08/01/2012 § 2 Comments
I am not really motivated by money. The things that I prize most highly can’t be bought. So long as I have enough to provide me a reasonable standard of living, I don’t really think about money. I work for the satisfaction I get, for the challenge. Does this make me unusual?
Some would say so. I had an exchange by email recently with Financial Times columnist Luke Johnson. He had written that entrepreneurs are willing to give so much energy and go through all the emotional ups and downs of creating a business because, among other things “they want to make lots of money when they sell their company.” Interestingly, he went on to say that when they finally sell the business, and get to sit back and spend their money, they start to miss the bustle and excitement of business life and realise that large amounts of money are no substitute for this thrill.
I wrote to challenge his statement, the one in quotes above. I asked “Do you think the entrepreneurs you are describing would take a safer, duller path if they didn’t have the prospect of getting really rich at the end of it all? Or is it simply that society has conditioned them into believing that this is their right, that we live in a world of winners and losers and that if you are one of the 1% of winners you get really rich, if not, tough.”
I added: “I suspect that with different conditioning most entrepreneurs would be happy taking the same risks knowing that their reward will come simply from the joy of doing the work, of serving others, of living on the edge, of testing themselves at the extreme, of finding out who they are. But maybe I am a romantic. What about you?”
He wrote back saying; “The profit motive is very powerful and widespread. Moreover profit is necessary to reinvest and grow a business. Most entrepreneurs do not get rich, of course. But that spur and possibility is a vital part of the psychology.”
I have been reflecting on this exchange. I can see that my question was rather naïve. In effect I was asking: “If the world were different, do you think that people would behave differently?” The only answer possible is “Yes” and the rest is a matter for conjecture.
Still I think his statement, that all entrepreneurs are motivated, in part, by the prospect of getting very rich, is worth examining. It is, I believe, a convenient falsehood.
It is convenient because it justifies our winner/loser society. It justifies someone like Bill Gates being worth $56 billion (let me spell that out, since it is easy to miss how huge it is: $56,000,000,000. This is more than the GDP of Tunisia, with a population of 10 million people). It justifies the CEO of a state owned bank in the UK earning £10,000,000 per year, while nurses working in intensive care units earn £25,000 per year. Who has more stress? Who contributes more to society?
It is convenient because it allows those holding the levers of power, such as politicians and members of remuneration committees, to sit on their hands and watch this going on. And when the politicians leave office and obtain consultancies and directorships for huge fees, they tell themselves that all is as it should be. If they weren’t paid so much, they wouldn’t do such a good job.
And this assumption helps explain why recent proposals by the government, and also by the opposition, to curb excessive executive pay, are so half-hearted. They worry that if they take away the financial incentive, people won’t perform.
Yet it is a falsehood. Study after study has shown that people are not motivated by money – at least, not when the work they are asked to do involves even a slight degree of complexity. It turns out that I am not so unusual after all. Most people, it appears, are motivated by autonomy (self-direction – having the freedom to choose how you work), mastery (becoming really good at something) and purpose (having something meaningful to do). But not by money.
I know this because I saw it all on an excellent video by Dan Pink – to see it, follow this link.
Ironically, the video is published by the RSA (the Royal Society of Arts). And who is the Chair of the RSA? The aforementioned FT columnist (and former entrepreneur) Luke Johnson.
So, just in case you missed it, Luke Johnson, chair of the RSA, is publicly asserting the importance of the profit motivation while research published by the RSA convincingly and emphatically rules out the importance of the profit motivation.
But then, Luke Johnson is a wealthy man (net worth £110,000,000), a result of his entrepreneurial activity. Thus it is convenient for him to ignore research that suggests that people might take on such activity without the prospect of gaining excessive rewards.
I hope this doesn’t sound like I am envious of him. I am sure he worked hard and well at Pizza Express, that he gives lots of money to charity and does really good work at the RSA, an organisation I admire. I just regret the sad view of humanity we have, and that we retain despite credible research proving that it is not true. And I regret that we allow systems to prevail that share the benefits of our joint work so unevenly and so unfairly.