Not Just Carrots

My client Al Gardino is an intense man in his early 40’s who is a partner in a medium-sized firm of consulting engineers. About 18 months ago, he became the managing partner of his company and soon he began to schedule confidential meetings with me — just to bounce ideas around. Our discussions gave Al a chance to examine issues his firm was facing with someone other than the partners he had to work with every day.

Al generally doesn’t reveal his feelings, but as I walked into the boardroom I could see he was very upset. “We have developed a serious productivity problem on one of our major projects,” Al said, “and the partner in charge doesn’t want to deal with it.”

“What happened?” I asked.

“Until recently we had no difficulty in getting work, but finding competent staff was very hard. We made a major effort in marketing ourselves to the profession in order to be able to hire young engineers. We didn’t get everyone we wanted, but for a firm our size we did okay.

“Since then the market has changed dramatically. Clients can now pick and choose who does their work, and there are lots of people looking for jobs. With projects hard to come by, we have to make a major emphasis on pleasing our customers and being very price competitive.”

“You still haven’t told me what’s disturbing you.” I said.

“A couple of days ago, I took a call from a major client. He’d received an invoice from us that he thought was out of line. He spoke to the man running the project and basically was told that he was lucky to get the work done at that price. I know this customer pretty well. He’s very bright, and he’s usually reasonable. So when a guy like that complains, I have to take it very seriously. I spoke to the manager on the job who told me about some problems he encountered — although he admitted they were nothing out of the ordinary. I suggested that we would have to do better on price. He said that the team expected a bonus on this project and they wouldn’t get it unless there were no write-offs. So the team wanted to keep the billing the way it was.”

“Then what happened?”

“I might have lost my temper a couple of years ago, but I’ve learned something about people since then. I kept my opinions to myself and I had some informal conversations with people at different levels in our organization. That’s when I began to get worried. Here we are in the weakest economy in five years and instead of being happy they have a job, our people are angry they aren’t making enough money.

“I realize our new staff joined us because we promised them interesting work at high pay. Now they think the work’s not going to be so interesting and there may be layoffs. But it’s not the layoffs that worry them. The morale of our place is low, I think, because we hired a bunch of people who live for bonuses. And all my partners can think of is to keep giving them more money to keep them happy. I’d like to do it, but our business can’t work that way.”

“Do you have an alternative?” I asked.

Al grinned at me. “If I had an alternative, it wouldn’t be a problem would it? I was hoping you’d have some ideas for me. After all, you run a professional business, too.”

“Name a person whose accomplishments you really respect.” I said.

“Are you serious?”

“I am. Just bear with me. Name someone you really admire.”

“Albert Einstein,” Al said.

“Einstein is perfect. But anyone else would do — including your mother or father. Now tell me, what motivated Einstein? Do you think it was money, or something else?”

“It certainly wasn’t money.”

“My point is that people who accomplish things are not motivated primarily by money. They are internally motivated. A person motivated by extrinsic things like cash is not much different from a mule being driven by a carrot and a stick. The farmer uses the carrot to encourage the mule to pull a plow, and he uses the stick to hit it when it stops. When the farmer stops using the carrot and stick, the animal stops moving. It has no investment in plowing the field.

“You need to build your firm around people who are driven by the intrinsic benefits of working at your place,” I continued. “You have to make your people recognize the pleasure they get from working. You have to reconfigure the jobs in your outfit to maximize rewards other than financial ones, and develop your culture around it. You have to work hard to hire and keep those employees who find inherent satisfactions in their work, and maybe let the other people go.

“What I’m saying is simply that you should give a stronger, more overt emphasis to something you already do in indirect ways. It’s made a big difference in our firm and I’m sure it will in yours. And if you need it, we can help you develop some tools and programs to promote the use of intrinsic motivation in your business.” CCE

Hank T. Bulmash, C.A., MBA is a principal in Bulmash Cullemore chartered accountants of Toronto

“You need to build your firm around people who are driven by the benefits of

working at your place.”

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