Vega Factor CEO Maps Out Science to Workforce Performance

04.11.16
Features

Lindsay McGregor, Founder and CEO of Vega Factor and author of New York Times Bestseller Primed to Perform, speaks with GrowthCap about total motivation and the most important factors in creating a high performing culture.

RJ: Thanks so much again for joining us, we really appreciate you taking the time. First off, we caught your blog post at HBS and we were really taken by it. If it’s ok with you, I’d like to start there since it’s such an interesting story of resilience.

Lindsay: I’d be happy to start there, and thank you, RJ, for having me, it’s a pleasure to be here. When I was a junior in college I had been having some pain in my arms for probably about a year. The pain got so bad that I couldn’t type or write or turn a doorknob or hold a glass or cut my own food. I thought it was just from overuse, but it took almost two years to diagnose what the problem was. And it was many, many years before I could use my hands again. It turned out that I had all this nerve pain and nerve damage in my hands and my arms.

In order to cope and continue on at school, I learned how to use voice recognition software to dictate my senior thesis and use a mouse with my foot in order to navigate the computer. I also had to dictate my physics exam through a graduate student who would draw what I was describing. I had a very challenging senior year that really tested my ability to persist. And I was the type of person who really prided myself on my independence. No matter, I wanted to be able to do things all by myself.

The experience taught me that I had this amazing community of people around me who I could work with and would help me to get through these tough situations. It really opened my eyes to when you’re working as a team you can achieve so much more than if you’re working as an individual.

RJ: This kind of life changing experience I think really shows how to persist through adversity. Were there moments where you really had to mentally pull yourself together and not take the path of least resistance?

Lindsay: Definitely, I think that many entrepreneurs will resonate with this, that it was just constant experimentation. You had to try dozens and dozens of things that didn’t work until you found something that did, like trying different voice recognition software products. Try and use a mouse with your foot or with your head. Try and dictate to different people, try and experiment with new ways to get your laundry done or check your email or take notes in class. And you try many, many, many things that don’t work. I was using voice recognition software and I remember all the frustrating misinterpretations I had to constantly correct. But you get through it, you learn, you experiment until you find something that does work.

RJ: In your book, you present some really insightful ideas about what truly drives people to perform at higher levels and what makes for a great culture.

Lindsay: Working in strategy with many Fortune 500 companies, one of the questions we got almost every single time while sitting in a big boardroom with the final steering committee was, do we have the culture to pull off this strategy? Do we believe that we can actually make this work? And time and again we were asked about how to build a great culture that can lead to the highest levels of performance. And at the time we researched extensively and the best that was out there was a top 10 list or what Google or Facebook does, but what Google does doesn’t feel authentic for most companies, it’s not tailored to their culture. And we couldn’t prove that another company’s brand of culture would actually impact their bottom line.

So we launched a research project, which was probably one of the largest research projects ever into culture. We tested all the different theories of what makes a high performing culture to see which one quantitatively connected to the bottom line. Finally, after years of research we found that one did. It’s based off of research originally done at the University of Rochester by Professors Richard Ryan and Edward Deci. We built on it in the workforce by testing it at 50 major companies across the US and 20,000 people around the world.

It comes down to this very basic statement that why you work determines how well you work. There are six reasons why people work, three lead to high levels of performance, three lead to worse levels of performance. You can measure the reason and build a company to influence why people work, through how you design your culture, not only your mission statement and your values, but how your leaders lead, how your organization is designed, how your roles are designed, how your performance reviews are conducted. All of these things affect your culture and why people work.

For many emerging growth organizations, they recognize that when they’re small the CEO’s personality can go a long way in shaping the culture. But as you start to grow and you hit about 50 people it’s no longer just good enough to have a nice well-intentioned executive team. At that point the system in your company starts to take over and affects your culture.

RJ: The concept of a “play” that you present in the book is also very interesting. Does this get down to hiring the right people, hiring the best fit?

Lindsay: Yes, one of the first questions we always get asked is, how do I recruit people with the right profile for the job? And preliminary experiments into this indicate that about 20% of somebody’s performance is going to be based on their personality. But a huge much higher percentage of how they do on the job is what you do once they get there. Many organizations spend hundreds of hours working on recruiting and almost no time working on their culture. We work with organizations to flip that percentage.

RJ: How do you know when a prospective employee is ultimately going to consider the job “play” for them?

Lindsay: It turns out that the highest performers, once they’re on the job, are not the ones that are there just for the money. You want to look for people who have high levels of what we call total motivation or TOMO for short. What you’re looking for is lots of play, purpose and potential and very little emotional pressure, economic pressure and inertia. You can measure those six motives, and add up the first three and subtract the last three, to calculate someone’s total motivation. And they have different weights based on the degree to which they affect your performance on the job.

Play is best characterized as somebody who’s genuinely curious about the work, who finds it interesting, who likes to experiment with it. Some people love playing with financial analyses, some people love playing with words. It’s when somebody really enjoys the task that they’re going to be doing every day. For example, you might have an amazing purpose to save the world. But when you’re hiring an accountant, you want to find somebody who also actually enjoys the work of an accountant.

Purpose is when you’re doing something because you believe in the impact of that work. And potential is when the person believes that work is going to help improve their own potential, their own lives and their own careers. So for example, a job that’s going to be a good stepping-stone.

What you want to avoid is someone in a job due to emotional pressure or economic pressure or inertia. Emotional pressure is that fear or guilt of disappointing yourself or somebody else, economic pressure is when you’re there only for the reward or to avoid a punishment, and inertia is when you’re showing up for work today because you showed up yesterday. Surprisingly there’s a lot of inertia in the workplace, or perhaps unsurprisingly. Some companies even make it their strategy to create inertia. For example, I’m going to put my business in the middle of nowhere where there’s no competition for talent, where people will be forced to stick with me. That’s a strategy that’s actively creating inertia in your company.

RJ: Can you tell us about your organization, Vega Factor?

Lindsay: We founded Vega Factor to truly unlock human potential at scale. How do you create the world’s most adaptive organizations through culture? We work with clients, and build the education and technology, to help companies build the systems of a high performing culture. You don’t want the pizza party or the posters on the wall. You want to make sure that all of the systems in your company—how your organization is designed, your jobs are designed, your performance reviews are conducted—are all increasing play, purpose and potential and decreasing emotional pressure, economic pressure and inertia. And when we measured those motives we found that whether you’re working with a trader at a hedge fund or a retail store associate at a coffee shop, you get higher performance when you design the organization’s systems to increase total motivation.

RJ: Do you work across industries and take a customized approach based on each industry and the types of people that work in that industry?

Lindsay: The science behind this is fundamentally human. You can put somebody in an MRI machine and motivate them according to play or purpose or potential and the learning circuits in their brain are activated, whereas if you motivate them through negative motives, the flight or fight responses are activated. This research fundamentally drives us as human beings, in our work lives, in our marriages and in our hobbies. How this research applies can and should be customized by industry and company, but the foundations are universally true.

RJ: Lindsay, these are great insights, we really appreciate you taking the time. Thank you.

Lindsay: Thank you for the opportunity to share this knowledge with your readers.

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