Corner Office-What Flips Your Pancakes?

Corner Office-What Flips Your Pancakes?

Desire for gain versus fear of loss.

As I was watching the AFC Championship game between the New England Patriots and the Indianapolis Colts in January, the difference between the two teams  became obvious. In the first half of the game, the Colts fell behind 21-3. It looked pretty bleak. But in the second half, they pulled off the biggest comeback in conference title history to record a 38-34 win over the Patriots. 

Why were the Colts able to mount such a successful comeback in their game with the Patriots? I believe it was because Indianapolis was motivated by the desire to win. So the Colts played to win, as opposed to the Patriots, who were motivated by the fear of losing their lead, and played so they would not lose. The desire for gain and the fear of loss are basic tenets of human psychology, whether it’s in sports, in everyday life, or in my favorite topic, business.

 

Expert Theories

Now it’s true that my graduate school psychology and sociology professors would tell you that I’m woefully unqualified to discuss human motivation. But that’s never stopped me in the past, and it’s not going to stop me from sharing Mark’s Theory of Human Motivation. But before I sprinkle you with the dust of my profound thoughts, let’s begin by examining what the experts have to say:

• Psychologist Abraham Maslow, who published “A Theory of Human Motivation” in the July 1943 issue of Psychological Review, devised the hypothesis that as humans meet basic needs, such as food and shelter, they seek to satisfy successively higher needs in a set hierarchy.

• Anthropologist Robert Ardrey, who wrote African Genesis and The Territorial Imperative, said that hunting and eating meat had a profound effect on human evolution, resulting in our need to gain and protect territory.

• Economist Lester Thurow, former dean of the Sloan School of Management at the Massachusetts Institute of Technology and an expert on global economics, proposed a theory called the “zero-sum game,” which says that the only way one person, business, or country achieves economic gain is to take it from another person, business, or country.

• And last but certainly not least, psychoanalyst Sigmund Freud is famous for his theories about how sexual desire motivates human behavior.

While I’m not an expert on motivation, my years of interfacing with thousands of businesspeople have taught me a few things about the subject. Based on my experience, I believe that if we condensed all of the theories about human motivation into their simplest form, we would find that people are motivated by either the desire for gain or the fear of loss. These theories are about the desire to gain fulfillment in a hierarchy of needs—more sustenance, more sex, more territory, more economic gain—and the fear of losing these things. Makes sense to me!

Motivation and Leadership

By now you’re wondering just what all this philosophical talk has to do with business leadership, and you wish I would just get to the point. Well, here’s the point, my impatient friends: In order to be an effective and successful business leader, you must understand basic human motivation, and that not all employees are motivated by the same stimulus. Your organization does not comprise a bunch of robots; it is a living organism made up of people who you must understand at their most basic motivation level in order to be an effective leader.

If you attend seminars or read business books that offer ways to use the power of persuasion to motivate people around you to do what you want them to do, you’ll learn to recognize that people are generally motivated by the desire to gain stuff, like more money, more success, more respect, and more happiness. Or sometimes they are motivated by the fear of losing their jobs, their health, their financial stability, or the respect of others. These motivators are often referred to as “carrots” and “sticks.”

If you’re a life-insurance salesperson or a pharmaceutical firm selling erectile-dysfunction drugs, you believe that the fear of loss is a powerful motivator. Folks like this obviously think that to motivate customers to buy something, they need to show customers how they can avoid a loss by using their product.

We know that a person’s motivators generally change over time. For instance, when I was a new business owner, I was motivated by the desire for gain because I was constantly working to gain new clients, grow market share, and increase revenues and profits. On an even higher level, I was motivated to gain a good reputation for our firm and for the other companies where I served as director. The desire to create a legacy and leave the world a better place is definitely at the top of my “desire for gain” category.

While these things are still important to me, as an experienced business owner not far from retirement, I find myself being motivated more frequently by the fear of loss. I’ve worked hard to establish a network of satisfied clients and a major piece of market share in our niche, in addition to a solid reputation. So the pancake is flipping to the other side. Now I fear losing clients, market share, or reputation. In the beginning I didn’t have much to lose, but now I have a lot to protect, so my motivations and my behaviors are different. 

In my investments, I am now more concerned with the return of my investment dollars than I am the return on the investments.  When I was younger, I would invest in initial public offerings, micro-cap stocks, and the like. My desire for gain and my risk levels were both very high. But now I invest in large-cap stocks, municipal bonds, and annuities. These products are much less risky and help to mitigate my fear of loss. 

 

Motivation in the Knowledge Economy

Through the years, I’ve also learned that being a business leader means acquiring a talent for inspiring different types of people who have various types of motivation. In today’s knowledge economy, it’s getting harder and harder to measure performance and simply motivate by reward or punishment. It seems like it was easier in the assembly-line days, when a job and money were enough for a manager to motivate  his or her employees to get things done. For example, some employees are motivated by the desire to gain a good career path, and the fear of losing a promotion to a co-worker, while others are motivated by the desire to gain raises, extra benefits, or just plain old praise and public recognition.

Believe it or not, I remember from my college psychology class that money as a motivator is at the lowest levels of Abraham Maslow’s hierarchy of needs. (Parents: Those tuition dollars do eventually pay off.) In addition to a paycheck, I think employees also expect praise and recognition, and the opportunity to apply their skills so they can feel proud about what they do. They also need a sense of job security, they expect to be challenged, and they want to feel what they do contributes to some sort of social good. These are all at the higher levels of Maslow’s hierarchy. Whatever the cause of motivation, I know that motivated employees do better work, are more productive, and take pride in providing good service to customers.

Business leaders can be effective motivators of their organizations (and of themselves) if they understand that what flips one person’s pancakes might not flip the next person’s. We have to take the time to get to know our co-workers, our employees, and ourselves.

I’ll close with a quote from one of my mentors, the late author and management guru, Peter Drucker: “We know nothing about motivation. All we can do is write books [and articles] about it.”

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