Two questions guided our choice of interview subjects for this issue. First, what makes this Millennial generation tick? And the larger question, what makes human beings tick in general? Which led us to the work of bestselling author Daniel Pink and his latest megabestseller, Drive. Dan is the author of the previous bestsellers Free Agent Nation, A Whole New Mind, and The Adventures of Johnny Bunko, which earned the distinction of being the first ever American manga business book and the only graphic novel ever to become a BusinessWeek bestseller. (Think about that. This is a dude who knows something about innovation.) According to Drive, there has been a sea change in the nature of what motivates us in the workplace, and if we want our businesses to be successful, we'd better understand what that change is all about. — J.D.M

What has shifted in the nature of what motivates us, and why?

I think what motivates us has always remained more or less the same. What's shifted is the nature of what people are actually doing on the job.

Human beings have a mix of drives and motivations. We have a biological drive: we eat when we're hungry and drink when we're thirsty. We have sex to satisfy our carnal urges. That's part of what it is to be human, but not all of what it is to be human.
We also have a second drive, which is that we respond very well to rewards and punishments in our environment. Typically, if you reward something, you get more of that behavior, and if you punish something, you get less of that behavior.

That's an important motivator and it explains a lot of our behavior.

However, we also have a third drive.

Sometimes we do things, not because they satisfy some biological urge or they make us money, but because we like doing them. Because they're interesting, because they're part of who we are, because they contribute to the world.

Human beings have always had this third drive. What has changed is that today, that third drive is the secret to high performance.

As fifty years of research in human motivation shows, that second, carrot-and-stick, reward-and-punishment drive is very good for simple, rule-based work, what psychologists call "algorithmic work," such as turning the same screw the same way on an assembly line, stuffing envelopes, adding up figures.

But the science is equally clear that those kinds of if-you-do-this-then-you-get-that motivators do not work very well at all for the more creative, complex, non-routine kinds of work most people are doing today.

We need to stop using these nineteenth- and twentieth-century kinds of motivational mechanisms for twenty-first-century work.

There is a sort of through-the-looking-glass quality in your book Drive. in that it talks about circumstances where a carrot-and-stick approach can actually demotivate us.

That's true; there are certain circumstances where, if you reward the behavior you want, you actually get less of that behavior, and if you punish a behavior, you get more of it.

As complex as that is, it's also good news, because it suggests that human beings are not purely predictable robots. We are more complex and interesting than that. We are in some ways more screwed up than that, too—but also more enlightened.

I keep reading that people today are looking for more fulfilling kinds of work. It used to be the accepted wisdom that work that is intrinsically fulfilling is kind of a luxury.

Interesting. That's a really good point, and I think it's one thing that is forcing this new approach to motivation. I do think there has been a change. As work becomes more complex, creative and interesting, it has become more a source of inherent satisfaction.

The conventional economic theory is that work is something anybody would normally avoid, so you have to pay people to do it. In other words, that people are willing to trade off the drudgery of work in order to get the money.

But in a lot of cases, people are doing things they actually enjoy. Not that they would necessarily want to do it for free, but they're not doing it only for the money.

In that context, promising them additional amounts of money to do something they already like doing doesn't necessarily work in the mechanical fashion that a lot of people might expect.

We've always been taught to believe there is a kind of airtight law of behavioral physics, where you get more of the behavior you reward and less of the behavior you punish. That's true, in a lot of cases—but not always, and in fact, not nearly as often as we expect.

I recently sat through a very lively, engaging workshop by a leading motivational speaker, the central proposition of which was that everything is reward and punishment, baby. You want good performance? Design the reward system. And I walked out of there saying, "It feels like there's something missing here."

Yes—and what's missing is that it's not that easy. I think the reason we see such staggering levels of disengagement in the workplace is not that we haven't calibrated the reward correctly. It's that we think the only way to get performance is to hold out bigger rewards. And that's just empirically not true. The science says it just doesn't work that way.

You talk about type X and type I. Where did these come from, and what do these two types mean in this context?

These are really two kinds of behavior, rather than inherent personality types.

There are some people who are more intrinsically motivated, who do things because they're interesting, and that's their main source of fulfillment. It doesn't mean that they don't cash their paychecks, but for them, the bigger motivator is the intrinsic one. I call that type I behavior.

Then there are people who are more extrinsically motivated. They do things to get the reward, the promotion, the prize. Again, that doesn't mean they always hate what they do, but it means the main source of motivation, for them comes from the outside. I call that type X behavior.

Type I behavior responds more to these third-level rewards.

It's pretty clear that type I behavior almost unquestionably leads to greater physical health and subjective satisfaction. It also seems pretty clear that type I behavior is more effective than type X, in terms of performance over the long term

The thing about type X and carrot-and-stick motivators is that they are pretty effective in the short run, which is what so easily misleads us.

Let's say you're running a sales organization and you want people to close a lot of sales by the end of this month. Well, offer them a giant bonus for closing sales at the end of this month! It'll work.

Now, they might end up burning your best customers. They might pull orders from later in the year into this month. They might pull all kinds of shenanigans—but they will get the short-term goal.

Again, I think that leads us astray. We see people respond to short-term rewards and think, "Okay, that's how it works"—even if that behavior is disruptive in the long term.

It strikes me that because of the sheer speed of information these days, and how informed consumers are, that the "long term" probably comes a lot sooner than it used to.

That's probably right. I think that's a very good point.

You said type I is made, not born—it isn't like you inherit these genes. This is a behavioral type, something that can be learned.

I think in some ways, we all start out type I; that's the human condition. Humans, by their nature, are not passive and inert. They want to contribute, to lead meaningful lives. You rarely see a 2-year-old who only cares about external rewards and punishment, or a 3-year-old who is passive, inert and incurious.

Unfortunately, many things can happen in our lives that lead us to unlearn that behavior and become more addicted to external rewards.

If we think the best way to get work out of people is to have them rigidly comply with what the boss wants, and then we model business schools on that precept, then we get a bunch of people who are really good at rigidly giving the boss what he wants—and less good at thinking of solutions and figuring out novel ways to do things.

You talk about autonomy, mastery, and purpose. Can you say a few words about these three as distinct aspects of motivation?

Autonomy is our desire to direct our own lives.

Some jobs require that people do what the boss says, but what we really want in our workplace is engagement: we want people to be engaged in what they're doing. That's how they do great work.

People don't engage by being manager-controlled, they engage by getting there under their own steam. Engagement requires self-direction. In a workplace setting, that means dialing up, at least a little bit, how much autonomy and control people have over what they do when they do it, who they do it with, and how they do it.

When people have a little more autonomy over those elements of their work, they end up doing better work.

And mastery?

Mastery is our desire to get better at things because it's inherently satisfying. There's some interesting research, subsequent to when the book came out, that shows that making progress is the single biggest motivator at work.

When people make progress, they're motivated. Making progress depends on feedback. So when you set up an environment where people are regularly getting feedback on their progress, that can be really enriching and motivating.

It needs to be clear that the starting point for all of this is that you're paying people enough. If you don't pay people enough, if you don't treat them fairly, you're not going to get much motivation.

Once you compensate them adequately, holding out more money—or promotion, plaques or whatever—does not have much effect. It's these other things: sense of self-direction, the ability to make progress and get better at something.

It reminds me of research charting the confluence of income levels and happiness levels that says, yes, more money makes more happiness—to a point. But after $80,000 a year, or whatever the number might be, it doesn't seem to keep increasing; if anything, it decreases.

There's controversy about whether it actually decreases, but you do hit diminishing marginal gains. And I think it's a good analogy. The research shows that the best use of money as a motivator is to pay people enough so they're not thinking about the money. They're thinking about doing good jobs.

In Drive you talk about the Zen of Compensation: "Get money right—and then get it out of the way." In network marketing, I think we see those first three factors play a huge role: autonomy, mastery and purpose. But when it comes to compensation, we have a mixed record. Money still seems to often be an in-your-face kind of issue here.

That's harder to do when your people are largely independent and making their own way, essentially running their own businesses and not being managed or motivated by a boss.

In that kind of environment—in fact, in any type of sales environment—money has multiple functions. It's not only a unit of exchange; for a lot of folks it is also a form of feedback. It gives you a sense of how you're doing.

People often think that salespeople are purely mercenary, when in fact most of them are, like most human beings, feedback freaks.

For a lot of us, the feedback on how we're doing in our work is intermittent, and that can be very disorienting. People who are in sales happen to live in a world that is very rich in feedback—and that feedback comes denominated in dollars.

Interestingly, if you're doing something really well, and doing it with a sense of purpose, and getting better at it each day as a consequence, you're probably also going to do okay professionally.

There's a bit of paradox there. The direct pursuit of this external game isn't necessarily the best way to get it. But the pursuit of serving customers well, of doing something that matters, using your strengths, working autonomously, being honest, delivering on your promises … pursuing those sorts of inherently valuable rewards can have the consequence of leading to a greater extrinsic reward.

Often when we see people who have done especially well in receiving those kinds of extrinsic rewards, we say, "Aha, that must be what they were seeking," when it may actually have simply been a consequence of doing great work.

Do you see the Millennial generation as being in any way distinct, in relation to this paradigm of intrinsic motivation in the workplace?

I'm of two minds on the matter of distinct generational differences.

On the one hand, every incumbent generation views the rising generation as lazy: "They haven't paid their dues, they aren't as serious as we were." That's the nature of incumbency.

On the other hand, while the roots of motivation are very similar for all of us, the expressions above the surface can be different, and I think that's true for the Millennials in relation to mastery and purpose.

For instance, the Millennials are feedback freaks. They live in a world of very rich, robust feedback. When they play a video game, they get a score. When they send a text, a sound goes off to indicate that it went out.

Then they get into the workplace and it's often a feedback desert. They recognize that they can't get better at something unless they get feedback on it—and I think they may be forcing the hand of workplaces to become a little bit more feedback rich.

So in relation to mastery, Millennials are potentially playing a big role.

The same is true, more or less, with purpose. If you look at some of the polling data, the generation of Millennials is extraordinarily purpose-driven, much more so than the baby boomers, whom we mythologize as being "we're out to change the world," when in fact this new generation shows a far greater orientation toward purpose than their parents did.

To what might we ascribe that? Is it just the nature of the environment?

It may have to do in part with their being raised in relative affluence, and some significant number of them feeling like they have a lot of options. Maybe it's seeing their parents dissatisfied with the pursuit of purely external rewards.

It may also have to do with the proliferation of technology and their ability to see globally and hear about problems in the world in a much more direct, frequent, vivid way than our generation ever did.

To what extent do you see the conventional work world catching on to the shift you describe in our motivational environment?

I think there's some real change happening. A lot of companies are doing some very interesting things with regard to our economy.

At Netflix, their vacation policy is that they don't have a vacation policy. People can take as much vacation as they want, when they want it. That's radical autonomy.

The corporate headquarters of Best Buy has what they call a Results Only Work Environment where people don't have schedules. They have to get the work done, but how they do it and when they do it is entirely up to them.

A lot of companies are carving out time for people to do purely autonomous, self-directed work. There's a software company in Australia called Atlassian that does quarterly "FedEx" days (so-called because they have to deliver overnight) where for a day people do whatever they want, as long as it's not part of their regular job, and then twenty-four hours later they show it to the rest of the company in a fun meeting. This has led to a whole array of fixes for existing software programs and ideas for new products.

Google does something called 20 percent time, where people can spend 20 percent time doing what they want, and a lot of Google's innovations have come from there. Intuit does a 10 percent time, and a lot of its innovations are coming from that.

Last year Twitter had Hack Week, where they gave people one week to work on whatever they wanted.

There's an increasing number of companies that are taking a radically different approach to motivation.

And it seems the net gain is an extraordinary unleashing of creativity.

So far, these experiments show that it's all about engagement. People are more likely to engage if you let them engage on their own terms. And human beings don't engage by being controlled.

So if we're seeing a workforce that, on the whole, is gradually being set up to be more motivated by those intrinsic motivators, does it stand to reason that we'll see a workforce that on the whole becomes more productive?

Let's hope so. You're not going to get productive over the long haul through fear and greed. It just isn't sustaining for the really great breakthrough work that we need today.

Fear and greed work very well for certain things. Fear is a great motivator for getting people out of a burning building. It's not a great motivator for coming up with an amazing idea or revolutionary new product.

We all know this! If you ask somebody to think about the best boss they ever had, they don't talk about how awesome it was that this one guy breathed down their neck and told them exactly what to do. When they describe their best boss ever, they talk about someone who offered high standards, a little bit of moral and specific support, and then allowed them to make their own way.

That's how human beings perform at a high level.