How to Find Your PEAK in a Trough.

Most of us learned about Abraham Maslow’s Hierarchy of Needs (H.O.N.) in our Intro to Psychology class. I only took one Psych class in college, but I remembered Maslow years later as the guy who focused on best practices in human behavior, not worst practices. He studied one thousand super-accomplished people from both the mid-20th century as well as historically. He found some commonality in their stories about lower needs that, when partially satisfied, opened up the possibility of higher needs. Later in his life, he was working with a company in Menlo Park, CA, (near where I went to college just eight years later), on how to adapt his iconic theory of motivation from individuals to the collective or companies. And, then, sadly, he passed away prematurely at 62.

More than thirty years later, when my boutique hotel company was facing potential ruin due to the combination of the dot-com bust, 9/11, a recession, and SARS, I dusted off my Maslow book and started channeling his wisdom. His family even gave me his diaries from the last ten years of his life. And I went on to write PEAK at the Esalen Institute in Big Sur, CA, where Maslow spent many of his final years.

There are a few core principles that define the book that are relevant today:

1. If you distill Maslow’s 5-level pyramid to 3 themes, it’s Survival (based upon Maslow’s two base needs: physiological and safety), Success (based upon levels three and four: social/belonging and esteem needs) and Transform (congruent with the peak of the H.O.N., self-actualization). I call this adapted 3-level pyramid the Transformation pyramid.
2. You can then apply this Survival-Succeed-Transform paradigm to your most important stakeholders. In our case, that was our Employees, Customers and Investors.
3. The Employee pyramid (starting from the bottom) can be defined by Money-Recognition-Meaning with those three levels corresponding to someone feeling their work is a Job-Career-Calling. Great companies move their employees up that pyramid from feeling base motivation to being loyal to truly feeling inspired. Unfortunately, in a serious downturn, most companies get fixated at the bottom of the pyramid and don’t look at the ways they can create recognition or meaning for their employees. The base of the pyramid is a commodity. The peak is where differentiation and loyalty exist.
4. The Customer pyramid is all about what needs you’re meeting: Expectations-Desires-Unrecognized Needs. You move from customer satisfaction to evangelism as you move to the peak of this pyramid, but don’t expect your customers to tell you their unrecognized needs. This is why Steve Jobs suggested: “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” So, becoming a PEAK leader means mind-reading your customers. I highly recommend you create your own customer pyramids during this time when you need to understand your customers better than they understand themselves.
5. The Investor pyramid was the most surprising of the three. I laughed when I once said, “Are investors really human and what are their needs?” Their base need is Transactional Alignment, making sure everyone is on the same page regarding the business plan and what defines success. The middle need is Relationship Alignment which means the investor is less focused on short-term performance and more on building a long-term relationship with an entrepreneur or business leader. Warren Buffett is a great example of this kind of investor. Finally, a “self-actualized” investor focuses on Legacy and is mission-aligned. They put their money where their heart is. In a downturn, you’ll get a sense of what kind of investor(s) you have. If you have a long-term oriented business (3rd level), but with transactionally-focused investors (1st level), you have a serious problem and you need to seek alternative investors at a very vulnerable time.
6. Lastly, the holistic glue in the center of this PEAK model comes from the Harvard Business School’s “Service Profit Chain” theory that shows a company that invests in a great culture creates employee satisfaction which creates customer loyalty that leads to market share growth and sustainable profits that allows the company’s investors to invest back in the employee culture. As Whole Foods Markets founder John Mackey says of this model, “It’s a virtuous circle.”

I’m not sure I’m doing this elegant and profound business model justice in a short blog post, but I will follow up with posts the next two days on how to embody being a PEAK leader. All I know is creating this model, and then using my company as a living laboratory allowed Joie de Vivre Hospitality to triple its revenues between 2001 and 2006 when our competitors were going bankrupt and in default to their banks. So, I know it can work in a downturn. I hope you find it helpful.