Susan's Business Book Reports

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Primed to Perform
Primed to Perform

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`Primed to Perform by Neel Doshi & Lindsay McGregor`⁠
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Book Summary, February 2020, Susan Alban

Susan voiceover

TLDR: This book convincingly makes the case for driving adaptive performance through the direct motivators of Play, Purpose and Potential, and for scrapping the indirect and oft-used Financial and Social pressure motivators (as well as Inertia).

Things I like

Data-driven (albeit not highly replicable) approach for demonstrating key drivers of performance and their relative magnitudes/importance.

Specific actionable ideas about how to drive total motivation through organizational culture, goal setting, role design, ladder design, and compensation.

A data-driven repudiation of pervasive pay-for-performance practices.

Things I probably wouldn’t do

I like the point that regardless of level, among lower paid hourly employee and highly compensated professionals, the book challenges the reader to consider underlying motivation drivers, and demonstrates that those two groups have more in common with each other than not.

However, I think it misses a few basics that I’ve observed in hourly employee bases, namely that unless/until the employer is certain they are paying the employees at/above market and demonstrating that advancement is equitable (or at least not blatantly UNFAIR/mired in nepotism), the employer hasn’t earned the right to talk about role design and other components with its employees.

Think about it like Maslow’s hierarchy of needs and those base elements need to be true first. Unfortunately, they are often missing.

Primed to perform theory

Theory = Total motivation maximizes "adaptive culture” (defined below) —>

direct motives (play/purpose/potential) trump indirect motives (emotional pressure, economic pressure, inertia) for optimizing total motivation (ToMo)

Highest levels of organizational or team performance require a balance between tactical and adaptive performance.

Definition of high-performing culture - the system that maximizes adaptive performance through total motivation.

Definitions of Adaptive and tactical performance

Tactical - how well you execute the plan

Comes from strategy

Adaptive - how well you diverge from the plan, especially in the presence of volatility, uncertainty, complexity, ambiguity

Comes from culture

“Culture eats strategy for breakfast” -Peter Drucker.

The case for adaptability - average time a company remains in the S&P500 was 17 years in 2009, down from 45 in 1955. McKinsey found that the best growth strategies over a long period of time is to center new, fast-growing spaces, whether they are new products, segments, or countries.

Measuring culture

Motivation over employee satisfaction

Measure motivation, which drives adaptive performance, not employee satisfaction (satisfaction doesn’t always lead to adaptive performance and satisfaction can create inertia, which is the most harmful of motives)

Motivation comes from direct motives and indirect motives - from most impactful / important to most damaging. (Relative weights are in parenthesis, meaning that Play is 2x as strong a driver as Purpose and 6x as strong as Potential)

Direct

Play (10) - work for the sake of work, enjoying what you do, finding flow, curiosity and experimentation, learning and adapting.

Purpose (5) - work because you value the impact or outcome.

Potential (1.66) - Doing the work because ultimately it will lead to something; it is a step removed from purpose. Can be doing a job because it will help you develop a skill because it will help you get something you want. A lot has to do with goal attainment.

Indirect

Emotional pressure (-1.66) - when emotions such as fear/FOMO, disappointment, guilt or shame compel you to do something.

Economic pressure (-5) - when you do something to win a reward or avoid punishment. Not only about money (e.g., could be earning a merit badge for a Boy Scout) and effects those at all income levels.

Inertia (-10) - keep doing what your doing because you’re on the path, no good reason to leave.

Methodology: To value ToMo, have people rate how much they agree with a particular statement in that category from 1 (strongly disagree) to 7 (strongly agree) and then sum product the answers by the weighting (p108). Call each element a factor not a score.

Driving Total Motivation

Higher motivation (ToMo) associated with:

Staying in school longer (versus dropping out), sticking with competitive swimming, better quality creative work/output (e.g., poet priming example on p36)

Better adaptive performance (ability to diverge from the plan in times of volatility, uncertainty, complexity and ambiguity) — as opposed to tactical performance, which is a person’s ability to follow the plan.

Value of adaptive performance: “Everybody has a plan until they get punched in the mouth” - Mike Tyson

R-square of 74 between ToMo and customer experience ratings in the mass market retail industry.

15 is a good ToMo advantage because the difference is felt by customers and employees - Apple Stores (+14), Nordstrom (+15), Whole Foods (+14), Starbucks (+18), Southwest (+14).

Damaging motivation and culture

Negative effects of indirect motivators:

Distraction effect - pressure from economic rewards can cause people to choke when the stakes are high. They are distracted from the task at hand by the reward being offered.

Cancelation effect - the economic pressure (or emotional) means that people will start trying to optimize only for reducing that pressure, ie, doing something as a box-checking exercise to get a particular award. Performance based rewards tend to cancel out the natural sense of play, thus reducing persistence.

Cobra effect - English colonists in India wanted to reduce the number of cobras in Dehli, so they offered a reward for dead cobras…. People started cobra farms. This is the effect where people try to game the system - e.g., create lumpy sales when all sales are pushed through at the end of the quarter, call center agents who hang up on callers to increase their calls/hour metric.

Often this leads companies to build in more controls and hire people to police bad behavior.

Culture inhibitors

Blame -

Fundamental attribution error / blame bias - People have a tendency to blame others for negative outcomes, versus circumstances. E.g., even in a clearly-rigged game, the winners believe they won because of their superior skill and ignore the rigging or any elements of luck. They implicitly believe that their opponent is less skilled. This is a manifestation of the fundamental attribution error.

The more distance to the person or the circumstances, the more likely people are to blame the individual (versus looking for systemic issues and solutions).

People start to think that others are motivated only by money or other indirect motivators - e.g., call center/MBA example where MBAs rank what motivates them (learning, skills, feeling good about yourself), then rate what they think call center agents value (pay, security, benefits); in reality call center reps say they value more direct motivators (skills, worthwhile work, learning).

Outcome bias - when someone makes a mistake, if it results in something not too bad, we don’t blame; if someone makes the exact same mistake but it results in something bad, we blame.

90% of HR executives believe that their performance management systems tied inaccurate results. -Corporate Executive Board

Unfair review processes reduce ToMo by 33 points.

Many systems look at the what, not the how, so we can reward the wrong behaviors.

How to counter blame -

Don’t hate the player, hate the game

Have high expectations - all experiments where the evaluator is told that they have a group of high performers do better than if the evaluator is told nothing or told they have a mix. Expectations lead evaluator to remove blame, give people the benefit of the doubt, teach/nurture, and the team does better.

Remove blame and attribution in negative feedback - what if you assume it’s the game not the player. Come up with five alternative scenarios that would explain the person’s behavior in a way that doesn’t blame them. Then ask them what’s up.

Get closer to the person and the situation —> helps counteract blame.

Positive leadership behaviors

Ranked in order of correlation with specific facets of ToMo

Play

(Prime play in onboarding —> is there a way to get people experimenting from day 1?)

Time/space/encouragement to experiment and learn

Makes it clear what it means to be performing well

Challenges you to solve problems yourself

Purpose

Helps you see that your work is important and meaningful

Role models and expects you to live by positive, consistent values and a common sense of purpose

Puts the customer’s interests first

Potential

Actively links the work with you personal goals

Helps you develop and focus your time on your strengths rather than your weaknesses

Provides you with more responsibility as your skills grow

Emotional pressure - reduces potential for people to feel fear, shame, guild or peer pressure.

Ensures targets and goals are fair and reasonable

Is fair, honest, transparent

Enables friendships at work

Economic pressure -

Avoid using rewards/punishments to coerce people to work and rather ensures you are evaluated holistically

Inertia

Removes obstacles from your path and makes sure that your work will have impact

Makes it easy to get things done and ensures you don’t waste effort.

Novel goal setting construct

Effort goal - “do your best” (hands-off leader)

Tactical goal - Increase market share to X% (more quid pro quo style)

Adaptive goal - Learn six new strategies for increasing market share. Find four new ways to make our process less complicated. Find three new ways to describe how these products create value. Find three new ways to proactively address customer complaints on the first call.

Encourages testing six new strategies without a super tight focus on the outcome.

Identity

Key behaviors/areas that should be reinforced are below. Codify the behaviors that help define how people are supposed to behave on the areas below (and that will enable the company to go from where it is today to where it wants to go):

Problem solving - how do you avoid blame bias and other common decision biases?

Prioritization - how does the org make trade-offs?

Conflict/decision making - when is consensus required? Who needs to sign off? What do you do when there are differing opinions?

Motivation - how are leaders supposed to motivate?

Heritage - what symbols, practices, rituals are sacred?

Are there elements of the company’s history that tie to its purpose and how you want people to behave?

Are there traditions that reinforce?

Role design

(p189 has good list of questions about role) - Job design is important: A meta-analysis of hundreds of studies found that job design characteristics explained 34 percent of the variance in subjective performance, 38 percent in perceived stress, 55 percent in job satisfaction, 65 percent in feeling overloaded, and 87 percent in job involvement.

Traveler’s insurance key puncher role redesign — were initially just punching / data entry and checking their work. Then became the point person for a specific department and owned all interaction with that internal customer. Had freedom to prioritize work how they saw fit, experiment. They also started receiving their own error reports (instead of having them go to their boss). Error rates dropped 35 percent relative to control; absenteeism 24 percent (control had a 29 percent increase), 17 percent higher satisfaction, 40 percent higher productivity.

Three elements

WHOLE - Impact theory -

Role needs to be designed so that the employee can see enough of the chain of activities to connect action and outcome, cause and effect.

Need data and time for reflection to understand how role has impact.

Need to be responsible for a whole, identifiable piece of work.

MIX - Inspiration and skill variety-

Roles must have exposure to inspiration - e.g., enough time to talk to customers, enough space to interact with colleagues.

Parameters for where the person can play/experiment, versus where tactical performance (clear SOPs, timelines) is most important. Eg., at Starbucks, a particular drink can only be made one way, but how a barista deals with a particular customer or employee situation is highly variable.

SIGNIFICANCE - needs to have impact on other people or customer

Key drivers of ToMo in role design

Enables experimentation - +68 points

Learning through variety - +68

Make you feel a sense of purpose - +64

Don’t work alone - +36

Agile - companies that implement increase productivity by 200-400 percent. (Source:

http://ow.ly/GqKkb⁠

; Steve Denning “Scrum is a Major Management Discovery, Forbes, 2011)

Ladder design

Basic premise is that ladders shouldn’t just be focused on management. Ladders should be focused on skill acquisition, learning, increasing organizational impact. There can be expert paths, management paths, customer expertise paths, etc.

Dynamics of a good ladder:

High clarity on what good performance looks like at each rung +33 points

Holistic expectations at each rung that includes both tactical and adaptive performance +28

When workers can self-identify whether or not they meet criteria for good performance (rather than a manager having to tell them) +29

Compensation

Pay for performance generally increases economic pressure and reduces ToMo — can create cancelation effect, distraction effect, cobra effect, etc.

Meta analysis of 128 academic studies found that performance-based rewards tend to cancel out the natural sense of play, reducing persistence. (Source: Psychological Bulletin 1999 -

http://ow.ly/L6aiQ⁠

)

Many organizations end up doubling down on policing employee behavior.

(But by adding in minimum guarantees, that can reduce the pressure. - e.g., windshield installation where the installers get a minimum hourly, are paid for certain productivity gains, and need to do the reinstall for anything faulty)

Lear (Fortune 500, 115K people) - removed linkage of compensation to performance reviews. Salaries determined by market conditions (not by annual reviews or even increased annually)

SAS has grown to $3B in sales without stock options or sales commissions.

Fog Creek (Trello) also removed sales commissions.

Communities

Free rider effects increase the bigger the group is, when an individual’s contribution can’t be determined, and when there is a lack of community (or people knowing each other). Strong community yields ToMo increase of 60.

Marketplace versus society - society trumps because orgs need citizenship, because cooperation/consistency is critical; because organizations carry the cost of the cobra effect

Dunbar number - 150 is max group size for maintaining meaningful relationship

Build organizations at various levels -

Village - 150 people - can have a big huddle regularly; if it gets bigger than 150, break it up.

Band member - 50 people - good for sharing knowledge and being creative. “Communities of practice” in the research/science way.

Hunting party member - 10-15 people - like the Amazon/Bezos “two pizza rule” where you don’t want a team working on a shared goal to get bigger than 2 pizzas will feed. Sports teams are a good example. Hunting parties should spend at least 30 min / week together.

Confidante - closest connections of a few people. 25% of C-level execs have very low connectedness scores (maybe no confidantes).

Having a confidante makes people more resilient and healthier - there was a study with an impossible-to-solve math problem. Some participants were given a piece of paper with a tip that was signed by a particular name (e.g., "from Carol”); others just got the tip with no name. The ones with the name spent 50% more time working on the problem and felt less drained.

Gore (Goretex) did a really good job of this (there is a Fast Company article). $3B+ revenue; top 150 private company. Turnover at 5 percent.

Coordination and consistency

This is CRITICAL for driving ToMo

Believing in either your job or your org creates max ToMo of 5-10; believing in both creates max of 40

Having a confidant at work without play yields ToMo of 3; having experimentation without a confidant yields 16; having both yields a max of 46

“Building a culture ecosystem that is internally consistent requires many cultural keys to be aligned. Career ladders, performance management systems, compensation, village identity, leadership behaviors and all the other keys described so far need to be designed to increase total motivation. In most organizations, the keys are either managed by separate people or they are not managed by anyone"

Changing culture

“Darkness cannot drive out darkness; only light can do that” - MLK.

Means that the process by which you build or rebuild your culture must itself be high ToMo. You have to lead change in ways that create play, purpose, potential, not pressure.

Insight is that heavily top-down drive for this will have deleterious effect.

Primed to Perform by Neel Doshi & Lindsay McGregor