How to build a business – Why

Today I had a meeting with Leon and Ruben, two KPMG auditors. Our company is nominated for the Annual FD Gazelle Awards, for the fastest growing companies. A company may call themselves FD Gazelle if over the previous three years the annual revenue growth has been more than twenty percent. Nominees should be profitable companies, and a  jury also evaluates the participating companies. The Financieële Dagblad (the leading financial newspaper in The Netherlands) is the initiator and organizer of the FD Gazelle Award, and some other companies, such as Graydon, KPMG and ABN Bank are sponsors and play a role in the selection process.

If you have an appointment with auditors, you expect them to audit your consolidated annual reports, but – pleasant surprise – we had a much more interesting conversation. A believer in structure and preparation I had not only e-mailed our audited annual reports of the previous years, but also printed them off, ready for all difficult questions. Admittedly I might even have been eager to explain that we grew seventy-three percent in 2009 and eighty percent in 2010, or in total two hundred and thirteen percent over the past two years compared to 2008. They never even looked at the reports. Not in the office, and not during our meeting. They had prepared themselves by looking at our website, my LinkedIn profile, and by reading this blog. This had answered most of the questions they had, like what we do, how we had grown, how we are organized, and whether or not we had a social media strategy. The questions they wanted answers to where “Why have you been able to grow”, “Why did you start this company” and “Why do people want to work with you”.

By sheer coincidence yesterday the Belgium channel Canvas showed the three favourite TED conference talks of Clo Willearts. Clo Willaerts combines two jobs: she manages a team of site managers and webmasters for Sanoma websites like libelle, flair and zappybaby. Besides that, she monitors the online market trends, with a special interest for the wilder digital life forms, like social networks, user generated content, viral marketing, and social media in general. One of her choices was a presentation by Daniel Pink, called the surprising science of motivation.

Unfortunately Leon and Ruben did not watch Dan Pink last night. I did though and Dan Pink explained exactly Why we do what we do. I must have stumbled upon some of his ideas at some point, because without realizing that he ideas were his, I have borrowed a few words from him. Sorry Dan. I am sure he doesn’t mind, because Dan likes to share. TED’s pay-off is “Ideas worth sharing”, so surely Dan wants to be heard. Besides, he is trained as a lawyer, and American, so if he did he would have sued a while ago.

Let me explain:

Dan Pink has studied the motivation of people, and where most companies work according to the carrot and the stick principles of reward and punishment, research by all the major institutions like MIT, London School of Economics and Cambridge shows that financial incentives do not work, unless the tasks at hand are purely mechanical. For anything above rudimentary cognitive skills, larger rewards lead to poorer performance. Intrinsic motivators are much stronger than money as a motivator, especially where conceptual creative skills are at work.

The elements that play a major role in this intrinsic motivation are:

Autonomy, Mastery and Purpose, according to Pink. Autonomy is the urge to direct our own lives. Mastery is the desire to get better and better at things that matter. This is the same motivation that make people play musical instruments, to spend hours and hours at Wikepedia or at developing open source software. Purpose is the yearning to do what we do in the service of something that is larger than ourselves.

Now look at this overview that we made a few years ago, and that is supposed to graphically represent why we do the things we do, and how we do them what that means in terms of external communication. This graphic originally also showed what that means for the people we work with or work for (which we all call Qhubans), but I better leave that part for another time.

Why - How - What

The quest for Autonomy is on the one hand the most logical motivation for anyone who quits his job and starts a business, because he wants to take matters in his own hand, wants control over his own live and destiny, and thinks he can do better than he could as an employee. But to me Autonomy is not necessarily a choice for freedom or individuality. It is the way someone looks at the world, and analyses, interprets and thinks. It is typical for people who are honest to themselves and other about their motives and motivation and means that people are self-directive, can set their own goals and the way they will reach them. Autonomous people will take responsibility for their own lives, their own success and their own failures. We have had the discussion on whether Autonomy as a motivator and a Network company structure are a logical combination, and I think they are. It do not see a contradiction between Autonomy and Unity. Between Autonomy and Uniformity, definitely. That is why we associate Autonomy with Unconventional as a characteristic, and with the Best People as our What.

Mastery is also interesting. To us it does not mean that someone has to be he ultimate experts in all fields. It means that all of us want to learn and improve. Not to have all the answers, but to find them. Once you think you are the expert with all the answers you become a one-trick pony, whose trick it is to give those answers. Challenging your past experiences and looking for new answers is much more fun. That is why we associate Mastery with reliability. Reliable in admitting that we do not have all the answers and will never again pretend to be what we are not. But also reliable in using Practical Knowledge to find smart solutions, the same way people want to solve a Sudoku puzzle, train for a judo black belt or play Angry Birds.

Then maybe with Relevance we mean roughly the same as Pink had in mind when introducing Purpose as a motivator. No compromises. It is important and we are dying to do it, or we should not do it. If screwing up means that the lights are going out in Amsterdam, that is a different motivator than if a shareholder has one percent more revenue from his investments. We want to make a contribution, and preferably a real one. The type of contribution that you cannot wait to share with your colleagues, he kind that constitute corporate success.

And – maybe more than anything else we do not want to do it alone, we want to work with peers, people that we respect, that respect us, that we can learn from, learn with, share with. You see it everywhere, and it is an extremely strong motivator. The Sudoku guys, the judo guys, the gamers. They all want to do it together. They find their peers, their leaders, their tribe.

Carrots and stick are for rabbits and dogs. Financial reward and hierarchical punishment are for conveyor belt companies – or for the Army.

We have another drive, and that’s Why we do What we do (and why we called Qhuba Qhuba – which means Drive). And if auditors recognize this, we and they are doing something right.

Talking about drive, you might want to have look at this animation, based on Dan Pink’s ideas.

2 Responses to How to build a business – Why

  1. […] how to operate as network companies in a networked […]

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