Private Equity investors face several unique human capital challenges from assessing senior leaders to building the alignment and skill required to execute on strategy. Perhaps foremost among these challenges is recruiting and retaining top talent for the unique needs specific to each company within the portfolio.

A common approach to recruiting and retaining talent relies on extrinsic motivation. Extrinsic motivation refers to behavior that is driven by external rewards. These rewards can be tangible, such as money, or intangible, such as praise or fame. The tools of extrinsic motivation include salary, bonuses, stock options, titles, promotions, and public praise and honors.

In the 1940’s the psychologist Abraham Maslow posited a 5-layer hierarchy of human needs:

Blog 24 Hieracrhy | BrainWorks

The bottom three are what Maslow called “deficiency needs” – biological needs that must be fulfilled from outside. These are the basis of extrinsic motivation. The top two, called “growth needs,” are of a different order. Maslow said that no need can be attended to until all the ones below it are satisfied. Maslow’s formulation is widely accepted today, particularly as regards the need to satisfy deficiency needs before growth needs can be entertained.

Business organizations have, in large part, not caught up with the fact that extrinsic motivation does not meet the needs at the top of the pyramid. The reason for this is that with extrinsic motivators, there is such a thing as enough. Enough money, enough food, enough praise, or fame. When that point is reached, extrinsic motivation loses its power. You might be able to teach an old dog new tricks, but you won’t train a dog using treats if the dog is not hungry.

There is a powerful alternative to extrinsic motivation. In his 2009 book Drive: The Surprising Truth about what Motivates Us[1], management writer Dan Pink makes the case that when extrinsic motivators are off the table, intrinsic motivators take over. Specifically, these three:

  1. AUTONOMY: Pink says “This era doesn’t call for better management. It calls for a renaissance of self-direction.” The Covid pandemic has shown that people working from home, connecting remotely, and to a great extent setting their own hours has increased rather than decreased productivity. Clear tasks, self-direction with regard to time, greater decision latitude all provided the freedom that leads to increased innovation and results.
  2. MASTERY: As an investment firm CEO said, “our people want to learn. They want to be told the ‘why’ of our expectations and ‘what’ outcomes to produce. When we leave the ‘how’ to them, they work better, faster, and more creatively as they figure out the route to get there.
  3. PURPOSE: Human beings seek purpose – they are driven to have what they do be meaningful in some larger context and to contribute.

By providing autonomy, opportunities for mastery, and clear purpose in addition to profit and direct reward, leaders won’t have to “retain” or “recruit” talent – talent will come and stay.

[1] Pink, Daniel Drive: The Surprising Truth about what Motivates Us, 2009, Riverhead Books, New York, NY



BrainWorks is a prominent boutique executive search firm offering a 29-year track record of successfully sourcing and placing top talent. By harnessing proven strategies, collaborating with stakeholders, and leveraging a diverse and talented candidate network, BrainWorks helps businesses find, attract, and ultimately hire talented professionals that create differentiated results. To learn more about how Brainworks can help you, contact us.

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