[MUSIC] Welcome to th third module of Managing the Company of the Future. In this module we're going to be looking at two important aspects of your management model. We're going to be talking about motivation, and we're going to be talking about objective setting. And if you look at this framework that we've been using throughout the last module, you'll see that essentially we're looking at the third and the fourth parts to this framework. And these are all about if you like the, the ends, the objectives of organizations, both at an individual and at a sort of a collective level. So, today in this particular segment we're going to focus on motivation. And as before we've got show it as traditional, as well as an alternative set of principles. Now, unlike the previous ones, this is a very old story. The notion that are different principles of how to motivate people, is at least 60 or 70 years old and then give you some very specific examples of some of the literature, which just have to understand that distinction. So, whereas, in the previous ones, we spent a lot of time looking at the pros and cons of the left model, and then the pros and cons of the right model. This time, we're going to do something a little bit different. We're going to, first of all, define what exactly we mean by motivation. And then we're going to work through some examples of companies that are focused on different combinations of drivers. So let's get some basic definitions up first. What is motivation? In really basic terms, it is the internal condition that activates behavior and gives it direction. In other words, something stimulates us as individuals to do things. And, of course, we can immediately see that there are different types of stimuli, or drivers, out there. Some of them more important than others. Some more important to certain individuals than others. And of course, depending on the circumstances, they're going to be much more focused on certain types of drivers than on others. I'm obviously going to talk about what those drives are in a minute. The point is that it's always about the kind of the mix, the blend of drivers, and getting the right balance between them, is the key, for us as individuals in terms of figuring out how we choose the right work for ourselves to do. But much more importantly from the point of view of this course. In terms of how organizations can, shall we say, tap into the right sort of sources of motivation for individuals. So that's the focus of this, of this particular segment and the, and the next. And I'll just warn you that motivation is one of the most kind of difficult, complicated, res, researched topics there is in the whole field of management and psychology. So, you know, if you, if you've taken entire courses on motivation before, I apologize. I'm going to be doing it a bit of a disservice. I'm going to kind of deliberately focus on a few highlights in order to get to the point. Let me just give you a little bit of historical context. This slide identifies three of the, kind of the, the fathers of motivation theory as we know it today. There are many other people who I'm not mentioning here. But these are people who everybody needs to have heard of. We'll start with Abraham Maslow, who was most famous, of course, for the so-called Hierarchy of Needs, and I've actually reproduced a Hierarchy of Needs on this slide. What did he say? He said, essentially, that it's impossible to come up with any generic sort of definition of what drives us as individuals. Because depending on our situation, we are driven by very, very basic, almost animal needs, around having a roof over our head, having enough food to put on our table, versus those of us who have taken that stuff for granted and can therefore focus if you like on the higher order needs. And so Maslow came up with this hierarchy, which is as I say one of the best known concepts in the whole field of management, that says essentially you start from these very basic needs and then you move up through some sort of security around yourself and then some sort of piece around, you know, you are sort of emotional connection to others. And then you finished up at the very top of the pyramid with this notion of what he calls self actualization. And what he meant by that was that, those of us, you know, in who are very comfortable and secure jobs. You know, with everything is basically taken, taken taken as red in terms of material needs and friendships. When the people in that sort of world actually worry about self actualization, being the best that they can be. So the point he's trying to make is that if we were worry about creating the right motivators, the right drivers of human behavior, you got to be very clear where your employees are within that hierarchy. Some people just need to be secure in earning money. Others have to be given, you know, exciting work to be done to, to, to get on that path to self-actualization. So that's Maslow. The second person I'm just going to bri-, briefly mention is, is Frederick Herzberg. All of these people were, were writing in the 50s and 60s. Herzberg did some, some very famous research where he, he looked at the drivers of job satisfaction. And the people who were most satisfied in their work, were people who were working in teams, they were doing interesting, challenging work. And then he asked them about what dissatisfied them? What made their job dissatisfying? And they would talk about things like, well, you know, the physical environment is just not very congenial or I'm not earning enough money. And what he figured out was in fact the drivers of job satisfaction are not the opposite of the drivers of job dissatisfaction, if you see what I mean. And so he came up with this notion of what he called hygiene factors. And the hygiene factors are the things that you've gotta get right. The things which you gotta be basically in place for people to leave, lead to achieve a basic level of satisfaction. And that's about having the right physical environment to work in. It's about having, you know, colleagues who are at least kind of acceptable. And, and importantly it's about having enough money. And he made this important point that, you know, having more money doesn't make you more satisfied, but if you haven't got enough money you're dissatisfied. So, actually, salary is a hygiene factor in his definition. And then all the other stuff, the, the things that make us satisfied, this is the stuff we're going to spend a bit of time on in the next few minutes. The third of these giants, if you like, of motivation theory that I want to just briefly acknowledge, there's a chap called Douglas MacGregor. And Douglas MacGregor is the guy who came up with the concept of Theory X versus Theory Y. And he said, look, there's two basic, sort of schools of thought on motivation. On the one hand, theory x says, people don't really like working. People work because they have to, because they have to put bread on the table. And so, what we have to do is to design a system in which we motivate people to do a good job by paying them. And this notion of essentially piece-base, piecework, paying for performance. Base is based on a Douglas MacGregor theory y, theory x rather, view of the world. Theory y says actually we kind of, we, we live to work. In other words, we enjoy our work. Work is intrinsically interesting. And therefore, as an organization, if we're employing people, our job is to somehow make the work as interesting and as exciting as it can be, at which point people will choose to give their discretionary effort. They will choose to work harder just basically of their own volition. And so these two theories, theory x and theory y, operate, you know, to varying degrees in different parts of the economy. The point of the story is the following, which is that these are self, self-reinforcing theories. You know, essentially, if you believe that people are lazy and don't want to work, you will put in place rigid control systems that essentially force people to work in a particular way. And they will actually behave in a way which consistent with that view. If on the other hand you actually believe fundamentally that people are to be trusted, that people actually do enjoy their work, you are likely to be much more liberal, much more free in terms of giving them the opportunity to figure out for themselves what they want to do. And for the vast majority of people, they will actually re, repay that investment in you. Most people will not cheat the system, if they think the system is fundamentally fair. The people who cheat the system are the ones who feel that somehow, they're being given a, a, a bad deal. So, MacGregor came up with these different points of view about how the world works, theory x, theory y, fairly, clearly in terms of the overall grand scheme that we've got here. On the left-hand side we've got the traditional principle around extrinsic motivation, very closely linked to Douglas MacGregor's theory x. The principle of intrinsic motivation on the right hand side, the alternative principles is much closer linked to Douglas MacGregor's theory y.
