As Chip Conley explains in the Preface, "This book is about the miracle of human potential: employees living up to their full potential in the workplace, customers feeling the potential bliss associated with having their unrecognized needs met, and investors feeling fulfilled by seeing the potential of their capital leveraged." I agree with him that all great leaders know how to tap into this "potential" and actualize it into reality." Moreover, I also agree with Conley that great leadership can - and should - be found at all levels and in all areas of an organization. So, what motivations do people need to achieve peak performance, especially in collaboration with others? In this volume, Conley responds to that question, suggesting that there are many valuable lessons to be learned from Maslow's "Hierarchy of Needs." For present purposes, it can be abbreviated as follows:
With regard to the first two, I am reminded of a time when Ralph Waldo Emerson delivered a lecture on transcendentalism in Concord (MA) and then agreed to answer questions. A farmer stood up: "Mr. Emerson, how do you transcend an empty stomach?"
Maslow believed that the hierarchy of human needs is best understood when viewed as a triangle, with basic needs (food, shelter, clothing, etc.) at the base. As those needs are at least partially fulfilled, we ascend the pyramid to higher needs (e.g. security, stability, social connections, affiliations), fulfilling them along the way. As Conley explains, "At the top of the pyramid is self-actualization, a place where people have transient moments called `peak experiences'...A peak experience -- comparable to being `in the zone' or in the `flow' - is when ought to be just is." Or as Maslow himself suggests, "They are moments of ecstasy which cannot be bought, cannot be guaranteed, cannot even be sought...but one can set up the conditions so that peak experiences are more likely, or one can perversely set up the conditions so that they are less likely." However, as the Concord farmer reminds us, basic needs must first be filled. That is as true of individuals (who fear being terminated) as it is of a company's owners (who may have no choice but to file for Chapter 7).
In this volume, Conley offers a step-by-step process by which to build a great company. After acknowledging Maslow's influence on his thinking (and in process explaining Mallow's core concepts) in Part One (Chapters 1-3), he examines three "relationship truths." In Chapters 4-6, he explains how to create base motivation, loyalty, and trust for employees. In Chapters 7-9, he explains how to create satisfaction, commitment, and "evangelistic" fervor for customers. And then in Chapters 10-12, he explains how to create trust, confidence, and pride of ownership for investors. In Part Five (Chapters 13 and 14), Conley explains how to coordinate the three separate but interrelated "relationship truths" to create a "self-actualized life" for each of those involved. Although that may prove to be an unrealistic goal, it is worthy of pursuit nonetheless. Whereas a mountain has a finite height, Maslow's pyramid does not. No individual and no organization can ever become fully actualized. There will always be room for improvement because achieving one goal creates opportunities to achieve others. Revealingly, Conley describes himself as a Himalayan Sherpa who guides his reader to up to the summits of Nepal or Tibet. What he implies is that his role has another, in my view more important function: To guide his readers to insights that will enable her or him to chart a proper course when embarked on a never-ending journey from one peak performance to the next.
This is also true of a company whose culture that must constantly adjust to both internal changes (e.g. its workforce) and external changes (e.g. in its competitive marketplace) while in pursuit of greatness. Consider these comments John Kotter and James Heskett share in Corporate Culture and Performance that suggest a causal relationship between a strong culture and peak performance: "Corporate culture can have a significant impact on a firm's long-term economic performance. We found that firms with cultures that emphasized all the key managerial constituencies (customers, stockholders, and employees) and leadership from managers at all levels outperformed firms that did not have those cultural traits by a huge margin. Over an eleven-year period, the former increased revenues by an average of 682 percent versus 166 percent for the latter, expanded their work forces by 282 percent versus 36 percent, grew their stock prices by 901 percent versus 74 percent, and improved their net incomes by 756 percent versus 1 percent." My guess (only a guess) is that in all of the peak performance companies, the words "culture" and "character" are synonymous.
It is no coincidence that, year after year, many of the same companies on Fortune magazine's list of those that are "Most Highly Admired" are also among those most profitable. However, as we all soon learn once embarked on a business career, there is a "bottom line" to an individual's personal character as well as to an organization's financial performance. Maslow suggests that when reaching the summit of self-actualization, there is a recognition that "this is the real me." Bill George calls this one's "True North," "the internal compass that guides you as a human being at your deepest level. It is your orienting point - your fixed point in a spinning world - that helps you stay on track as a leader. Your True North is based on what is most important to you, your most cherished values, your passions and motivations, the sources of satisfaction in your life. Just as a compass points toward a magnetic field, your True North pulls you toward the purpose of your leadership."
Self-actualization awaits each person who reads this book. Let the journey begin. Bon voyage!
Many people who try to do good while doing well think in terms of Abraham H. Maslow's famous hierarchy of needs (proceeding from physiological needs like for food and water to safety needs to relationship needs to esteem needs and finally to self-actualization -- living as one wants to be). The basis for thinkers like David Wolfe, Raj Sisodia, and Jagdish Sheth in Firms of Endearment shares that perspective.
Chip Conley takes that familiar perspective into new territory by describing how he applied the concept to employee, customer, and investor needs in building his Joie de Vivre, his boutique hotel management company. Employees get money, recognition, and meaning from their work. Customers receive what they expect, have their desires fulfilled, and are pampered by gaining what they don't recognize they want. Investors engage in a relationship that's established in the right way, enjoy a positive relationship with those who run the company, and help establish a legacy through their investment. By putting all three hierarchies in place, you can create a unique corporate culture, develop an enthusiastic set of employees and managers, build customer loyalty, and maintain a profitable business.
This way of describing the book makes it seem very academic, but that's not true. Mr. Conley is a hands-on manager who loves nothing better to develop boutique hotels that nicely fit a small psychological segment of mostly affluent travelers. He uses specialty magazines to identify his targets.
The book is as much about how he arrived at this set of conclusions as what the conclusions are. While Silicon Valley was booming, his San Francisco-area hotels were doing great. But when the dot-com bust hit, these hotels suffered along with the rest of the market. Years of no salary, unhappy investors, and putting up lots of his assets followed. It's an engaging story just for how to do a difficult turnaround under trying conditions.
I see a few other dimensions that Mr. Conley might add in future books:
1. What about doing a similar set of hierarchies for other stakeholders such as suppliers, lenders, partners, neighbors, and the communities in which you operate?
2. What about creating a strategy independent of the hierarchies that will provide superior performance in good times and bad?
3. Describing the special problems of publicly held companies and how they can implement such a program.
4. How to use the hierarchies to make continuing business model innovations.
5. Case histories of others following his advice.
I look forward to seeing those elements added to this fine work.