Humanising Organisations
People are not extrinsically motivated automatons
“When economists talked about human behaviour as part of their theories, they postulated a mythical creature, homo economicus: a perfectly rational person who always operated from self-interest, with clearly defined reasons for every action and decision. Economic theory could thus encompass sophisticated formulas to describe complex, large-scale, aggregated activities, which could then be translated into ‘managerial science’. But the formulas said very little about the actual behaviour of homo sapiens — which is immeasurable, unpredictable, unfathomable and deeply ambiguous. Even a 19-year-old student like me could tell, from my part time job at a Shell refinery, that, whereas the management curriculum had no place for human beings, the workplace was full of them.” — Arie de Geus 1
The late Arie de Geus, my former colleague on the Board of the Society for Organisational Learning (SoL) UK, came to the above conclusion that people aren’t extrinsically motivated, merely money-focused automatons, way back in 1950.
Ten years later, Douglas McGregor presented similar views in his seminal work The Human Side of Enterprise.
It was McGregor who coined the term “Theory X” for the prevailing perspective that employees need to be badgered, bribed, and bullied into fulfilling their duties:
“Theory X leads naturally to an emphasis on the tactics of control — to procedures and techniques for telling people what to do, for determining whether they are doing it, and for administering rewards and punishments. Since an underlying assumption is that people must be made to do what is necessary for the success of the enterprise, attention is naturally directed to the techniques of direction and control.” 2
In contrast, McGregor’s alternative “Theory Y” proposed that people have the potential to be intrinsically motivated in their work, seek responsibility, and exercise initiative and ingenuity in creating organisational value:
“Theory Y, on the other hand, leads to a preoccupation with the nature of relationships, with the creation of an environment which will encourage commitment to organisational objectives and which will provide opportunities for the maximum exercise of initiative, ingenuity, and self-direction in achieving them.” 3
By the late 1970’s, Richard Ryan and Edward Deci of the University of Rochester had started investigating the conditions under which people operate in line with Theory Y, as opposed to Theory X, laying the foundations for Self Determination Theory (SDT).
Ryan described SDT as follows:
“We're interested in what we would call high-quality motivation, when people can be wholeheartedly engaged in something and really can have both their best experience and their best performance.
We've always been interested in factors that facilitate or undermine that motivation, and in investigating that, we came on the idea that there are some really basic psychological needs that everybody has, whether they're in the classroom, workplace, or sports field, that help them thrive and have their highest quality motivation.
Those basic psychological needs are autonomy, competence, and relatedness.
That's the theory in a nutshell.” 4
The power of autonomy, competence, and relatedness was highly evident to me in the early years of my career working with innovative, high-tech organisations, helping create conditions where people with different specialisms, strengths, and skills came together to co-create continuous new value.5
In an increasingly fast paced, uncertain and unpredictable world, many more organisations — not just in high-tech — now need to be more humanising and conducive to intrinsic motivation.
This involves creating conditions where sense making, decision making & action taking are ever more tightly coupled, rapidly and repeatedly iterated, deeply embedded, and widely distributed throughout the organisation — in other words a future-fit culture.
Future-Fit Culture
How do autonomy, competence and relatedness come alive in a future-fit culture, creating humanising organisations that stop treating people like extrinsically motivated automatons..?
Autonomy is experienced when people feel appropriately and adequately involved in sense making and decision making so that their action taking makes good sense to them.
Competence is experienced when people feel effective in action taking, in how they contribute to sense making and decision making, and co-create value that exceeds just the sum of individual contributions.
Relatedness is experienced when people feel mutual understanding, respect and camaraderie with colleagues, through the collective sense making, decision making, and action taking that combines their inevitably incomplete and biased — but importantly diverse, mutually error-correcting, and value-enhancing individual perspectives.6
Every organisation is unique, and creates its own characteristic culture that either supports or stifles autonomy, competence and relatedness.
How can you ensure humanisation in your organisation to enable and encourage its characteristically unique future-fit culture to emerge?
The starting point is recognising that despite 40 years of deeply misguided management mythology, organisational culture is not created by defining and dictating a set of shared values.7
An organisation’s culture is created and communicated by the signals, signs, clues, and cues people pick up through seven channels, as was clarified more than 25 years ago by my former colleague Joan Lancourt and fellow researchers at MIT Sloan:8
Persuasive communication. Where “a communicator attempts to introduce a change in the belief, attitude, or behaviour of others via messages that recipients receive with a degree of free choice”.
Participation. “Involvement in defining and shaping the future, allowing for the generation of good ideas and encouraging support and commitment for implementation”.
Role modelling. The “observation of social cues that people are often unaware of observing” in the attitudes and behaviours of influential individuals.
Expectancy. The most subtle channel, “often referred to as the inducement of self-fulfilling prophecies, in which expected behaviour becomes a reality”.
Structural Rearrangement. This includes various forms of “altering work design, organisational structure, or core processes” — e.g. restructuring, reorganisation, changes to written rules, processes, procedures, policies, etc.
Extrinsic Rewards. Money, promotions, etc. “based on the assumption that the behaviour will not be maintained without extrinsic reinforcement”.
Coercion. Any practice “based on the assumption that people will comply because they see themselves as unable to leave the field in which the power is applied”.
It’s important to note the following ways in which the seven channels create and communicate organisational culture:
All seven channels are actively sending signals all the time.9
Signals in different channels are often misaligned or in direct conflict.10
Senior executives are not always the most significant signal senders.11
Influential individuals are often unaware of subtle ways they influence others.12
Three of the seven channels tend to be overused.13
Three of the seven channels tend to be underused.14
The remaining two channels tend to be misused.15
In a 35-year career helping clients throughout Europe, Asia and the US create future-fit cultures of innovation, agility, and adaptiveness, I've seen that the key to humanising organisations and cultivating future-fitness is that signals in the seven channels mutually encourage widespread adoption of 2D3D mindsets — as described in this 6 minute video.
The video addresses why traditional organisational attitudes impede autonomy, competence & relatedness, leading to misunderstandings, misalignments, mistakes, missed opportunities, friction & inertia, causing organisational dehumanisation and decline.
It explains how organisations humanise by cultivating 2D3D mindsets that support autonomy, competence & relatedness and the spirit of cooperation & collaboration instead, leading to new insights, ideas, experiments and initiatives and building an adaptive, agile, resourceful organisation to continuously create significant new societal value.16
Questions for reflection
To what degree does your organisation still treat human beings as the mythical creature homo economicus?
Is Theory X still more evident than Theory Y in how the organisation actually behaves — irrespective of the PR spin in any mission, vision, values, or purpose statements?
How well do the signals people are actually receiving through the seven channels support and sustain the three essential elements of intrinsic motivation — autonomy, competence, and relatedness?
Which main misalignments in the signals people are picking up via the seven channels are most inimical to humanising the organisation?
Arie de Geus The Living Company p101 (1997) Review on Goodreads.
The Human Side of Enterprise p132 (1960). Review on Goodreads.
Ibid (McGregor) p132.
From 1983 to 1995 I worked with one of the world’s leading open innovation labs, Cambridge Consultants Ltd (CCL) applying what I’d learned with client organisations. Then from 1995 following the acquisition by CCL’s parent company Arthur D Little (ADL) of Peter Senge’s organisational learning consulting firm Innovation Associates (IA) I worked with the joint ADL + IA team until 2001. Since 2001 I’ve been in private practice continuing my 35-year career helping client organisations create future-fit cultures of innovation, agility, and adaptiveness.
Many people are familiar with the popular book ‘Drive’ by Dan Pink which retained Ryan & Deci’s Autonomy, changed Competence to Mastery (near enough the same) but changed Relatedness to Purpose. Unfortunately, Purpose can be highly individualistic and risks overlooking the vital value of “none of us is as smart as all of us” captured in Ryan & Deci’s research.
For more on why shared values undermines the creation of a future-fit culture, see this earlier article on the toxic myth of culture as shared values.
For more on this topic see this previous article on the seven channels of culture.
Even when no-one is paying attention to what they’re sending via the channels, the signals still affect those receiving them.
For example we say (Channel 1: Persuasive Communication) we want teamwork, but we decide pay and bonuses based on individual “performance metrics” (Channel 6: Extrinsic Rewards)…
People see who gets rewarded and who gets penalised when choosing their role models. See also this 7 minute video on identifying key influencers — who are not always in the most senior positions.
Channel 4: Expectancy is typically overlooked due to unawareness and inattention.
Channels 5, 6, and 7 get overused, with Channel 6: Extrinsic Rewards directly driven by the assumption that the organisation is filled not with human beings but with the mythical homo economicus.
Channels 3, and 4 tend to get underused because, for example: the real role models aren’t apparent; subtle attitudes differ from (and are overlooked compared to) explicit signals…
Channels 1 and 2 are often misused, delivering confusing or unconvincing messages — for example people: read between the lines when interpreting “official communications”; experience their “participation” as tokenistic, etc.