Motivation and Compensation: It isn't all about money

     Everyone must put food on the table and find a way to squirrel out enough resources to keep Maslow happy with his famous five “hierarchy of needs” of physical (food), safety (get out of my cubicle), belongingness (include me in the information flow), esteem (I know what is going on around here) and lastly, self-actualization (I can lead the way.) We have discussed here previously Maslow and his description of these basic human requirements to get by, get along and get ahead, but what happens when you are just stuck trying to discern what is needed to motivate yourself or your team? Usually the answer is money. Show me the money, and I will show you the results. But, what happens when you don’t have the money for a pay raise or financial incentive, or worse, you have given that to your team, but they just can’t seem to get it done without your constantly micromanaging them?
     Enter the Law of Diminishing Returns, and the idea of a Break Even Point. The Law of Diminishing Returns tells us that there is a point where even with more effort or investment, results decline. The idea of a Break Even Point tells us that input (of money) equals output of effort up to a zero sum balance. That is to say, more money does not get you more effort past the psychological breakeven point. As I was asked in an interview once, “How much money do you need?” The hidden question is “How much money will make you lazy?” The point behind the question is “How do we motivate you when we can’t or won’t give you more money?” The correct answer is: It isn’t all about money.
     To that thought, here are some ideas to think about from an article I found in Inc. and offered up by entrepreneur Ilya Pozin. His company, Ciplex, made the Inc. 500/5000 list for 2011 of America’s fastest growing private businesses. Starting this company at age of 17, Ciplex is a digital marketing and creativity agency. Writing for Inc., Pozin’s article, 9 Things that motivate your employees more than Money, really caught my attention. When it comes to motivating yourself and your team, the answer may cost less than you think. Good stuff, so grab some coffee and think about this one for a minute. And there is no charge on this one either. 
According to Mr. Pozin:
     1. Be generous with praise. Everyone wants it and it’s one of the easiest things to give. Plus, praise from the Boss or leader goes a lot farther than you might think. Praise goes even further when you praise someone in front of others.
     2. Get rid of the managers. Love this one! Let people simply work as a team. There really are just some things that you cannot buy, and getting someone to come in early or stay late is an issue of motivation, not requirement. They may not do it for you, but they will do it for the group.
     3. Make your ideas theirs. It is all in the tone or turn of the phrase. “Do you think it’s a good idea if we do it this way?” is received much better than I need this done this way now. Remember, just because you say it harshly or loudly does not make it more accurate or necessary. (Unless of course the house is on fire.)
     4. Never criticize or correct. If you want adults, be adults. If you want children, treat people like children. Pozin suggests an indirect approach to get people to improve, learn from their mistakes, and fix them. Ask, “Was that the best way to approach the problem? Why not? Have any ideas on what you could have done differently?” Then you’re having a conversation and talking through solutions, not pointing a finger.
     5. Make everyone a leader. All you limelight huggers and glory hounds beware. You need to step away from the warmth of the spotlight and highlight your top performers’ strengths instead. Pozin suggests letting them know that because of their excellence, you want them to be the example for others.
     6. Take an employee to lunch once a week. Or just randomly do something nice for someone on your team. But, please don’t play favorites.
     7. Give recognition and small rewards. They don’t need to break the bank, but small tangible awards like dinner, trophies, spa services, and plaques are good places to start.
     8. Throw company parties. Remember when work use to be fun? Remind your staff that you’re all in it together.
     9. Share the rewards—and the pain. Be honest and transparent. Ask for opinions, and require a yes or no. You should not always agree for goodness sake. It is okay to have an original and intelligent thought that is different.

     If you never have any dissention, then you are not progressing as a team, and your entire effort is at peril if you lose the figurehead leader.

Thanks for taking a read this week, and I would look forward to your ideas as well.

Value Creation and Keeping Customers

Getting and keeping customers is an expensive endeavor and keeping the doors open in a time of local crisis makes it even tougher. The average U. S. business loses half its customers in five years. Generating a new customer costs five times as much as keeping a current one and firms pay a steep price when customers stray to other brands, or stray to other communities to make their purchase. In a slow economy, creating unsurpassed value for a customer so that they stay with you is even more important. So how do we create value?




Value creation in a firm takes a minute to think about. Ask yourself this question: Why does an individual make a purchase? The short answer is to fill a need. But the real answer is found in what motivates a person to do something to fulfill that need.



Psychologist A. H. Maslow developed a theory that characterized needs and arranged them in a hierarchy to reflect their importance called Maslow’s Hierarchy of Needs. Maslow identified five levels of needs, beginning with physiological needs and progressing to the need for self-actualization.



Physiological needs are the most basic. They fulfill the needs for survival like food, water, shelter and clothing. Pepperidge Farm French Toast Swirl Bread appeals to this need by stating “It doesn’t go with breakfast. It is breakfast.” Campbell’s Soup hits the mark with “Mm, Mm, good!” as does, “Got Milk?” Food is the most basic of need and as we like to say here, “Full Stomach, Open Mind.”



Next up the ladder you find safety needs which include security, protection, and avoidance of the unexpected. State Farm Insurance appeals to this need by saying, “Like a good neighbor State Farm is there.” In the wake of our damage recovery, maintaining a sense of security in our communities is a key element of recovery. The presence of the National Guard as well as the local elevated sense of social responsibility has been a critical element of pulling us up by pulling us together.



Third are social and belongingness needs which include the need to be accepted by an individual or group. Think about Olive Garden and their tagline, “When you’re here, you’re family.” We also see this come alive with the wonderful belongingness and leadership given by our Churches to support our tornado relief efforts. Many of them continue to request anonymity in their efforts, but rest assured, we know who you are and we thank you!



Fourth is the esteem need such as a need for a sense of accomplishment, the need for respect from others and the need to perform better than others. This is a universal human trait that emerges after lower order needs are satisfied. This may present in the purchase made to upgrade an airline seat, to have premium concert tickets, or as Sony touts, “Like no other.” I have found myself reassessing how I view this for myself in the events of the past few weeks and those in our community. Even in tragedy, this need is still obvious all around. I am reminded of Shakespeare and Twelfth Night where we read that “some are born great, some achieve greatness, and some have greatness thrust upon them.” If you are a leader in your community, please remember that the best help may come from the least obvious place.



Lastly, and also the very top need, is self-actualization. This is the desire for a person to reach their full potential. Many educational tours appeal to this need with an appeal to a person’s talent or capabilities. It may include a trip that includes a course of study such as language, history or cooking. Nike’s famous “just do it” is right on the mark for reaching potential. Self-actualization appeals to the desire to experience and learn something new such as at GE where “we bring good things to life.” Or, it may appear as the nice neighbor that you really don’t know who shows up with his chainsaw to help clear some trees from your driveway. And he also offers to get you some water and a sandwich. How cool and inspiring is that!



Understanding how your product fills one of these needs, and fits into the experience desired by your customer will help you to understand how to motivate that customer to act on a purchase. In light of the damage to our communities and continued recovery, I am reminded that this is not just about products, but it is in fact also about US. It is about our elected officials, our churches, and all the elements of our community. It determines who we are and how we react when the chips are down.