Selling Power Magazine Article

No Commissions? Are You Crazy?
Malcolm Fleschner
In a recent book, Drive: The Surprising Truth About What Motivates Us (Riverhead Hardcover, 2009), best-selling author Daniel H. Pink describes a groundbreaking experiment conducted in the 1930s by psychologist Karl Duncker. The results of that experiment should be posted on every sales manager’s wall.

Duncker would sit subjects down at a table next to a wooden wall and give them the following items: a shallow box of tacks, a candle, and a book of matches. Subjects were then told that their task was to attach the candle to the wall and light it so that the wax would not drip onto the table.

Most of the time, Duncker found, subjects would begin by trying, unsuccessfully, to tack the candle directly to the wall or to carefully melt one side of the candle and stick it to the wall. Within five to ten minutes, however, most subjects arrived at the proper solution, which involved tacking one side of the box to the wall and placing the upright candle inside the box.

The key to solving the problem, Pink says, is “functional fixedness” – in this case, the conceptual realization that the box can serve more than one function.

Jump Forward in Time
Decades later, psychologist Sam Glucksberg took the experiment a step further, dividing subjects into two groups. Subjects in the first group were told that they were being timed to establish norms for how long it would typically take a person to solve this puzzle. Members of the second group, however, were offered an incentive: If the participant’s time was among the fastest 25 percent of those being tested, he or she would receive $5 (the equivalent of $20 today).

Naturally, the group with a financial interest in finding a speedy solution to the puzzle finished quicker, right? Wrong. In fact, Glucksberg found, the incentivized group on average took 3 1/2 minutes longer to solve the puzzle.

Pink says that whenever he describes these results to business professionals, he invariably receives pained, involuntary gasps in response. The explanation for Glucksberg’s results, he says, is that, contrary to long-held beliefs, extrinsic rewards tend to narrow people’s focus on a task. But this narrow focus also tends to blind us to any solutions that lie on the periphery. In effect, he says, motivational “carrots” actually serve to depress our creative, problem-solving abilities.

What It Means
The results of this experiment, along with the substantial body of similar research that’s been conducted on human motivation, hold important lessons for the sales profession, Pink says. In the past, when much of the sales task involved a great deal of order taking, traditional carrot/stick motivators made sense; they helped keep people focused on the task at hand, which involved maximizing the volume of sales transactions. But professional sales has changed dramatically since then, and today most of those order-taking roles have been shipped overseas or moved onto the Web.

“To sell sophisticated products or high-ticket items, you need some decent human capabilities,” Pink says. “For that sort of work – the more creative, conceptual, consultative work that salespeople are doing – the if/then motivators don’t work well. So one can possibly see – not immediately – a recasting of the way salespeople are compensated.”

Pink recognizes that in some quarters what he’s suggesting borders on heresy. Asking sales organizations to give up commissions is tantamount to the Olympics abandoning the practice of awarding medals. Yet, he argues, if business professionals are willing to broaden their perspective, much like the test subjects imagining the use of a box as a candle support, they can see the truth behind his assertion.

“Often, when something isn’t working,” he says, “we don’t question whether the underlying assumptions are right. So we say, ‘The reason these carrots and sticks aren’t working is because we don’t have enough carrots or sweet enough carrots or pointy enough sticks, or we’re not hitting hard enough, so let’s ratchet that up.’ And in some cases that takes you down precisely the wrong road, because the solution is to abandon the premise and take an entirely different approach.”

At One Company
A perfect case in point is Red Gate Software, a Cambridge, UK-based company that provides archiving tools for Microsoft technology users. From the company’s inception in 1999, sales operated with a traditional commission-based structure. But in late 2008, out of concern that sales compensation had fallen out of alignment with bottom-line results, the company brought in an outside (continued on page 2)
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