re doing to a higher degree.
So how we look at this question experimentally? We asked people to build some origami. We them instructions on how to create origami, and we gave them a sheet paper. And these were all novices, and they built something that was quite ugly — nothing like a frog or a crane. then we told them, “Look, this origami really belongs to us. You worked for us, I’ll tell you what, we’ll sell it to you. How much do you want to for it?” And we measured how much they were willing to pay for it. And had two types of people: We had the people who built it, and the people who did build it, and just looked at it as external observers. And we found was that the builders thought that these beautiful pieces of origami —
(Laughter)
and they were to pay five times more for them than the people who evaluated them externally. Now you could say — if you a builder, do you think [you’d say], “Oh, I love this origami, but I know that else would love it?” Or “I love this origami, and else will love it as well?” Which one of those two is correct? Turns out builders not only loved the origami more, they thought that everybody would the world in their view. They thought everybody else would it more as well.
In the next version, we to do the IKEA effect. We tried to make it more difficult. So for people, we gave the same task. For some people, we made it harder by hiding instructions. At the top of the sheet, we had little of how you fold origami. For some people, we just that. So now this was tougher. What happened? Well an objective way, the origami now was uglier, it was more difficult. Now we looked at the easy origami, we saw the same — builders loved it more, evaluators loved it less. When you looked at the hard instructions, the was larger. Why? Because now the builders loved it even more.
(Laughter)
They put all extra effort into it. And evaluators? They loved it less. Because in reality, it was even uglier than the version.
(Laughter)
Of course, this tells you something about we evaluate things.
Now think about kids. Imagine I asked you, “How much you sell your kids for?” Your memories and associations and so on. Most would say for a lot, a lot of money.
(Laughter)
On days.
(Laughter)
But imagine this was slightly different. Imagine if you did not have your kids. one day you went to the park and you met some kids. They were just like kids, and you played with them for a few hours, and when you were about leave, the parents said, “Hey, by the way, just before you leave, you’re interested, they’re for sale.”
(Laughter)
How much would pay for them now? Most people say not that much. And is because our kids are so valuable, not just because of they are, but because of us, because they are so connected to us, and because of the and connection. By the way, if you think IKEA instructions are not good, what about the instructions that with kids, those are really tough.
(Laughter)
By the way, these my kids, which, of course, are wonderful and so on. Which to tell you one more thing, which is, much like our builders, when they at the creature of their creation, we don’t see that other don’t see things our way.
Let me say one last comment. you think about Adam Smith versus Karl Marx, Adam Smith a very important notion of efficiency. He gave an of a pin factory. He said pins have 12 steps, and if one person does all 12 steps, production very low. But if you get one person to do step one, and one person to do two and step three and so on, production can increase tremendously. And indeed, is a great example, and the reason for the Industrial and efficiency. Karl Marx, on the other hand, said that alienation of labor is incredibly important in how people think about the to what they are doing. And if you do 12 steps, you care about the pin. But if you do step every time, maybe you don’t care as much.
I think that in the Revolution, Adam Smith was more correct than Karl Marx. But the reality is we’ve switched, and now we’re in the knowledge economy. can ask yourself, what happens in a knowledge economy? Is efficiency still more important meaning? I think the answer is no. I think that as we move to situations in which people to decide on their own about how much effort, attention, caring, how connected they to it, are they thinking about labor on the way to work, in the shower and so on, all of a sudden Marx has more to say to us. So when we think about labor, we usually think about and payment as the same thing, but the reality is we should probably add all kinds of things to — meaning, creation, challenges, ownership, identity, pride, etc.
The good news is that if we added all of components and thought about them — how do we create own meaning, pride, motivation, and how do we do it our workplace, and for the employees — I think we could get people to both more productive and happier.
Thank you very much.