Intrinsic Motivation and Transformational Leadership in Professional Services

Introduction

Professional services organizations such as law firms, accounting firms, and other consultancies face the same types of problems common to many organizations today, including increasing competition and a challenging economic climate. At the same time, these organizations enjoy many of the same opportunities available to other enterprises — innovations in technology and human resource practices that provide new, more efficient, and more profitable ways of doing business. Professional services organizations differ from other types of enterprises, however, in the types of people involved, and such firms require an informed human resource management approach to be effective.

To determine how intrinsic motivation and transformational leadership methods can be used to promote performance and profitability in professional services organizations, this study provides a review of the relevant peer-reviewed and scholarly literature, followed by a summary of the research and important findings in the conclusion.

Background and Overview

One of the more challenging aspects of leading any type of organization is identifying what leadership techniques are best suited to the environment at any given time, and developing the skills and insights needed to provide that leadership effectively. The need for optimal leadership is significant, and competition among professional services organizations of all types and sizes has increased considerably in recent years (Susskind, 1999). Indeed, Susskind emphasizes that "there is an avalanche of competition from suppliers of professional services" (p. 29). Moreover, there is a growing overlap between the types of services being provided by professional services organizations. As Susskind adds, "Overall, the traditional boundaries between professional services organizations are breaking down" (1999, p. 29).

The clientele of these organizations is also in a state of transition. Susskind reports that "today's clients seem far more discerning and demanding than in the past. Clients want higher quality work and quicker service. They are requiring greater value for money, which usually translates into paying lower fees" (1999, p. 29). This combination of increasing competition and client pressure for faster, less expensive services makes the need for effective motivational techniques and leadership methods all the greater.

In contrast to extrinsic motivational factors such as rewards, intrinsic motivation is based on two fundamental internal human needs: (a) the need for competence and (b) the need for self-determination (Cameron & Pierce, 2002). When people are intrinsically motivated, they either enjoy what they are doing or receive some other form of personal gratification from the activity that encourages its continuation. Cameron and Pierce report that "on the basis of their humanness, people strive to feel competent and free from external control. Thus, intrinsic motivation arises from activities that lead people to fulfill their needs for competence and self-determination" (p. 39). From this perspective, activities that provide a sense of competence and self-determination will be highly motivating for professionals of all kinds, and the pay-off for the sponsoring organization can be significant. Cameron and Pierce note that "the energy of intrinsic motivation heightens interest and sustains involvement in an activity" (2002, p. 39).

The benefits that can be realized through intrinsic motivational approaches are substantial. As staff members become more involved with work in a specialized area of interest, they are likely to develop a more pronounced sense of loyalty to the company. These staff members will then, of their own volition, engage in behaviors — including building networks and communities of practice — that are mutually beneficial. In this regard, Kaarsemaker (2008) reports that properly motivated professionals "get to know the company better, acquire knowledge, skills, and abilities that are specialized — in other words, employees obtain intimate knowledge. Intimate knowledge refers, for example, to knowing the right people, knowing how to get things done in the company, and to specialized substantive knowledge, skills, and abilities" (p. 325). The outcome of this process over time can be cumulative and have organization-wide implications. Kaarsemaker concludes that "intimate knowledge is not easy to buy in the market. Knowledge, skills, and abilities that are not easy to replace, and that are of much higher value to the company than to other companies, are called firm-specific. Firm-specific human capital, because it is firm-specific and valuable to the company, is a source of sustained competitive advantage and therefore highly important to the firm" (2008, p. 325).

Intrinsic Motivational Techniques for Professional Services Organizations

Some examples of how this aspect of intrinsic motivation can be applied in a professional services organization include assigning work in ways that capitalize on individual talents and preferences. For instance, in a corporate law firm setting, some attorneys may prefer environmental work because they have strong beliefs in those issues that are intrinsically motivating, while others may prefer high-value work that provides maximum extrinsic rewards in terms of billable hours, with little regard for intrinsic self-determination and competence factors. This commitment to earning as much as possible makes the selection of appropriate motivational techniques for these individuals relatively straightforward, but intrinsic motivational methods can still be used for these and other like-minded professionals if their individual preferences for specific types of work are identified and taken into account when assignments are made.

For example, many professionals keep pictures of their families on their desks not so much to share them with colleagues, but rather to remind themselves why they are doing what they are doing — which in some cases may involve tasks they find personally challenging but which must be completed as part of their professional responsibilities. This observation is consistent with Vockell's (2001) assertion that "even though intrinsic motivation is highly desirable, many of the activities in which human beings engage are directly influenced by extrinsic rather than intrinsic motivation" (para. 3).

Therefore, simply providing additional opportunities to receive extrinsic rewards — additional pay or benefits, promotions, and so forth — may become counterproductive over time unless these motivators are balanced with appropriate intrinsic motivational techniques. Vockell adds that "it is important that extrinsic motivators be backed up by intrinsic motivators. If this does not happen, the result is likely to be a reduction in the very behavior we want to promote. Extrinsic motivation when used alone is likely to have precisely the opposite impact that we want it to have on achievement" (para. 3). For these individuals, then, there is an inextricable relationship between extrinsic and intrinsic motivation that can be discerned and used to motivate professionals toward sustained superior performance.

Examples of how these principles can be applied in a law firm environment are provided by Carayannis and Juneau (2003), who cite the case of one law firm that billed at an hourly rate but also invested in select high-technology clients as part of its motivational approach, because many newer hires had expressed a preference for this type of work. The approach succeeded in reducing new attorney attrition and improved overall billable hours in the process (Carayannis & Juneau, 2003).

In order to encourage behaviors that produce improved economic performance — such as increased billable hours — professional services firms must also encourage appropriate knowledge-sharing practices. Weiss (1999) emphasizes that "to facilitate knowledge sharing, professional service firms must ensure that incentives are aligned with the goals of creating a knowledge-sharing organization. Too often, professionals receive mixed messages about the importance of knowledge sharing. For instance, most professional service firms have incentives for professionals, especially more senior-level professionals, to develop new client business and be highly responsive to existing clients" (p. 62). Such extrinsic motivators, however, tend to encourage a corporate culture that values only billable services, in ways that discourage intrinsically motivating activities that may also add value for the firm. According to Weiss, "the project structure of professional services firms generally emphasizes 'billable hours,' the billing of clients for legitimate work performed on their behalf. This practice may leave professionals with the impression that 'if it's not billable, it doesn't count,' and that therefore the activity is not worth doing" (p. 62).

When this type of corporate culture exists, professionals may be disinclined to engage in those activities that create the networks and communities of practice needed to grow the firm's business and promote intrinsically motivating opportunities for all practitioners. Weiss points out that:

"There is a perception that time professionals spend on non-billable work eats into firm profits. Knowledge collection and connection activities fall into this category, since professionals typically do not bill clients for time devoted to knowledge sharing, as clients are generally unwilling to pay for services from which they do not receive an exclusive benefit. Thus, when professionals are faced with a choice between serving clients and collecting or connecting knowledge, the incentives typically line up in favor of serving clients" (1999, p. 62).

This misperception detracts from the firm's overall productivity and profitability in ways that may be difficult to quantify but will have a cumulative adverse effect on customer service and therefore on the number of billable hours produced. Weiss describes the dynamic as "ironic" and notes that "the incentives to put clients first underplay the more subtle logic behind encouraging knowledge sharing in the first place: firms that effectively collect and connect what they know will better serve their clients" (1999, p. 62). The benefits that can accrue to professional services firms that achieve this level of knowledge sharing are wide-ranging and can contribute significantly to performance and profitability. Weiss advises that "clients typically want customized services, but they do not want to pay professional services firms to 'reinvent the wheel.' Professional service firms can develop competitive advantages when they provide higher quality services that are delivered more efficiently than their competition" (1999, p. 62). To achieve this desirable combination of professional talent and administrative efficiency, a corporate culture must be in place that values knowledge-sharing behaviors, which can be encouraged through intrinsic motivational techniques. Weiss notes that professional services firms "must be able to leverage the collective, accumulated experiences of professionals in their firms. Effective knowledge collection and connection enable firms to do just this, and they support a virtuous cycle that leads to higher quality services for clients" (1999, p. 62).

Some of the ways professional services firms can develop this optimal combination include the following:

1. Introduce incentives that value collection and connection activities, and evaluate professionals on these activities in performance reviews.
2. Institute practices of assessing partners and senior-level professionals on their success in creating knowledge-sharing opportunities in the teams they lead.
3. Encourage or require team debriefs at the end of projects so that professionals can share what they have learned.
4. Undertake activities that facilitate knowledge sharing, including encouraging senior-level professionals to become knowledge brokers.
5. Align incentives with knowledge-sharing goals (Weiss, 1999, p. 62).

Although it is reasonable to assume that all professionals in an organization that uses their training and skills receive some level of intrinsic motivation from the work they perform — since this is precisely what they studied and trained for — it is also reasonable to suggest that in any professional organizational setting, various types of work assignments are available that may be more suited to some individuals than others, making the alignment of individuals with work types an important part of the intrinsic motivational equation. This does not necessarily mean that people need to find their work "fun," but it does mean that some people enjoy some types of work more than others. Some ways that leaders can better match the type of work performed with individuals who will receive the maximum intrinsic motivation from it include the following:

1. Make it a priority but keep it simple. The CEO and senior leaders need to believe it, articulate it, and model it.
2. Link talent to business strategies. Show the connection in multiple compelling ways.
3. Develop disciplined systems for assessment. Require leaders to know their people's talents and conduct regular reviews (e.g., quarterly updates) as well as an annual in-depth evaluation.
4. Use the data. Integrate talent assessments and organizational needs back into internal search or recruitment, retention and motivation programs, professional and leadership development programs, performance management, and workforce planning (Vosburgh, 2007, p. 12).

In many professional services organizations, there are common intrinsic motivational methods that provide useful insights into the environments involved and the outcomes achieved. For example, peer review is used by many law firms as a means of quality control intended to protect the firm, ensure continuity and quality in client services, and provide a framework for motivating up-and-coming firm members (Sternberg & Horvath, 1999). As a result, some professional services organizations use mentorship programs to help motivate younger staff members to become more proficient and "learn the ropes" in ways that contribute to their sense of competence and self-determination (Sternberg & Horvath, 1999). Of course, some mentors are better than others at providing these services. Sternberg and Horvath add that "associates understand the limitations of the environment, and struggle in their early years of practice to work with the partners who are the better mentors. They also try to be given assignments that will afford them the best opportunity for learning with a minimal risk of serious failure" (1999, p. 18).

Likewise, a growing number of professional services organizations have developed standardized training programs to help groom their talent for expanded roles in the future in ways that contribute to their sense of competence and self-determination (Vosburgh, 2007). Grooming the current cadre of leaders just makes good business sense, because every organization needs this type of continuity for future success. Vosburgh (2007) reports that "professional services organizations already know about creating strong and abiding relationships. Just as this is the goal for externally focused revenue-generating businesses in professional services, so this could also be the goal for internally focused organizations that are committed to helping their internal clients become more successful" (p. 12).

Some of the factors that have been shown to promote intrinsic motivation are described in Table 1 below.

Table 1: Factors that Promote Intrinsic Motivation and Their Uses

Challenge: People are best motivated when working toward personally meaningful goals whose attainment requires activity at a continuously optimal (intermediate) level of difficulty. Guidelines: (1) Set personally meaningful goals. (2) Make attainment of goals probable but uncertain. (3) Give ongoing performance feedback. (4) Relate goals to self-esteem.

Curiosity: Something in the physical environment attracts the learner's attention, or there is an optimal level of discrepancy between present knowledge or skills and what these could be if the learner engaged in some activity. Guidelines: (1) Stimulate sensory curiosity by making abrupt changes that will be perceived by the senses. (2) Stimulate cognitive curiosity by making a person wonder about something.

Control: People have a basic tendency to want to control what happens to them — the fundamental "self-determination" aspect of intrinsic motivation. Guidelines: (1) Make clear the cause-and-effect relationships between what individuals are doing and things that happen in real life. (2) Enable learners to believe that their work will lead to powerful effects. (3) Allow learners to freely choose what they want to learn and how they will learn it.

Fantasy: Learners use mental images of things and situations not actually present to stimulate their behavior. Guidelines: (1) Make a game out of learning. (2) Help learners imagine themselves using learned information in real-life settings. (3) Make the fantasies intrinsic rather than extrinsic.

Competition: Learners feel satisfaction by comparing their performance favorably to that of others. Guidelines: (1) Competition occurs naturally as well as artificially. (2) Competition is more important for some people than for others. (3) People who lose at competition often suffer more than winners profit. (4) Competition sometimes reduces the urge to be helpful to other learners.

Cooperation: Learners feel satisfaction by helping others achieve their goals. Guidelines: (1) Cooperation occurs naturally as well as artificially. (2) Cooperation is more important for some people than for others. (3) Cooperation is a useful real-life skill. (4) Cooperation requires and develops interpersonal skills.

Recognition: Learners feel satisfaction when others recognize and appreciate their accomplishments. Guidelines: (1) Recognition requires that the process, product, or some other result of the learning activity be visible. (2) Recognition differs from competition in that it does not involve comparison with the performance of someone else.

Source: Vockell, 2001, para. 2

Conclusion

Sometimes leaders get everything just right by delivering the precise combination of intrinsic motivational-based incentives, corporate culture, and the trust needed to achieve organizational goals more efficiently than their competitors. This successful mix does not simply emerge on its own, but rather requires a thoughtful approach to providing the leadership method best suited to the particular mix of professionals in the organization, as well as its vision and strategic goals. Some leaders appear to possess an intuitive sense of what approach is needed with which groups of professionals in order to increase the likelihood of success, but in every case, professionals will want their voices heard when changes are proposed that affect their established routines.