In March 2011, Ascendant completed our first ever strategy management survey, the purpose of which was to learn about the management practices of mission-driven organizations. We asked respondents questions such as how well they thought their organizations were performing, what tools they are using to help manage their performance, and what their greatest challenges are.

We solicited survey respondents via press releases, web postings, and emails to our clients and 2011 Mission-Driven Performance Summit attendees. We received 85 responses from a broad mix of sectors including education, government, non-profits, and commercial industry. Most respondents were American based and have been in existence for over 20 years.

We have been fortunate to work with many nonprofits that have dramatically changed their business. One nonprofit grew from five to twenty million in annual revenue. Another grew from twenty to one hundred and twenty million. Yet another rescued its nonprofits from going out of business to becoming a thriving association. I spoke to one of these nonprofit executives about how he made his board more effective as he grew his organization. I think there is a lot to learn from his changes over the last few years.

It's that time again, when we start thinking about turning over a new leaf and resolve to do something different in the New Year – whether in our personal or professional lives. I read an interesting article on this very topic in The Wall Street Journal on Dec. 22, "How to Keep a Resolution." It discussed the psychology of keeping a New Year's resolution.

After reading the article, I couldn't help but think about how similar keeping a New Year's resolution is to executing your organization's business strategy. The article said that relying on willpower alone is the wrong approach to successfully implementing a resolution.

In my previous blog post, I shared some stories from Dan Pink's book Drive on the new science of motivation. This book has been highly influential in causing many organizational leaders to re-evaluate their ideas about the best ways to motivate people.

In companies and organizations that thrive on creative thinking and innovative solutions, financial rewards and external "carrots and sticks" are being replaced with a new management doctrine of Autonomy, Mastery and Purpose.

But do these ideas really work? What are some real-life examples of Autonomy, Mastery and Purpose, and how can your organization adopt these ideas in your workplace?

Encarta vs. Wikipedia

You don't have to look far for a perfect illustration of Autonomy, Mastery and Purpose. It's a story of two competing projects, pitting hundreds of unpaid volunteers against the mighty Microsoft.

Microsoft Encarta was started back in the mid-1990s. Microsoft paid professionals to design and write an online encyclopedia. Project management practices were implemented to sure it was done on time and done in compliance with all the specifications from leadership.

Encarta essentially said "Let's do this by the rules," and reinforced specific behavior by financially rewarding timeliness and quantity of output. Microsoft then bundled and sold this software as a CD.

As a contrast, Wikipedia was started in 2001, using thousands of mostly anonymous online volunteers to build an encyclopedia. But instead of selling the encyclopedia, Wikipedia made it freely available to the public on the World Wide Web. Instead of rewarding writers with financial incentives, Wikipedia's only reward was its sense of community. Wikipedia rewarded its online volunteers by uniting them in a common purpose and giving special public recognition for those who "went the extra mile" with their contributions.

Instead of doing it "by the rules," Wikipedia said, "Let's do this for fun!"

And whether they intended to or not, Wikipedia created the perfect culture of Autonomy, Mastery and Purpose:

• Autonomy: Thousands of people working on their own, for fun.
• Mastery: Adding one's own expertise and earning respect within the community.
• Purpose: Being part of a movement to create a shared body of knowledge for the world.

Encarta was a job. Wikipedia was a historic mission.

Encarta only published about 62,000 articles in six languages, despite an eight year head start on Wikipedia. The Encarta articles did not have communal input, did not promote autonomy, mastery, or purpose, and Encarta did not succeed. Eventually Microsoft conceded defeat and shut down Encarta in 2009.

Meanwhile, nine years later, Wikipedia is succeeding beyond even the wildest expectations. It is one of the most-visited websites in the world, with 78 million monthly visitors, over 17 million articles, and is available in over 270 languages.

Wikipedia continues to grow with thousands of daily additions in hundreds of languages. And they have continued their culture of Autonomy, Mastery and Purpose by providing a sense of community and rewarding those who "go the extra mile" in adding, editing and moderating content.

Tying incentives to performance

So how can your organization best reward your people if "rewards" don't matter?

The best ideas for incentives come from public recognition of good work. In Wikipedia's case, rewards do not come in the form of a bonus check. But for those individuals who are dedicated and active on the site, they can be honored by becoming a Wikipedia administrator.

With administrator privileges, the honoree gets an added level of Autonomy, Mastery and Purpose. They have the responsibility and privilege of being responsible for the final draft of articles that will be read by millions of readers. They are intrinsically motivated because their work is its own reward.

Wikipedia administrators don't get paid in money, but they get rewarded by being the gatekeepers and standard bearers of a movement that they believe in. Within the community of Wikipedia contributors, this honor is worth more than money.

Atlassian and "FedEx"

Another example is a software company called Atlassian. Atlassian hosts a 24 hour event called "FedEx." During "FedEx," Atlassian developers are given 24 hours of free time to work on anything they want, but they have to "Deliver something overnight." It sounds like a recipe for chaos and wasted time – but "FedEx" has become one of the company's biggest success stories, with the special Autonomy time leading to many important product developments.

Why does it work? The "FedEx" winners are heartily celebrated within the company. Winning the "FedEx" presentation is widely prized within the company – much more than arbitrary cash payments would be.

Through this event, Atlassian gives its employees Autonomy, Mastery and Purpose.

• Autonomy: Freedom to work on whatever they like.
• Mastery: The chance to develop something that they're experts in and truly care about.
• Purpose: Feeling connected to a high-visibility, exciting opportunity that matters to the company and is admired by their colleagues.

"Sure, it sounds great," you might say, "But I've never heard of Atlassian... "

Have you ever heard of Google?

Google – 20% Time

This 21st century phenomenon intentionally under assigns each employee. Google gives every employee "20% time" – the equivalent of one full workday each week to use their time however they see fit. Google employees use 20% time to invent, explore and work on any projects they are interested in, in any environment they like. Google's "20% time" has resulted in hugely valuable ideas. Gmail, Google News, and other popular services were invented during Google employees' 20% time.

Atlassian and Google both understand that the future is driven by new ideas and fulfillment of a larger purpose – and they give their employees the autonomy to pursue it.

Sharing Responsibility

Perhaps the most surprising lesson from Dan Pink and the new science of motivation is that greater freedom often results in greater responsibility. Given the chance, people will start to work harder and think smarter – for their own sake.

If employees are given simple tasks, clear goals, and promised more money to do more work in less time, the organization might make incremental improvements.

But if employees are truly motivated from within, then the sky is the limit. If employees have a spirit of Autonomy, Mastery and Purpose, they will have the freedom and inner drive to develop truly creative solutions. Intrinsic motivation – where work is its own reward – is the best way for your organization to achieve transformative goals.

Every organization needs to get the most out of its people, especially with the looming skills shortages that the U.S. workforce will be facing in a few years. Maximizing our human potential can start with trusting in employees and giving them the freedom to innovate.

For most of the 20th century, the quintessential American job was in a factory. Workers earned good incomes and middle-class lifestyles by doing repetitive, high-volume tasks. The way to motivate workers at these jobs was simple: "carrots and sticks." Pay people more money for doing more work, and punish people for breaking the rules.

Today, in the 21st century, the best organizations must act less like factories and more like think-tanks. The winners of the 21st century workplace will not be the ones who make the most widgets, but who can create and incubate the most creative and game-changing ideas.

But what many social scientists are discovering is that the motivational styles of the 20th century "factory" workplace do not work as well when motivating people to perform creative tasks. If the successful model for a 20th century organization was a factory, the successful 21st century organization will look more like a social movement.

This means that 21st century organizations need to embrace a new style of motivational leadership. Carrots and sticks must be replaced with deeper, more personal, more powerful motives for success.

Current research (outlined in Dan Pink's bestselling book Drive) is showing that when it comes to creative, innovative work, money is not what really motivates people. When organizations are really looking to achieve breakthrough innovations, they need to motivate their workers in other ways: by recognizing people's innate desire to be a valued team member who contributes to significant solutions.

Money only covers the basics like shelter and food. To encourage truly creative thinking, the work and related result must become its own reward.

What really motivates people?

To see great gains, organizations need to make a cultural shift away from short-term gains and contingent incentives. Instead of saying, "if you do this, then you will get that," organizations need to move toward a culture where people are self-motivated to do their best work. This is the best way to get employees to take responsibility, take (smart) risks, and develop truly creative solutions.

In July 2009, Dan Pink gave a talk to the TED conference about the surprising science of motivation. Social scientists and economists are discovering that when it comes to creative thinking, people are most strongly motivated by intrinsic factors ("doing things for their own sake") not from extrinsic motivators ("carrots and sticks"). To get the most creative solutions for your most complex challenges, you need to create a culture where people have Autonomy, Mastery and Purpose.

What do we mean by these terms? And does it really work?

In his lecture, Dan Pink discusses how experiments have shown that financial incentives only work for routine tasks. When there is a clear set of rules and a single solution, people can get the work done faster when they are promised more money.

The trouble is: most of the biggest challenges that our organizations are facing in the 21st century are anything but routine. Automation and outsourcing can replace any lower-level or repetitive task. For more complex cognitive thinking and creative work, financial incentives do not work. In fact, these financial incentives actually distract from truly creative solutions.

As Dan Pink says, "enticing people with a sweeter carrot or threatening them with a sharper stick" does not work in the business of thinking creatively.

In contrast to "sticks and carrots", Dan Pink introduces the concepts of Autonomy, Mastery and Purpose.

• Autonomy: People feel an urge to direct their own lives.
• Mastery: People feel a drive to get better at something that matters.
• Purpose: People feel an innate need to be part of something larger than themselves.

If your organization can help your employees achieve feelings of Autonomy, Mastery and Purpose, you will likely "AMP" up your performance. Employees who have Autonomy, Mastery and Purpose are intrinsically motivated, full of internal drive. They're doing work for its own sake. They're doing work that matters, that interests them and that they feel is important. This is a huge difference in attitude from just punching a clock at the "factory."

Don't forget Maslow.

To be sure, money matters to some extent. People want to earn enough money to have food and shelter and a safe place to live. But once those basic needs are met (as Maslow's Hierarchy of Needs states), people aspire to meet higher needs – love and belonging, esteem, and self-actualization.

Once people have a decent standard of living, additional money doesn't really motivate them as much as Autonomy, Mastery and Purpose.

Organizational leaders are re-thinking some long-held assumptions about what truly motivates people. External motivators like money are less important (and less effective) than helping your employees light their own spark of motivation within themselves.

How can leaders communicate excitement about strategic plans? Even the best strategies falter if the objectives and goals fail to resonate with the organization's key audiences. It's not enough for leaders to know where they want the organization to go.They also must find ways to effectively introduce upcoming challenges, explain options, listen to concerns about change, and develop consensus within the entire team, particularly those who keep the lights on, the doors open, and the customers smiling every day.

Encourage Opportunities for Feedback

Many employees may react with apprehension or skepticism – too often, "change" is seen as a synonym for "layoffs" or "more responsibilities." Counteracting resistance starts with sharing ideas across the organization and many positive suggestions for improvement originate with stakeholders in side-conversations encouraged throughout the development process.

Developing venues for "bottom up" communication enhances team performance and often reveals simple answers to problems that have been overlooked. In addition, leadership that extends this kind of courtesy and respect toward employees earns confidence and models healthy exchange of information.

Leadership should explain the big-picture ideas and challenges, then allow smaller focus groups of staff to seek answers. Encouraging solutions developed by the front line often alleviates apprehension and ensures availability of allies and experts throughout implementation.

Constructing "no-fault" systems for feedback from all employees makes it possible to address sensitive concerns that may impede the team's productivity. For example, designating a cafeteria comment box or an e-mail direct to leadership may facilitate insights - or identify log jams - that otherwise might not be forwarded in the typical chain of communication.

Leaders should try to get the most candid and unvarnished feedback; if an organization's staff thinks that the new strategy is a terrible idea, or if employees have major concerns, then leaders need to know and be prepared to adjust. Employees should be viewed as teammates and deserve credit in successful implementation of change. By frequently communicating and actively including their ideas- the strategic plan will have the momentum to overcome any trouble and be on a track for success.

Successfully Communicate the Strategic Plan

Organizations should create a variety of formats to talk about and explain the strategic plan. Some companies use video presentation to recount the organization's history, and then introduce their strategy to overcome current challenges and ensure future success.

Other communication ideas include:

• Create a dedicated blog on the organization's intranet where elements of the strategic plan can be explained in greater detail – and make it possible for employees to post comments and questions (anonymously, if necessary – and as long as the anonymous comments are constructive). Bill Marriott's blog is a great example. •Host a series of brown bag lunches where the organization provides lunch so that employees can discuss the strategic plan with managers.
• Send a monthly e-mail newsletter about various key points from the strategic plan – or incorporate the strategic plan into an existing newsletter, with a special article called "Strategy Corner." Invite new employees to write short articles giving their take on the plan; add a personal photograph to highlight a personal touch.
• Use tangible objects to signal that real change is imminent. If your organization has a strategic goal of reducing waste and improving efficiency, replace everyone's wastebaskets with smaller ones, or install high-efficiency bulbs.
• Offer certificates of award or appreciation to recognize good input. A nationwide organization of students awards a green brick every time a member goes "above-and-beyond" serving the organization. This simple award was created with two cans of spray paint and an hour of free time- but is now a highly prestigious trophy that influences behavior on a daily basis.

Be Their Biggest Supporter!

Use crystal clear language that people at all levels of the organization will understand and relate to. Engage your audience with a story about what success looks like. In the case of a Southwest baggage handler, expediting the baggage-handling procedure enabled the airline to add one more flight per day.

For hospitals, a single instance of proper hand washing can spare many from the risk of infection. Remember, everyone has a hand in fulfilling the organization's mission. The leaders' job is to include employees in the process, encourage them, and ensure they are equipped to move the organization toward success.

For more resources about implementing a strategic plan or enhancing communication within an organization, contact Ascendant Strategy Management Group.

The city of Charlottesville, VA is in the process of rolling out a performance management and measurement initiative. This initiative is managed by the Office of Budget and Performance Management and is called P3 within the city. It stands for "Plan, Perform, Perfect."

Rochester City School District is in the process of reinventing itself, and perhaps, reinventing the way that educational leaders across the country think about K12 educational performance. Rochester is on its way to improving its graduation rate, growing it from an abysmal 39% to an acceptable 75%, but Rochester's ambitions do not stop there.

There's been a lot of writing on the importance of leadership in an organization. There have also been volumes written about the importance of management. But one of the critical issues -- how management and leadership intersect -- hasn't been dealt with to any great depth. A few years ago, Bob Kaplan wrote an article for the Balanced Scorecard Report called "Lead and Manage Your Organization with the Balanced Scorecard."

I read an interesting article in the Harvard Business School, Working Knowledge website. It is essentially a book review of esteemed professor Michael Beer. His new book is called High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. The book explores long-term successes like Southwest Airlines, Johnson & Johnson, Hewlett Packard, McKinsey, Goldman Sachs, Toyota, etc. It got me wondering about nonprofits leveraging these same skills.