The PEAK Perspective
What’s the most neglected fact in business? It’s that we’re all human and, based upon our particular role, we have various needs we’re looking to fulfill. What’s your operating manual for addressing these human needs? That was the question Joie de Vivre Founder and CEO Chip Conley faced when he saw his company, the largest operator of hotels in the San Francisco Bay Area, get rocked by the combination of the dot-com crash and 9/11 tragedy in the early part of the new millennium. At the bottom of that economic downturn, Conley reacquainted himself with Abraham Maslow’s iconic Hierarchy of Needs theory. Maslow suggested that all of us have universal needs at the base of our human motivation pyramid and that as those needs are partially met, higher needs emerge up to the peak of the pyramid where self-actualization is the pinnacle of human experience (later in his life, Maslow renamed this self-transcendence). Conley reinterpreted Maslow’s five-level pyramid into three key themes of Survival, Success, and Transformation in what has become known as the Transformation Pyramid: a paradigm for looking at your life and your business. And, his company, Joie de Vivre applied these three themes to their most important stakeholders: their employees, their customers, and their investors. When Conley saw that this PEAK approach to business made a big difference for his company, he started researching how other companies from Apple to Harley-Davidson have used Maslow as a foundation for how they operate, and, from that, he wrote the book PEAK which is now used in companies throughout the world. The key messages of PEAK come back to some of the essential messages of Abraham Maslow and positive psychology:
- Companies are full of people and people can be influenced by the “psycho-hygiene” of an organization.
- Creating a great culture is the best way for a company to inoculate themselves against the contagion of fear that particularly runs rampant in a recession.
- Most companies and leaders get preoccupied with managing what they can measure, which is usually the tangible, commodity-driven stuff at the bottom of the pyramid.
- PEAK leaders address those base needs but they inquire about the higher needs of those they are trying to engage also, whether it be their employees, customers, or investors.
Moving from being a successful company to being a transformative organization requires a quantum leap that moves beyond the conventional approach to business. PEAK provides an organizing principle and language that helps leaders address the higher needs that can help a company move beyond being a commodity. Focusing on the web of relationships an organization has both internally and externally (i.e. employees, customers and investors), Conley developed the “Relationship Truths” model. This foundational framework comprised of three pyramids, acts as a roadmap to deepening relationships with your stakeholders for increased business performance.
The premise behind the Employee Pyramid comes back to the idea that each of us in our work either has a Job (survival), a Career (success), or a Calling (transformation). While employers often think that the number one motivator for their employees is Money (the base of this pyramid), the reality is that the primary reason people leave their job is due to the lack of Recognition they feel from their boss, their co-workers and the company. When someone moves beyond Money and Recognition as their primary motivators and, instead, sees their work as giving them a sense of Meaning, they have moved from external motivation to the internal motivation that comes from a calling. There is no more powerful influence in someone’s work than that sense of living one’s calling in what you do.
One fundamental rule about humans (and customers) is that disappointment is the natural result of badly-managed expectations. The “survival” experience on this pyramid revolves around the question of whether the company delivered on the basic expectations of the customer. But, just meeting a customers expectations only creates satisfaction and, in the era of the internet with promiscuous customers, satisfaction isn’t enough. A step above that which creates a customer who feels successful is when their desires are met. But, the world’s most admired companies create evangelists out of their customers, not because they’ve delivered on their expectations or desires, but because they addressed the “unrecognized needs” of the customer. It’s almost like the company knew the customer better than they knew themselves and that’s what leads to big-time word of “mouse.”
The biggest challenge with applying Maslow’s theory of human motivation is convincing yourself that all investors are human. While investors often are seen as robots who are only focused on profits and the bottom-line, they have a collection of other needs as well and great companies and entrepreneurs are able to use this pyramid to understand the survival needs (having transactional alignment on the business plan) and the success needs (having relationship alignment with the recognition that this is a long-term collaboration). There are investors who feel self-actualized as a result of putting their money where their heart is. We call these legacy investors and they have pride of ownership associated with making an investment that has returns or results beyond their own personal needs.