Current management practices focusing on the bottom line and short-term profits are misguided and short-sighted. Such a premise has been brought to the forefront as we collectively struggle through an economic recession, resulting malaise and conflicting reports of the timing, speed and efficacy of a recovery. These are current events, but it was not very long ago that the dot com boom and bust roiled the economy. Peak: How Great Companies Get Their Mojo from Maslow was conceived of by Chip Conley in the post-dot com bubble, in the midst of a real estate trough that hit hospitality especially hard, especially in the San Francisco Bay area. Published several years later, the book is now three years old. But, the applicability to the current real estate downturn is, unfortunately, as timely as ever. Specifically, the premise of Peak is about our potential as humans and taking the desire for individual self-actualization and applying it to business, which is really just a collection of individuals.
The author, Chip Conley, is the founder and CEO of Joie de Vivre Hospitality, California’s largest boutique hotel company, consisting of over forty hotels, restaurants and spas. He is also the author of The Rebel Rules and Marketing That Matters. Conley’s core philosophies are based on noted psychologist Abraham Maslow’s theories of “the Hierarchy of Needs, self-actualization, [and] peak experiences.” Conley adapts Maslow’s Hierarchy of Needs pyramid to describe a base condition of survival, a middle ground of success and a pinnacle of transformation.
According to Conley, Maslow said “that with humans, there’s a qualitative difference between not being sick and feeling healthy or truly alive. This idea could be applied to companies, most of which fall into the middle ground of not sick but not truly alive.” Conley expands Maslow’s view by stating that Maslow “found that the business world was the most efficient and profound place to reach the greatest number of people.” Conley believes that employees, customers and investors must be placed on equal footing to promote success and foster loyalty, which, quoting Bain & Company consultant Fred Reichheld, is “quite likely the only possible source of sustainable competitive advantage in the new economy.” In other words “companies that cultivate an environment that allows for peak individual performance are rewarded with peak company performance.”
Conley supplements his writing with recommended reading at the end of each chapter. Again, some of the recommendations are several years old, yet still relevant. Others are timeless, like Maslow’s books themselves. There is little doubt that the world has gone through a behavioral change-inducing crisis through this downturn. What is less certain, however, is how long this possible lurch towards Maslow’s self-actualization pinnacle will continue.
Real estate is cyclical and memories are short, but psychological dogmas can hold true for eons. Unfortunately, the recent past tells us that we are likely to return to behavioral practices. That being said, however, the Great Depression changed consumer behavior for several generations, and the Great Recession may yet do the same.