Welcome to the Potential Leader Lab and I am your host, Perry Maughmer. And today we're exploring the idea around why your revenue targets are demotivating your team. Now, first things first. All that I do, I approach through my E three framework and that means we leverage, exploring, experimenting, and evolving as our means of navigating our leadership odyssey. Now, I also define leadership as having a positive impact on the lives of those we care about. And with this definition, every single one of us has both the opportunity and responsibility to lead in whatever part of the world it makes the most sense for us to do. So my belief is if we all individually take these opportunities, we can collectively make the world a better place. And I think that's a pretty cool thing. All right. So to kick off our ideas around revenue targets and why they're demotivating to your team, I'll give you three quotes. The first one is Bob Dylan. All the money you made will never buy back your soul. Kahlil Gibran. Money is like love. It kills slowly and painfully. The one who withholds it and enlivens the others. Who turns it on his fellow man. And then finally, I love this one from Ayn Rand. Money is only a tool. It will take you wherever you wish, but it will never replace you as the driver. All right, So let's explore some ideas, some concepts. And then after that, we'll talk about some things we can experiment with.
00:01:25
The first one is is really kind of interesting from a motivational standpoint and why folks are not excited by company revenue targets. Financial results are an outcome. They're not a root driver for employee performance. I mean, would you be excited if your boss started a meeting saying, I want to remind you that you're a cog in a machine whose primary purpose is to hit our financial targets? And that's really what most people hear, because unless you're the owner of the organization and I would I'll even argue that the owner doesn't get excited by the revenue target, but unless you're the owner, what do you think everybody else thinks when you put if you stand up in front and you're the leader and say, this year we want to make $150 Million. I mean, what does that even mean to anybody that's sitting in the room? I would argue that most of them think, well, what part of that am I getting? Like, why am I only making X if you're getting 150 million? Right. So we have to remember that it's all about how people perceive that message. Now, according to a recent Gallup poll, these are the top three factors that employees consider most important when deciding whether or not to take a job with a different organization. 64% say a significant increase in income or benefits is very important. And that's all a function of the market because it's a it's an employee's market right now. 61% say a greater work life balance and better personal well-being.
00:02:47
58% say the ability to do what they do best. So granted, 64% said an increase in income or benefits, but that's largely due to the environment. 61% said greater work, life balance and well-being, and 58% said the ability to do what they do best. Now I'm going to reference Daniel Pink's book Drive because he did a lot of research and they came up with the three following things as motivators. Autonomy, mastery and purpose. Now, his argument in his research showed that actually money is a motivator in certain situations. And it's it's a really easy jump to make. The reality, according to Daniel Pink, is money is a motivator. If I control all aspects of what I'm of my production, like if I'm paid to make widgets and I can theoretically make as many widgets as I want during the course of the day and I control all the aspects of making the widget, then money can actually motivate me. So if I'm paid by widget and I have an unlimited supply of widget material and I have all the things I need to make the widgets, and it's simply a matter of how many I want to make. Money can actually be a motivator, but in any other situation where you don't have complete ownership and control of the process, which in today's world is very hard for anybody to do, that you that you can make the whole thing, offer the service, whatever it is, within your control.
00:04:14
You don't need anybody else in the organization to help you. The argument is, if that's the case, money is actually a motivator. And what he says are the motivators are three things. Autonomy, mastery and purpose. Right. Autonomy is we do best in creative non rules based tasks when we have the autonomy of what, how, when and with who we do the work we love doing. Now, remember back to 58% of those people want the ability to do what they do best, right? So think about what you said about autonomy. When we have the autonomy, we can make certain choices at certain levels. About what how, who and with whom we do the work that we like to do. The second thing is mastery. All right. So mastery is the ability to get better at what we do. We never really motivate it. The most successful people are motivated by getting better, pushing the limits of who they can be. Back to your 58% one. The ability to do what they do best and what he says is autonomy. It gives us the autonomy to do that. And then we want the ability to get better. So if we spend the greater majority of our time doing our work, most likely we're going to get better. And people want to be good at what they do. And finally, purpose. We by nature as humans, seek purpose and meaning in what we do. And when we align that purpose, we ignite full potential.
00:05:37
If we're working somewhere where we believe we're part of something bigger than ourselves. If we believe that the the reason that we're here is to achieve something we couldn't achieve alone. And I feel like I'm part of something that's really meaningful and motivating. Again, autonomy, autonomy, mastery, purpose. I want to I want some say over what? Who, when and with who I work. I want the ability to get better at what I do, and I want to feel like I'm connected to something bigger than myself. And by the way, none of those things talk about revenue. I DON'trillionEALLY care what the revenue goal is. What I care about is my autonomy, my mastery, and my purpose. There's also an interesting concept called subrogation. Now here's what it means and here's why we go back to it has a really direct impact on on using revenue as a motivator. It turns out that tendency to mentally replace strategy with metrics is how we refer to subrogation, right? So what happens is so just think about I'll give you an example. It can actually not only is it is it not helpful, it can actually destroy company value. So here's a common scenario. A company decides they're going to use, delighting the customer as a strategic objective and decides to track the progress using a customer service score. The surveys do tell managers something about how well the firm is pleasing customers. But somehow employees start thinking the strategy is to maximise survey scores rather than to deliver a great customer experience.
00:07:08
So again, I've shifted. It's the surrogate part of this is it's I'm replacing the strategy with a metric. So in my organization I've decided I'm going to we're going to measure customer service scores. What happens inadvertently or on purpose is that the people in the organization start creating strategies to maximize those scores, not deliver the customer experience that we want. Happens all the time. Like you can have a revenue target and people do things to drive revenue. I mean, I've seen compensation plans where people I actually I we have to be really careful. I actually consulted with a company one time. Where they had created a compensation package with a bonus structure and the person that was it was an outside sales person, and they actually figured out that they could make a bunch more money by upselling their current customers. So this person was calling their current customers, telling them that they needed to change from this service to X service to Y service. And they were they didn't need to, but it was maximizing this person's bonus potential. So they were actually cutting down the current customers and they weren't getting any new customers. They were just trying to get the current customers to sign a new contract. Not very good for the company, but really lucrative for them. But if you think about this, I'm sure most of you have seen this happen. Time and time again we come out with a strategy.
00:08:38
So theoretically, again, improve customer service. Well, how are we going to track that? We're going to do customer surveys so we have a metric. The metric is the customer survey result. Well, now SURROGATION is the metric becomes the strategy. If I work there and I know that my that I'm going to get I'm going to get evaluated on how well my customer surveys go, then I'm going to create strategy to maximize my customer survey results. And I'm not focusing on delivering the experience that everybody wants to deliver. So just be aware of segregation and don't allow that to happen in the organization. Right? So you just want to figure out what metrics am I, am I going to use? And I don't want that metric to become the strategy. Now here we're going to shift into experimenting. All right. So here are some ideas. Here's here's how it works. Here's how it should work. So I want you to think about this flow. Your language as a leader creates the team's belief in mindset. Language creates mindset. The mindset drives behavior. Behavior produces results. All right. So again, language creates mindset and belief. Mindset and belief drives behaviors with customers and the folks inside the organization. Customers inside and out. And that that produces the financial results. The financial results are a result of all these other things, right? The first thing you have to concentrate on is what language am I using now to think about this? Leaders You want to aim for about a 50/50 split.
00:10:07
You want to spend at least half your time building belief in the meaning and external impact of the work and then half on the internal metrics and deliverables. I don't want to spend 80% of my time talking about the internal metrics and deliverables and then less than 20% of my time talking about the impact of our work outside. You want that 5050 split with your air time. You want to give both of those equal credence in the organization because we go back to purpose, right? People want to believe they're part of something bigger. That doesn't mean they want to see. They just want to talk about how much revenue we're making. When you do talk about the customers, talk about them with emotion and specificity, right. The more clearly an employee understands their direct impact, the more likely they'll go the extra mile. When they also experience greater fulfillment as well. So don't just talk in generalities around the customer experiences. Talk about how it makes your customers, your clients feel, and be specific with examples because that's going to reconnect your employees motivation. The revenue is not I mean, I've had a ton of meetings with people and I've asked them. Does it matter to you if you hit your revenue goal? And really the only time they say yes is when it impacts their bonus. They don't have any direct connection. Finally, as a leader, you should also stop.
00:11:29
Resist the dreaded FYI, which is when you send your team all the information filled with financial targets and employees are often left with their own devices to figure out how that translates to broader financial goals and then into their daily behavior. It's confusing at best. Demoralizing at worst. Is think about your organization. Even if you have a relatively small organization, say your say your goals $14 Million and you have 50 employees, you have 5075 employees, and you're telling people routinely, Hey, our goal is $14 Million, We're on track to do, you know, 13.5. Let's really push. How is that motivating? Why? Why would you imagine it's motivating? First and foremost, it's probably a completely arbitrary goal, like you just came up with it. You did a 5% increase over last year. There's sometimes there's little to no justification as to why that's even a goal, number one. And then number two is why would that why in God's name would that motivate anybody that works in the organization that's actually doing the work that generates the revenue? Why would that make them work harder? There's nothing in it for them. And I don't mean that in a negative way. I mean truly, there's nothing in it for them because most of them are getting paid the same, whether that target gets hit or not. Now, if you want to if you want to go down the road of well, if we don't hit the target, we got to lay people off, that's bullshit and you know it, right? So don't don't just approach this like a human.
00:13:00
Like, think about this from human terms. Think about what would really make someone want to be motivated. Now, we could actually go in. I mean, we could really dig into this because the reality is motivation. Is caused by dopamine. If you really want to dig in and you really want to get serious about motivation, you have to understand motivation is always internal. It's created in our bodies by the neurochemical dopamine. Dopamine is tied to motivation. If you as a leader want people to be motivated, then you have to create an environment that's going to lead to dopamine being released. All kinds of studies out there that show you what kind of environment that is. But that's all you can do. You cannot motivate somebody. You can create an environment where people could be motivated. But you cannot motivate people with revenue goals. Just doesn't happen. But again, you can certainly create environments where dopamine is going to be released. And you can go look where that is, because there's all kinds of studies that show you how to do that. But if we get down to it, it's really there's a there's a paradox involved here, which is we spend so much time talking about motivational techniques, thinking that we're somehow going to be able to find the. The the silver bullet that creates motivation for everybody. And that's a fallacy, because motivation is is created through dopamine production.
00:14:46
That's when we feel motivated. We don't think our way into motivation. We feel motivated. So you can give somebody all the perks you want, but it has to create a feeling in them of motivation, because intellectually we don't do that. We don't get motivated intellectually. And if we do try to convince ourselves that we are, it doesn't last very long because you're going to ask people to do some hard work, which is fine, but that's when we need that motivation, because they're willing at that point to give discretionary effort. Which is above and beyond what they need to keep their job. Now, I would consider the following questions as well and share the answers instead of the metrics. Here's the process I would use. When you think about a revenue target, why do you want to earn that revenue? What does that revenue represent? That's what's important. That's what gets to back to Daniel Pink's purpose. Autonomy. Mastery. Purpose. If you figure out what that revenue represents for you as a leader in the organization and talk about that, that might very well be something that motivates people and connects them to purpose. But you have to figure that out for yourself. This is the cognitive heavy lifting you have to do. You have to sit and think about these things and think about, okay, I want 15 million in revenue. Why do I want that? What's it going to do for the organization? What are we going to do with? In the second question is what will you do with that amount of profit? That could really motivate people to that could create an environment where they're more bought in.
00:16:21
Because if you're saying we're reinvesting in more employees, we're reinvesting in new locations, we're investing in training and development or equipment. What are we going to do with the money we make? Close the loop for them. Make sure that make sure they understand how business works. But you want to think about what are we going to why is that revenue important? And you could always use the five whys. If you think to yourself, the theory is that by the time you get to the fifth Y, you've got the root cause. That means if I want to do 15 million, I'd have to ask myself why five times? And eventually I'll get down. I'll drill into it, but spend some quiet time with yourself and figure out why is that revenue important? What's it do for us? And if you can't answer the question, you should be able to. So it's a good exercise regardless. Even if you don't share it with anybody, it'd be good for you to know because my I have the opinion that most leaders money doesn't motivate them either. It. Money represents something. It represents something different to different people. But you have to figure out what it represents for you. What does it provide you? An opportunity? What does it afford you the opportunity to do? That becomes something that is intrinsically motivating.
00:17:32
Once you figure that out. And then finally, what do those numbers on a page represent in making a difference in your business, your client's lives, your own life, and in society in general? How are how are you making a difference through the service or product that you sell or through reinvesting, whatever those things are? Again, make it about those things. Make it about the self transcendence. What are we how are we moving beyond ourselves? Because people want purpose. They want to belong to something bigger than themselves. They don't want their job just to represent a paycheck. They want to make a difference. I think everybody at the end of it, all the humans, we all just want that. We want to know that we mattered. We want to participate in something that matters. I don't think that's too much to ask. And here's the thing. And I want you guys to understand this. I'm asking you to do something that's it's a heavy lift. But my argument is it's already there. Really? You know what? This is already you know this as a leader in the organization. It's sitting in there. You just have to be quiet and still and allow it to come out. Allow all the other societal bullshit to fade away, the profitability, the maximization of resources, the efficiency, the effectiveness, all that stuff. And think about why am I doing this? Why is it matter to me? Come up with that answer and then figure out how to share that with the people that work with you.
00:19:03
That's going to be much more meaningful to them than a revenue goal. And we talk revenue all the time and it just doesn't matter because revenue is something that ensues from the pursuit of something else. I mean, if you want to break this down easily, leaders take care of everybody else in the organization and they'll take care of the client. They'll take care of the person. That's that's a simple if a leader's focus is almost entirely on who's inside the organization and taking care of them, they will take care of the client and revenue will happen. When we shift that focus to revenue, when everybody gets revenue focused. That revenue driven organization. Then everything else falls off to the side again. We have to be careful what we think about because what we think about is what materializes. And if all we think about is how do we get revenue, then we're going to miss a bunch of other stuff that we shouldn't be missing. Because it isn't all about revenue. Revenue ensues. It shouldn't be something we pursue. It's like happiness. Happiness ensues from the pursuit of something else. Happiness is not something that you pursue. The more you pursue it, the less likely you'll get it. The more you pursue revenue, the less likely you'll get it. Pursue the things that lead to revenue. What Figure out for yourself what revenue ensues from in your organization.
00:20:27
And then focus on that. Talk about that all the time. Because of more more energy is focused on that. The revenue will happen. All right. So I'll close this out with three quotes. The first one is from Jean-Jacques Rousseau. The money you have gives you freedom. The money you pursue enslaves you. And then we'll go to Benjamin Franklin. So we're actually going in kind of historical order. Benjamin Franklin Money never made a happy. I'm sorry, let me start over. Money never made a man happy yet, nor will it. There is nothing in its nature to produce happiness. The more a man has, the more he wants. Instead of filling a vacuum, it makes one. And then finally, Henry Ford, which you wouldn't imagine he would say something negative about money, but here it is. If money is your hope for independence, you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience and ability. So remember, all can. Most won't, and few do. My only question to you is, will you be one of those relentless few who explore, experiment and evolve so that you may have a positive impact on the world of those you care about? If the answer is yes, then you're already leading. And I thank you because the world needs what you have to offer and we need it now. Take care of yourself and take care of each other. And I hope to see you back in the lab soon.
