A 'crazy' manager at JB Hi-Fi wasn't popular when he did away with the 'carrot and stick' approach

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Many new managers try the carrot and stick approach to motivation.

The simplicity is enticing. Do this well and rewards will come your way. Do it badly and pain will come. An immediate result follows.

The trouble is that it doesn’t work if you want to build ownership and satisfaction. The focus tends to be on hitting one goal only and any overall view of the business is lost in the rush.

Sam O’Brien is an area manager at JB HI-FI, responsible for more than 300 staff and almost $180 million in turnover.

In 2013 he moved from Perth to Canberra, taking over a high achieving team he described as “compliant, very structured”, and excellent at hitting KPIs (key performance indicators).

“I had come from a high achieving team too back in Perth, but it was a different type of motivation going on,” he told the annual conference on leadership and culture by Human Synergistics, an Australian consulting firm in organisational culture.

“Back in Perth we had a lot of intrinsic love and satisfaction for the role.”

It wasn’t working

The carrot and stick method was at work in Canberra.

Employees were told: “If you do this dangling the carrot, you’re next in line for the big job. If you achieve this KPI, then you will be promoted next.”

O’Brien: “It wasn’t working, we had our people focused on this narrow goal of just getting a promotion, and I really wanted to help our people find the satisfaction, the meaning, the significance in the role that they are in.”

He also didn’t want to use the stick. “I really wanted to steer away from using a formal warning documentation program,” he says.

But change was harder than he thought.

“You see it’s actually easy to hand out these warnings, it’s much harder to have a critical conversation, that takes time,” he says.

“It takes time to have a conversation of getting to the heart of the matter, a win-win outcome.”

O’Brien thought he was going to be popular making changes.

“It didn’t quite work out like that, and I made a few mistakes, some really critical mistakes,” he says.

Crazy

He took away the carrot and stick but didn’t back it up with new tools.

“They thought I was crazy,” he says.

“I was trying to grow some ownership by allowing a greater degree of autonomy, but managers actually wanted specific instructions on the job.

“With autonomy there’s a risk, there’s a risk you could do the wrong thing.”

He took the managers on a leadership journey, including a series of workshops called Leading with Purpose.

“It was all about new tools and ways to motivate their people and to help them find a sense of purpose and meaning and significance in their realm,” he says.

He put together a staff satisfaction survey. The big ticket issues were broken promises and a lack of trust.

“You can’t truly be great living in fear, you just can’t do your best work,” he says.

Under the new regime, manager responsibility to their people grew and true ownership flourished.

Statistics

In 2012, before O’Brien arrived, 120 warnings or notices of unsatisfactory performance were handed out to employees out of just over 300 staff.

By 2016, that was down to 60.

In the first half of 2017, only 12 warnings were isssued.

“It’s not because we’re avoiding issues around unsatisfactory performance,” he says. “We just have less of it. And we’re better, we’re better at having conversations, we’ve got new tools on ways to coach and talk our people through challenges.

“I’m on four years in and I’m still not done, it’s not over yet.

“As business leaders we are responsible for creating the thriving engaging work places of the future. We have an obligation that our people are doing great things within our organisations.

“We have an obligation to provide them with the skills to go on to do great things in life. We have an obligation to keep them safe. We can make our organisations absolutely great places to work.”

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