PEAK: How Great Companies Get Their Mojo from Maslow
by Debra Black
How does a company with 3300 employees and $250 million in total revenues succeed while spending less than $50,000 a year on advertising? On October 14, Chip Conley told members of the Retail Consortium for Management Education (RCME) how it's possible.
"What's the most neglected fact in business?" asked Conley, the founder of Joie de Vivre Hospitality, the world's second largest boutique hotelier. "It's that we are humans. That's something that we forget about."
Conley explained that an operating manual exists for relating to the humans in any organization: Abraham Maslow's Hierarchy of Needs pyramid. One of the most famous psychological theories of all time, it traces the ascension of Physiological/Safety/Love: Belonging/Esteem/Self-Actualization needs. The pyramid provides a roadmap for understanding how humans think and behave and how we're motivated.
"Great companies are able to move their employees up this pyramid," said the author of Peak: How Great Companies Get Their Mojo from Maslow. And that influences whether we consider our relationship with our work to be a job, a career, or a calling.
"It's simple. Create an environment where your employees are happy. It makes sense but most companies don't do this, or they lose track of it. The silver bullet is how you create the deepest loyalty in your industry…with employees, vendors, community, all your stakeholders," said Conley.
"A key, basic premise in life and business is this: It's all about where you pay your attention. It has an awful lot to do with the results you get," said Conley. Maslow is famous for human potential and the phrase, 'If the only tool you have is a hammer, everything starts to look like a nail.'
"Most companies focus their attention at the bottom of the pyramid. They focus on survival needs, and they don't focus on things above that. And this is particularly true in a recession," he said. At a time when he was trying to make payroll, Conley overcame the economic downturn by applying the Hierarchy of Needs to his company's business practices.
He began to wonder, if humans can self-actualize, why can't companies?
"Just like humans, there are companies that are more fulfilled or living up to their potential than others," he said. "Just creating satisfaction does not create a loyal customer. The top of the pyramid is where companies create evangelical customers…customers who love the company and tell the world about it," he said.
Conley and the RCME group identified several top companies with evangelical customers: Southwest Airlines, Apple, Zappos, Trader Joe's, Whole Foods, Prius, Facebook, U.S. Army, and Harley Davidson (with some 25,000 logo-tattooed customers).
"Great leaders are basically in the business of visualizing potential and actualizing it into reality. Who is better than Steve Jobs at visualizing the potential of tech products and what customers are looking for, even before customers ask for it?" asks Conley.
"Be all you can be"
Conley says that finding one's calling is not about learning to do a task better; it is found by looking at one's purpose and its impact. Southwest Airlines is well known for wanting its employees to live their calling and actually love what they do. The company succeeds with a decision-making strategy that takes into account the employees who face customers every day, with a focus on helping them succeed.
"The top of the pyramid is where something magical happens. When employees are focused on their calling, they are living in a different state. When you're being internally fueled, it's a whole different state of being. It's having a sense of meaning in what you do," says Conley.
The Joie de Vivre Experience
Conley took the idea of the hierarchy of needs pyramid and applied it to the Joie de Vivre Hospitality customer experience by creating a culture of recognition and loyalty and by addressing the top of the pyramid.
"It's all about relationships. The middle of the pyramid is where a successful relationship is created, but the peak of the pyramid is where loyalty is created. The top of the customer pyramid is transformational; it meets unrecognized needs not even known by the customer. Help your customers meet their highest goals. Give your customers the ability to truly express themselves. Make them feel like they're part of a bigger cause. Offer them something of real value that they hadn't even imagined," said Conley.
"Boutique hotels are mirrors for the aspirations of their customers," he said. Boutique hotels are very niche and lifestyle oriented, a little smaller, stylish, with a personality. "We have a lot of repeat, loyal customers."
Every time Joie de Vivre Hospitality creates a new hotel, it uses a magazine as an organizing principle. Nearly 23 years ago, Conley created the Phoenix Hotel in San Francisco, which is based on Rolling Stone magazine ("funky, adventurous, cool, irreverent, young at heart"). It became an international sensation as 'the rock and roll hotel' appealing to artists and entertainers. "The magic is that the type of customer who started to show up was funky, adventurous, cool, irreverent, and young at heart."
The Hotel Rex in Union Square attracts a different customer than the Phoenix. Based on The New Yorker (literate, artistic, clever, worldly, sophisticated), "there's a collection of people who love that hotel," said Conley. With Wired magazine as its touchstone personality, Hotel Avante in Mountain View ("smart, techy, creative, visionary, iconoclastic") draws people associated with Google.
"If you create a really compelling product, people will flock to it. 'Word of mouse' people will tell each other through social media. People spread the word for you," he said. "What do you do to deliver on your customer's desires better than your competition does?"
Three final lessons
Conley offers three final, simple lessons for these challenging times:
1. Culture is your most valuable asset. A company's culture is like a pond—what kind of ripples are being created? In a bad economy, focus on what you can control and on small victories. Fear is the number one contagious emotion in organizations today.
2. Dare to be different with your customers. Get the basics right (like good plumbing in a hotel) but don't become purely a commodity in a recession, as you'll lose any pricing power you have. Focus on your customer's higher needs.
3. Address your employees' survival needs, but remember that helping your people move from job to career to calling will serve both them and your business well.