Adrian Gostickis the author of several bestselling books on corporate culture, including the New York Times, USA Today and Wall Street Journal bestseller The Carrot Principle, co-authored with Chester Elton. Gostick also wrote the bestsellers The Integrity Advantage (co-authored with Dana Telford) and The 24-Carrot Manager (co-authored with Elton). His latest book, also co-authored with Elton, is the New York Times bestseller The Orange Revolution: How One Great Team Can Transform an Entire Organization. His research on employee engagement has been called a “must read for modern-day managers” by Larry King of CNN, “fascinating,” by Fortune magazine and “admirable and startling” by the Wall Street Journal.

Gostick’s books have been translated into 20 languages and are sold in more than 50 countries around the world. As a leadership expert, he has appeared on numerous national television programs including NBC’s Today Show and has been quoted in dozens of business publications and magazines. He is vice president of the training and publishing arm of the O.C. Tanner Recognition Company. Gostick earned a master’s degree in strategic communication and leadership from Seton Hall University, where he is a guest lecturer on organizational culture.

Morris: Before discussing any of your books, a few general questions. First, whatever we call the current economic period (e.g. recession, depression, disruption, reset), the fact remains that most people are struggling to survive financially. That said, do you think that the importance of monetary rewards is more than, less than, or about the same as it was (let’s say) five years ago?

Gostick: Just so we are clear: In this economy, as in any really, you pay people absolutely as much as you can afford. The trouble is, we only have so much money to go around. So, with the absence of huge amounts of cash to hand out to our people, what do we do? That’s where we must get creative in engaging our people, helping them feel part of something important, giving them opportunities to grow, letting them know we care about them as individuals.

Morris: Is there an incentive that is even more important to workers than a monetary award? If so, why? And what is the significance of that?

Gostick: What the research shows is that monetary awards are not as motivating as tangible awards. I know that’s counterintuitive, but here’s what the research says. People use small amounts of cash—in fact anything less than $1,000—on paying their bills. Nothing very memorable about paying the gas bill. But it’s amazing how hard people will work to get a new set of golf clubs, jewelry, a trip, or some other tangible award. Psychologists will tell you that people will always say “give me the money. I don’t care if it’s 5 bucks, I want the cash.” But in reality we are not motivated by small amounts. We are motivated by seeing ourselves playing with that new set of clubs, wearing that jewelry or taking the trip.

Morris: Recent research conducted by highly reputable firms such as Gallup and Towers Watson (formerly Towers Perrin) indicates that workers rank “feeling appreciated” among the two or three attributes most important to them. Moreover, a high percentage of highly valued employees indicate, during exit interviews, one of the major reasons to accepting a position elsewhere is that they do not feel appreciated. Here’s my question. Why do so many workers feel under-valued, if valued at all?

Gostick: Why? Because we as managers are so bad at appreciating great work. We are. First, we get so wrapped up in our own work, meeting customer requests, doing what our bosses want, that we forget our primary role is to motivate and engage our team. The ten people we manage can get a lot more done than we can if we only would appreciate more. Second, we think we are pretty good at recognition already. Our research found that 67% of managers believe they are above average at appreciating great work, but only 23% of employees agreed that their boss’s were good at this. That’s a huge gap in perception!

Morris: To what extent (if any) do the most prestigious business schools at major universities (such as Harvard, Northwestern, Michigan, Dartmouth, MIT, and Pennsylvania) prepare executives to provide the recognition and appreciation that all workers crave and few receive?

Gostick: We’ve been asked to speak at several large business schools lately because more educators are realizing this is a gap in their curriculum. However, with that said, few business schools really teach the new generation of MBAs how to serve their people, how to be compassionate, how to communicate effectively. I hear more and more that these newly minted MBAs come out very smart, able to balance a ledger, but with little idea how to motivate a team.

Morris: Now please shift your attention to The Carrot Principle. What promoted you and Chester Elton to write it?

Gostick: We’d been working with some of the world’s best organizations for almost twenty years, putting in place employee engagement and recognition programs. We knew anecdotally that recognition done well could impact a company’s bottom line, but we didn’t have the statistical proof. We conducted a 200,000-person study for that book, and what we found was that once we had the stats, leaders were much more willing to listen to our ideas.

Morris: Since its publication, has the percentage of leaders worldwide who practice recognition with their employees increased, decreased, or remained about the same? Why

Gostick: The book has sold more than half a million copies worldwide and has been adopted by some very large organizations as a Bible of how to treat their people, so I certainly hope we’ve helped. Every year we host a “Carrot Summit” during which business leaders share their success stories of using these ideas, and it’s wonderful to hear how real businesses have shaped their programs from the words we wrote.

Morris: In the Introduction to the second edition (published in 2009), you identify four types of executives: Positives, Fearful, Controllers, and Negatives. Here’s a two-part question: What are the dominant characteristics of each, and, what was each category’s percentage of the total number of people who participated.

Gostick: Here’s what we found from the managers in the survey. Only 26% of leaders are Positive on recognition. They practice this with their employees whether or not they’ve been giving permission and tools from their HR group. The next set of managers (22%) are Fearful of recognition. They want to recognize, but haven’t been given permission from senior leadership to spend any money or do anything out of the norm so they are paralyzed by fear. The next group (20%) are what we call Controllers. They are worried about the human elements of recognition—the jealousies that might occur if they recognize Bob and not Sue, so they do nothing. The last group (a whopping 32% of managers) are Negative on recognition. They add such pearls of wisdom to the leadership lexicon such as “they get recognition every two weeks in their paychecks, don’t they?” This group of managers was by far the least productive.

Morris: What is an “accelerator” and why is one needed?

Gostick: We found that recognition couldn’t make these lousy managers better. They were simply distrusted. However, we found that good managers could use recognition to make everything they were doing better. Recognition in the research was shown to increase the perception of open communication, trust, goal-setting, accountability, teamwork, etc. Appreciating great work accelerated performance. It just makes sense, and now we have the research to statistically prove it.

Morris: Three-part question. First, what are the “Basic Four” foundational building blocks of effective leadership and management? Which seems to be the most difficult to develop? Why?

Gostick: When we did correlation studies on great teams, we found managers received high marks for recognition, but also for four other leadership characteristics: goal-setting, communication, trust and accountability. We came to call them the Basic Four of Leadership because they are so foundational to success. Each is hard to master in its own way: It’s easy to set goals, but hard to provide clarity around goals. It’s easy to communicate, but hard to be open and honest and consistent. Trust is hard to build and maintain, but it is essential in every business relationship. Accountability is also difficult, because we typically see it as a negative. One employee put it this way: when I make a mistake I’m recognized 100 percent of the time, but when I do something great I’m not recognized 99 percent of the time. In the great teams we studied, managers turned that 1 percent recognition into 5 percent, 10 percent, 20 or higher.

Morris: As you know, Henry Chesbrough has much of value to share in two books, Open Innovation and Open Business Models, about organizational values such as clarity, accessibility, transparency, receptiveness, and trustworthiness. Are these not among the same principles that effective leaders and managers also follow?

Gostick: Absolutely! In fact they are captured in our research findings we call the Basic Four. You must provide clarity of goals. You must be accessible, transparent and receptive to new ideas if you want to build a strong communication culture. And you must be trustworthy.

Morris: Please explain the terms “Altruist” and “Expector.”

Gostick: This is kind of funny. We found a large group of managers who provided recognition to their employees with the “expectation” of something in return, typically harder work. Employees saw through this motivation. However, we found a group of managers who “altruistically” recognized their people for great work because it was the right thing to do. This group of managers saw much better results and had much higher employee engagement scores. So, it does pay to recognize, but you must have good motives.

Morris: To what does the acronym “SAIL” refer? Significance?

Gostick: We found great managers told stories when they recognized. They talked about the Situation they faced, or the problem. They mentioned the Action the employee took to resolve the situation. They talked about the Impact the employee made by taking ownership, being innovative, resolving the customer issue, etc. And finally, they Linked it to the core values of the organization. It’s a great way to make recognition meaningful.

Morris: You seem to agree with Thomas Edison that “vision without execution is hallucination.” In Appendix A, you provide a “Recognition Effectiveness Model.” How does it help to measure the total impact of recognition initiatives? Can it also measure the impact of each individual “carrot”?

Gostick: I love that quote from Edison! What we found in our research is that most company strategies are eerily familiar. We like to think we’ve all invented the iPod and we are markedly different from our competitors, but in truth most customers can’t tell our products apart. What differentiates us is our employees. If they are engaged they will execute on your plan. Anyone can have a plan or vision, but only the great companies sustain high-impact execution.

Morris: Now please shift your attention to The Orange Revolution. The focus is on teams rather than on individuals. What are the dominant characteristics of a “breakthrough team”?

Gostick: We conducted a 350,000-person study for this book, and we found great teams tend to make three big commitments together: that they will Wow or deliver world-class results; they will have No Surprises on their team, and will strive for open communication and honest debate; and finally they will Cheer or root for each other.

Morris: What must a CEO do to assemble, charge, empower, and support a group to become a “breakthrough team”?

Gostick: First, each team or work group must understand with great clarity their cause—what are they tasked with accomplishing? Second, leaders must understand that teams take time to gel, but once they do they should be kept together longer (it is a fallacy that team productivity drops after a few years).

Morris: It may be theoretically possible but, in fact, is it likely that any group of workers in a given organization can become a “breakthrough team”?

Gostick: We went inside organizations of all sorts for the book—manufacturing, service, high-tech, medical—and we found great teams in even the harshest environments.

Morris: All of the insights and recommendations that you and Chester provide in the Carrot books are evidence-driven. For example, you cite research involving the 350,000-person database of the Best Companies Group (BCG) that revealed “five response areas [that] are most likely to indicate an employee is feeling engaged on his or her team.” What are they areas or indicators? What differentiates engaged employees from those who are not?

Gostick: According toe results of our teamwork study, an engaged employee is willing to work an extra shift or take on an extra project when asked, to recommend the company’s products to friends, and recommend the company as a place to work. An engaged employee reports overall satisfaction with the working conditions and indicates a desire to continue the relationship for at least two more years. Engaged employees, in short, care. They take ownership of problems and feel vested in the company’s success.

Morris: Please explain the meaning and significance of Chapter 5’s title, “Wow: Six Secret Ingredients to World-Class Results.”

Gostick: Every team wants to create great results. No work group starts out wanting to be average or poor. But only 20 percent of work teams are operating at anywhere near their optimal capacity. We wrote about the six traits great teams demonstrated in wowing each other and their clients every day. Some are hard-hitting such as taking risks and measuring their success, but others are rather soft but essential, such as telling stories about their values and how they’ve succeeded together.

Morris: What is the “No Surprises Rule” and what are the most serious consequences if it is violated?

Gostick: I think we’d all agree most surprises in business are unwelcome. We never get the surprise that the delivery team found a package of unmarked twenties in the warehouse and we’re going to make our quota after all! Most surprises are: “What, you wanted the package to arrive today?” or “I didn’t know you wanted that report this week.” Great teams vow not to surprise each other. They are brutal about communication and are open with each other to a fault.

Morris: Bill George has much of value to say about authenticity in two of his books, Authentic Leadership and True North. I recalled his insights as I worked my way through Chapter 7, Cheer-Up. Why do you so strongly recommend cheering in the workplace and how to ensure that it is authentic celebration rather than a meaningless gesture?

Gostick: I had a chance to meet Bill George (I call him Bill now) a few weeks ago. He then spoke for an hour and half at our Carrot Summit and almost the entire time he spoke about rooting for the members of your team. Here’s a guy who built up Medtronic into a worldwide force with a soft word, not a stick. If you know your core values, really know them, and recognize just behaviors that reinforce those values, it’s much easier to be authentic.

Morris: In Chapter 9, you offer 101 tips on how to establish and then nourish a culture of teamwork throughout the given enterprise. In your opinion, what is the best role for the manager and senior leader while creating esprit de corps at all levels and in all areas, whatever the size and nature of the organization may be?

Gostick: The most important thing about the Orange Revolution is that it takes only the lightest touch by a leader to maintain success. To facilitate this type of team, motivated and skilled leaders: Ensure the right people join, help employees understand the big picture and their collective role, facilitate rule setting, and promote a culture of appreciation. That last idea is key: a leader’s job is to appreciate and drive camaraderie. It’s a far cry from the list most leaders draw up when asked about their duties.

Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?

Gostick: Perhaps something about the personal impact of this idea. We have been very pleased to have moms and dads, soccer coaches, clergy, and others tell us they have been using this idea to build stronger teams in their personal lives. The ideas of wow, no surprises, and cheer also build stronger families, relationships and communities.

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Adrian Gostick and Chester Elton cordially invite you to visit http://carrots.com/ and follow their blogs at http://adriangostick.com/ and http://chesterelton.com/.