The broad stock market is down over 50% year-to-date and the economy is weak and getting weaker. We’ve been on the right side of the Trend, but still have friends, family, and clients who have lost a good deal of their personal net worth this year and that can be depressing. Years like this, though, teach us important lessons about personal motivation and happiness. The bottom line, it is not all about money.
Keith and I had been talking about the idea of the company that is now Research Edge well over a year ago. I ultimately opted to not join him from the outset because the risk of the unknown scared me. As did the idea of leaving a good salary and job in a great city, Miami, but as the year wore on and on I realized that I wasn’t happy. I really enjoy investment research, but my motivation for staying in the job I was in was purely money and social prestige, i.e. it was a good firm, rather than any sense of passion.
I had been mulling over leaving for months, for a number of personal and professional reasons, and the inability to make a decision was making me personally unhappy and closed off. And then on September 16th Keith’s Early Look note hit my inbox and the following quote screamed at me:
“So, let's start this morning by getting things right. If your boss or bank has zero credibility - leave. Go somewhere where you can rebuild the wealth that they took from you. Take control of your own destiny. Otherwise, the principles of transparency, accountability, and trust are nothing but words we are giving lip service to . . .”
Now we should get a few things straight, Keith and have I known each other for 15+ years, played hockey together, worked together, I was in his wedding, he will be in mine (if that day ever comes!), so I certainly don’t always take the man all that seriously. But that quote was a catalyst for me. I decided I was quitting and started an intensive interview process with Keith and the rest of the team at Research Edge and two weeks later I was up and running in New Haven.
So Daryl . . . what is your point? Good question. Simply that we need to put ourselves in positions that maximize our happiness and focus on goals along that path. When I read Keith’s quote, the clarity dawned on me. I’m not the most successful guy in the world, but I’ve come a long way from what are fairly humble roots and any success I’ve ever had was based on my being passionate about something. In hindsight, it is now laughable to think that either a generous paycheck or a “good” firm were adequate motivators for me. In fact, they both detracted from my happiness and my motivation. My motivation has always been about being part of a successful team, improving every day, and enabling people around me to be successful. In my new role, I have all of that and I am confident that monetary success will follow.
Finding satisfaction in our careers and creating a satisfying workplace for employees is critical to living and enabling others to live happy lives at work. Psychologist Frederick Herzberg developed a model that framed up the foundation for a rewarding career. His Two Factor Theory (also known as Herzberg’s Motivation Hygiene Theory) was based on interviews with 200+ accountants and engineers in the Pittsburgh area. The gist of the interview analysis was that Herzberg asked the respondents to relate times when they felt exceptionally good or bad about a current or previous job.
The results were interesting and somewhat nuanced. The Two Factor Theory distinguished between motivators and hygiene factors. Motivators are attributes of the job that provide positive satisfaction and arise from achievement, recognition, and personal growth. Hygiene factors, on the other hand, do not give satisfaction, although dissatisfactions results from their absence. These factors include such things as benefits, salary, job security, and a comfortable work environment.
Herzberg theorizes, based on his study, that hygiene factors are required to make sure an employee is not dissatisfied, but they do not necessarily promote satisfaction. Motivators, on the other hand, drive satisfaction and happiness beyond the basic level of hygiene (i.e. that it is a palatable job). Herzberg also classified actions in the workplace as either movements, you perform an action because you have to, or motivations, you perform an action because you want to perform the action. In this context, the goal of any employer should be to create a highly “motivated” workplace in which employees perform actions on their own volition.
To be fair, there are many criticisms of Herzberg theories and many of them focus on the simplicity of the model. Intuitively, though, I think we can all agree a workplace and job must satisfy basic requirements or we will be dissatisfied, and unhappy. On the other hand, for a job to be truly satisfying and rewarding it does require more. I outlined my key attributes for a satisfying work environment above and my requirements are not atypical.
Motivating our employees and ourselves is critical to the success of any company. Motivated employees will do a better job, will produce higher quality work, and are typically more productive. In knowledge based industries, the productivity of employees is critical and will reflect directly on the bottom line.
While money is many times seen as the key motivator for employees, especially in the finance industry, money is actually a relatively low level motivator. In fact, it is more supportive of hygienic needs, so staving off dissatisfaction, rather than promoting satisfaction. As Abraham Maslow suggests in his “Theory of Motivation”, money “tends to have a motivating impact on staff that lasts only a short period of time.”
Abraham Maslow wrote his paper “A Theory of Human Motivation” in 1943 and many of its key points are still incredibly relevant today. Maslow studied what he termed exemplary people, which included Frederick Douglass, Eleanor Roosevelt, Albert Einstein, and more broadly the top 1% of students in certain colleges. Based on these studies he created a hierarchy of needs and as humans moved up the hierarchy the more satisfied and, thus, motivated they become.
As employers and employees we need to focus on the fourth level of Maslow’s hierarchy of needs. This is the esteem level and has as its requirements: self esteem, confidence, achievement, respect of others, and respect by others. We need to both put ourselves in an environment where we can fulfill these needs and create environments so that those that work for us can fulfill these needs. The point of fulfilling the fourth level of esteem is to reach the self-actualization stage - the stage in which we motivate ourselves. Maslow summed up motivation and the idea of being personally content best himself when he said:
“Musicians must make music, artists must paint, poets must write if they are to be ultimately at peace with themselves. What human beings can be, they must be. They must be true to their own nature. This need we may call self-actualization.”
I couldn’t agree more.