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