The Journal The Authority on Global Business in Japan

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MARCH 2015

I Can’t Get No Satisfaction: Motivating Knowledge Workers

By Jeremy Sanderson

CEO, Icon Partners K.K.

Many years ago, I worked in England. In a factory there, I made roller bearings. We had a quota per shift, quality parameters, and a production-linked bonus system. I thus knew exactly how much extra I could earn by producing a given quantity of bearings.

As a 17-year-old machinist, this system of incentives was fair, and mildly motivating. I can’t say that it induced me to improve myself, to rush out and start my own bearings factory, or to go back to school and do an MBA. But it did encourage me to produce more than my quota of bearings per shift, which was precisely what the system was intended to do.

Leaping forward 21 years to the year 2000, I was the proud holder of a Bachelor’s Degree in Japanese, working as an account executive at an advertising company in Tokyo. It was a typical, overnight success dot-com company, which suffered an equally rapid demise after the bursting of the dot-com bubble in 2001.

Looking back, it strikes me that the system of rewards there was almost identical to that at the factory where I had worked in 1979. Yet, it was a far less effective means of motivation.

This personal anecdote highlights the dissonance in the rewards systems of many companies today. In the factory that employed me, we manual workers were rewarded according to a 19th-century model of input, output, bonus. My factory workmates and I were happy with this in 1979, because we generally aspired to little more than a big night at the pub every Friday, preceded by 40 hours of hard work.

As blue-collar workers, study was something that ended when we left school. After that, it was all about manual skills and repetition. As a knowledge worker in 21st-century Tokyo, however, I needed a little more.

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American management consultant, educator, and author Peter Drucker (1909–2005) coined the term “knowledge worker” in his 1959 book, The Landmarks of Tomorrow. He considered knowledge worker productivity to be the next frontier of management. A remarkably prescient view, it is still relevant today.

Knowledge workers make up the majority of employees in post-industrial societies, and yet still are, for the most part, assessed and rewarded according to the 19th-century industrial productivity paradigm. The economic impact of knowledge work is undeniable. The output of a blue-collar worker is limited by time and physical resources, whereas that of a knowledge worker is potentially infinitely scalable.

However, as knowledge is dynamic by nature, knowledge workers constantly need opportunities for growth and learning to remain competitive and stand a chance of advancement. In their world, the promise of learning has replaced the promise of lifetime employment as the chief motivator. Incremental financial rewards linked to units of economic output don’t really hit the spot any more; the feeling of being on a high weakens with repetition.

For companies to attract and retain the best thinkers today, they need to find ways to stimulate such employees emotionally and cerebrally, not just financially. Moreover, it’s not just Generation X and Millennials who need these things; it’s baby boomers, too.

They all need a compelling mission to undertake, inspirational corporate values sincerely implemented, opportunities for lifelong learning, and a performance assessment methodology capable of evaluating results generated from intellectual contribution—which is essential, but frequently overlooked—not simply units produced per hours worked.

In his opus magnificum entitled Good to Great (2001), Jim Collins—American business consultant, author, and lecturer—famously recommends getting “the right people on the bus (and the wrong people off the bus)” for corporate success. The best clues as to what to do with them once they are on the bus, though, come from the writings of Drucker four decades earlier.

Makes one think, doesn’t it?

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Companies . . . need to find ways to stimulate [the best thinkers] emotionally and cerebrally, not just financially.