is called the candle problem and here's how it works. I bring you into a room, I give

you a candle, some thumbtacks, and some matches and I say to you: Your job is to attach the

candle to the wall so the wax doesn't drip on the table. And eventually after 5 or 10

minutes, most people figure out the solution which you can see here. The key is to overcome

what is called functional fixedness. You look at that box and you see it only as a receptacle

for the tacks, but it can also have this other function as a platform for the candle. Now,

I wanna tell you about an experiment using the candle problem, done by a scientist named

Sam Glucksberg - he gathered his participants and he says I'm gonna time you, how quickly

you can solve this problem. He offered rewards, he said if you're in the top 25% of the fastest

times, you get 5 dollars. If you're the fastest of everyone we're testing here today, you

get 20 dollars. How much faster did this group solve the problem? Answer: It took them on

average 3 and a half minutes... longer. Three and a half minutes longer, now this makes

no sense, right? If you want people to perform better, you reward them, right? Bonuses, commissions,

their own reality show, incentivize them. You've got an incentive designed to sharpen

thinking and accelerate creativity and it does just the opposite. These contingent motivators:

If you do this then you get that work in some circumstances but for a lot of tasks, they

actually either don't work or often they do harm. Think about your own work: Are the problems

that you face or even the problems we've been talking about here, are those kinds of problems

- do they have a clear set of rules and a single solution? No! Those if - then rewards

DON'T WORK! Economists at LSE looked at 51 studies of pay for performance plans inside

of companies. Here's what the economists there said: "We find that financial incentives can

result in a negative impact on overall performance." There's a mismatch between what science knows

and what business does. Here's what science knows: 1. Those 20th century rewards, those

motivators we think are the natural part of business do work but only in a surprisingly

narrow band of circumstances. 2. Those if then rewards often destroy creativity. 3.

The secret to high performance isn't rewards and punishments but that unseen intrinsic

drive, the drive to do things for their own sake, the drive to do things because they

matter. I rest my case.