Archive for the ‘Conscious Capitalism’ Category
Creating PEAK experiences for Strangers
Monday, October 8th, 2007One of the most basic tenets of corporate marketing is that a company should focus its promotional investment on its target market. In other words, market to those who are most likely to buy from you. Seems simple enough and, having run a niche-oriented boutique hotel business for more than two decades, I can say that this focused approach creates great bang for the buck.
But, I want to share a story with you that may shift your thinking from being a marketing mercenary to being a marketing missionary. A marketing mercenary focuses on the return on investment (ROI) associated with marketing to their target market. 95% of what my company, Joie de Vivre Hotels, does fits this category. But, every once in a while, it helps to throw a “Hail Mary pass” – a marketing promotion that is more about your company’s mission than it is about your product. If you can get this right, you will develop huge long-term benefits because you will create stories, memories, and goodwill that will last longer than any short-term marketing mercenary initiative you and your company could deploy.
Let’s take a step back before I tell you my story. As a devout believer in Abraham Maslow’s Hierarchy of Needs, I know that what engages the human spirit most is what’s at the peak of his pyramid: self-actualization, that transformative feeling when what ought to be, just is. For an employee, that’s when you feel that you are being “all that you can be” and you are getting great meaning or inspiration from your work. For a customer, that’s when experiencing a product or service gives you that transformative effect of “it doesn’t get any better than this,” or as MasterCard calls it, that “priceless” feeling that is truly intangible. Any company that can do this will create evangelistic customers as you see with those who are part of the Apple or Harley-Davidson flock. Companies that create “peak experiences” for their employees and customers naturally engender greater loyalty. These companies have much lower employee turnover and tend to spend far less in marketing. Fortunately, Joie de Vivre has employee turnover that’s one-third the hospitality industry average and our $200 million company spends less than $50,000 annually on print advertisements for our 40-50 hotels, restaurants, and spas. So, I guess we “get it.”
Creating peak experiences for employees and customers is a no-brainer. You gotta do it. But, recently, we created a peak experience for a bunch of strangers – albeit strangers who had something in common with each other and the company. To celebrate the 20th anniversary of Joie de Vivre, we invited 10,000 people (I’m assuming mostly women) from the state of California with the name “Joy” to a JOY PARTY at our luxurious Hotel Vitale on San Francisco’s waterfront. Our company has spent 20 years understanding the significance and responsibility of having a name associated with such a positive emotion so we thought it would be provocative to invite these women together to share their experience of living with this name their whole life. Excuse the pun, but we ended up with a roomful of joy (or Joys) — 125 women sharing the name with dozens and dozens of husbands, significant others, friends, children and even a few media there to capture the occasion. What was miraculous was how these strangers bonded in their storytelling so quickly. As if they were long-lost friends. It was remarkable how much they had in common and how many of these women had gone into the service or helping professions. One who received a special award from Joie de Vivre that night talked to the group about the Seeds of Joy non-profit she’d created to help facilitate more poetry therapy in the world. Others spoke of how their name was a daily reminder of their purpose in life (something we often talk about in our company – why not name your company after your mission statement?!). It was one big “joy bubble.” Lots of tears of joy flowing. For the couple of dozen Joie de Vivre employees who came to the event, it was truly a highlight of their time with the company to see that we could conceive of and create such an event that brought what will be a lifetime memory to these women. And, since the event, we’ve shared many of the emails and letters we’ve received from these Joys with our employees (25 Joys received a free hotel room at the Hotel Vitale so they could have a Joy slumber party).
Creating a peak experience for a stranger? A waste of marketing dollars? I don’t think so. While I think it could be dangerous to allocate the majority of your marketing funds to a missionary event like this, I also believe that the word-of-mouth (which has been huge for our JOY PARTY) and internal and external goodwill that comes from this kind of marketing proves that being a “karmic capitalist” pays off in the long-run. Doing good can mean your company will do well. The next time you’re thinking about how to make a splash with your promotions, think about making a difference in someone’s life in a profound way that will serve as a peak experience for them. While other marketing ploys may fade with time, those marketing initiatives that have a deeper mission attached to them will stand the test of time and give you a remarkable long-term ROI.
Creating Peak Experiences for Strangers
Monday, October 8th, 2007One of the most basic tenets of corporate marketing is that a company should focus its promotional investment on its target market. In other words, market to those who are most likely to buy from you. Seems simple enough and, having run a niche-oriented boutique hotel business for more than two decades, I can say that this focused approach creates great bang for the buck.
But, I want to share a story with you that may shift your thinking from being a marketing mercenary to being a marketing missionary. A marketing mercenary focuses on the return on investment (ROI) associated with marketing to their target market. 95% of what my company, Joie de Vivre Hotels, does fits this category. But, every once in a while, it helps to throw a “Hail Mary pass” – a marketing promotion that is more about your company’s mission than it is about your product. If you can get this right, you will develop huge long-term benefits because you will create stories, memories, and goodwill that will last longer than any short-term marketing mercenary initiative you and your company could deploy.
Let’s take a step back before I tell you my story. As a devout believer in Abraham Maslow’s Hierarchy of Needs, I know that what engages the human spirit most is what’s at the peak of his pyramid: self-actualization, that transformative feeling when what ought to be, just is. For an employee, that’s when you feel that you are being “all that you can be” and you are getting great meaning or inspiration from your work. For a customer, that’s when experiencing a product or service gives you that transformative effect of “it doesn’t get any better than this,” or as MasterCard calls it, that “priceless” feeling that is truly intangible. Any company that can do this will create evangelistic customers as you see with those who are part of the Apple or Harley-Davidson flock. Companies that create “peak experiences” for their employees and customers naturally engender greater loyalty. These companies have much lower employee turnover and tend to spend far less in marketing. Fortunately, Joie de Vivre has employee turnover that’s one-third the hospitality industry average and our $200 million company spends less than $50,000 annually on print advertisements for our 40-50 hotels, restaurants, and spas. So, I guess we “get it.”
Creating peak experiences for employees and customers is a no-brainer. You gotta do it. But, recently, we created a peak experience for a bunch of strangers – albeit strangers who had something in common with each other and the company. To celebrate the 20th anniversary of Joie de Vivre, we invited 10,000 people (I’m assuming mostly women) from the state of California with the name “Joy” to a JOY PARTY at our luxurious Hotel Vitale on San Francisco’s waterfront. Our company has spent 20 years understanding the significance and responsibility of having a name associated with such a positive emotion so we thought it would be provocative to invite these women together to share their experience of living with this name their whole life. Excuse the pun, but we ended up with a roomful of joy (or Joys) — 125 women sharing the name with dozens and dozens of husbands, significant others, friends, children and even a few media there to capture the occasion. What was miraculous was how these strangers bonded in their storytelling so quickly. As if they were long-lost friends. It was remarkable how much they had in common and how many of these women had gone into the service or helping professions. One who received a special award from Joie de Vivre that night talked to the group about the Seeds of Joy non-profit she’d created to help facilitate more poetry therapy in the world. Others spoke of how their name was a daily reminder of their purpose in life (something we often talk about in our company – why not name your company after your mission statement?!). It was one big “joy bubble.” Lots of tears of joy flowing. For the couple of dozen Joie de Vivre employees who came to the event, it was truly a highlight of their time with the company to see that we could conceive of and create such an event that brought what will be a lifetime memory to these women. And, since the event, we’ve shared many of the emails and letters we’ve received from these Joys with our employees (25 Joys received a free hotel room at the Hotel Vitale so they could have a Joy slumber party).
Creating a peak experience for a stranger? A waste of marketing dollars? I don’t think so. While I think it could be dangerous to allocate the majority of your marketing funds to a missionary event like this, I also believe that the word-of-mouth (which has been huge for our JOY PARTY) and internal and external goodwill that comes from this kind of marketing proves that being a “karmic capitalist” pays off in the long-run. Doing good can mean your company will do well. The next time you’re thinking about how to make a splash with your promotions, think about making a difference in someone’s life in a profound way that will serve as a peak experience for them. While other marketing ploys may fade with time, those marketing initiatives that have a deeper mission attached to them will stand the test of time and give you a remarkable long-term ROI.
Adam Smith and Abe Maslow: Conscious Capitalism
Sunday, August 12th, 2007If you’ve been following my musings, you know I’ve got a healthy appetite for readin’ and writin’ (not as big of a fan of ‘rithmetic). I particularly appreciate off-beat books that look at business or the world from a unique perspective. That would be a good way to describe Saving Adam Smith: A Tale of Wealth, Transformation, and Virtue, written by doctoral student Jonathan Wight a few years ago. Quite often, the Gordon Geccos (remember Michael Douglas in the movie WALL STREET) of the world use Adam Smith’s “invisible hand” of capitalism to describe the benefits of laissez-faire capitalism. There’s an underlying message that is somehow attributed to Smith – who many see as the father of capitalism: “greed is good” and selfishness helps everyone live up to their true potential and get what they need.
Well, Jonathan Wight did his doctoral studies on Adam Smith and found him to be much more Maslovian in his world view. Consider this passage: “Smith’s model is based upon notions that are intuitive to any parent – that children are driven first by the basic instinct for survival, and beyond that, the basic instinct for approval. Smith takes this one step further, arguing that adults as well as children desire not only pats of encouragement and approval, they desire to be worthy of that approval. People want to be virtuous.” In other words, Wight suggests that Smith believed markets and morals go hand-in-hand and he uses a first person narrator – a fictional economics grad student – who travels across the country with Adam Smith to get his points across.
Here’s an example of a verbal exchange from the book as these two characters meet a third person who describes life in Silicon Valley (while overlooking Big Sur cliffs):
1. “No question, people work hard when their contributions are recognized and rewarded. Stock options are important. But you’ll miss something momentous if you stop there…The secret is this: People work harder when they appreciate themselves for what they have done. When the goal of the enterprise is worthy of their highest aspirations…when you touch someplace deep inside, by having them buy into a dream bigger than themselves. That unleashes the creative spirit, and the mind and heart are integrated. So the company becomes, in a sense, the vehicle for the aspirations of the workers as integrated human beings.”
2. “I thought the company was a vehicle for making profit,” I said remembering Milton Friedman’s and Adam Smith’s injunctions against “do-goodism.”
3. “It has potential for much more than that…when people accept a bigger dream, there’s a remarkable transformation. The workplace becomes alive, dynamic, charged with energy. Profit is the by-product of achieving that higher aspiration.”
So, according to Jonathan Wight, Adam Smith was a “conscious capitalist” just like Abe Maslow. Having written a book about applying Maslow’s “hierarchy of needs” to the workplace and distilling down his five levels of the pyramid to three (survival, success, and transformation), I find it fascinating to read these because #1 basically suggests that employees have base compensation needs (survival) which then move on to their social/esteem needs of recognition (success). But, it’s the meaning/aspirational needs at the top of the pyramid (transformation) that create what Adam Smith might have called an “integrated human being” and what Maslow called a “self-actualized person.”
The next time someone cites Adam Smith as their foundation for why they believe capitalism is based upon the positive virtues of selfishness, please direct them to Saving Adam Smith as Wight passionately pleads for a more compassionate and aspirational perspective on human nature, one that corresponds well with the theories I’ve espoused in PEAK.
Mellow Musings on Maslow
Monday, May 7th, 2007You’re catching me in the midst of a peak experience. Woke up this Sunday morning to the call of a rooster at 5:45 am, sauntered down a cliffside trail–with the crescendo-ing crash of the surf to my right–to find myself alone in a shoulder deep sulphur-infused mineral bath perched precariously above a rocky Big Sur beach. Yes, I’ve made the trek to the Esalen Institute for a one-night getaway with my partner-in-curiosity and best friend, Vanda. Forty-five years ago, myth has it that Abraham Maslow and his wife just happened upon this burgeoning little community just as Maslow was becoming a superstar in the yet-to-be-named human potential movement. The Maslows were a little lost having survived the twists and turns of Highway One’s adrenaline-inducing path. When they innocently dropped in on Esalen looking for a place to stay, they were welcomed like the second coming in a Baptist revival tent. This turned out to be the first of many excursions for Abe to what became known as the most famous spot in the world for personal growth workshops and exploration. Strange irony that I was put in a room in the Maslow building and that there was a workshop on self-actualization going on in the slightly-too-noisy room right next door.
I will have an odd segue later today as I join my YPO (Young President’s Organization) mates in Carmel Valley for a two-day retreat of CEO navel-gazing. Similarly, here’s on odd segue for Esalen: I’m probably the only one down here who brought a Fortune magazine. Of course, I don’t read it in public, but as I was safely ensconced in my bed last night, I was reading the editor’s notes on their annual Fortune 500 issue. Geoff Colvin’s headline was “The 500 Gets Religion: Why Big Companies are in the Business of Solving the World’s Woes.” He starts his editor’s note with my favorite Peter Drucker question, “What business are you in?” (which starts one of the chapters in my new book PEAK, which comes out in September). He goes on to write that America’s biggest companies are remaking themselves, as they used to be in the business of solving people’s problems but now they’re in the business of solving the world’s problems. Colvin ultimately says these companies are doing this partly because the world needs these big solutions, but also because – while he doesn’t exactly quote Maslow – we are transcending the bottom of the human needs pyramid as we’ve become more affluent.
He writes, “Companies definitely aren’t solving society’s problems by taking care of employees the way they used to; we all know the trends in job security, pay, pensions, and health care coverage. But employers are trying to attract and hold employees in a new way that exactly parallels the change in how they’re appealing to consumers; by giving more meaning to their lives. That’s a deep shift in the way companies are managed.” Pinch me. No, harder. Has this Fortune magazine been scrubbed clean by the Esalen “meaning” police?….has the Gestalt Gestapo seized any capitalist reading material and sanitized it with a healthy dollop of Maslow’s meaning musings? Colvin goes on to cite GE’s CEO Jeffrey Immelt as an example of the new kind of business leader who’s as concerned about his employee’s meaning needs as he is about their basic pay package. Colvin writes, “An old-school cynic would respond that such a purpose doesn’t put groceries on the table, and that’s what employees need. But that kind of thinking doesn’t apply as broadly as it used to.”
Fortune meets Esalen….ten years ago, it was unimaginable, but today the new age has gotten practical and 21st century youthful entrepreneurs – who might have been soaking in a hot tub a generation ago – are using the capitalist system to make a difference and make a buck. In other words, they’re making a fortune with the an Esalen mindset. Similarly, the Fortune 500 realize that this socially responsible train is leaving the station and they best not be left behind. I guess it’s not surprising that the subconscious tune I’ve been humming for the past 24 hours has been “Somewhere Over the Rainbow.” A place like Esalen just makes you feel idealistic in that Dorothy on a Kansas farm kind of way (especially when one – that one being me – is tapping on his laptop in the middle of an abundant organic garden overlooking the grand Pacific with a cloudless sun beating upon my back). We’ve come quite a way…exampled by this CEO humming that famous tune…while reading Fortune magazine.
Can You Truly Change the World?
Monday, April 23rd, 2007I’ve noticed those full page ads in the New York Times these past couple of Sundays with the big, bold headline “YOU CAN CHANGE THE WORLD.” While I have a few idealistic friends here in San Francisco who believe in that credo, I didn’t think they had the $100k to fork over for that sentiment in newsprint. Actually, the ads were taken out by Starbucks, which you quickly learn as you scan the page. Being insanely-fearful of a potential coffee addiction–I’ve probably had a half-dozen cups of joe in my adult life–I’m no devotee of Starbucks. But, I will say that I’ve always admired their pluckiness, whether it was the generous benefits they gave employees in an industry where it wasn’t common or whether it’s been their venture into the lifestyle/entertainment genre. Yet, this ad caused a partial scowl on my face. I’m starting to get a little tired of the ubiquity of social responsibility and the marketing machine that’s hitting us over the head with corporate do-goodism.
Maybe I’m just a rebel at heart and love being contrarian. There was a time, not long ago, when I wore a badge of courage by speaking up for the environment or for social justice when I was at some stodgy hospitality conference full of suits. My willingness to speak my mind was equal measures of passion for the cause, my desire to be different, and my joy in upsetting the apple cart of conventional wisdom that surrounded me at these sober conferences. But, today, even Wal-Mart has jumped on the bandwagon as they’re likely to be the largest purveyor of organic products in the world in five years. I’m experiencing serious cognitive dissonance imagining that this transformation happened so quickly. Are there no more bad guys in the business world? That’ll be the day.
OK, OK, I know you’re thinking, “Chip Conley, what has gotten into you? You wrote a book with the subtitle How to Profit Your Business and Change the World” just last year (MARKETING THAT MATTERS). Yes, I did and I truly, deeply believe that the business world has enough power and resources to be the primary initiator of positive change in the world. In fact, if you Google “change the world,” you don’t see any politician or government’s website show up on the first page of results. What comes up is former Apple marketing guru Guy Kawasaki’s blog. You see David Bornstein’s book and website on how social entrepreneurs are making a difference. You sense the earnestness of people’s desire to use private enterprise for public good. And, yet, then, you come across rocker Joan Jett’s Cadillac Story at the top of the Sponsored Links. Once again, how can a big Escalade create a positive change in the world? The ad men are up to their old ways.
So, we have a good problem. PC Pollution (and I don’t mean the personal computer kind). Every business out there knows they need to be perceived as being Politically Correct. Otherwise they risk becoming a stock market dog like Wal-Mart (don’t believe those Bentonville execs went green on us overnight because they saw the light on their own). So, Joe & Mary Customer start getting a little confused. Who should they believe? Is that GAP ad campaign featuring the Red merchandise a good thing because it suggests that a small portion of proceeds goes to a worthy cause? Or is it a bad thing because it’s a crass attempt to get people to buy things they don’t need which just adds more crap to the planet? I don’t have the answer but I do believe we’re likely to see a big shift in the next 5 years which will help Joe & Mary see beyond the PC BS.
The number one change we’ll see in the socially responsible business world will be transparency. It’s already happening as smart companies are opening their books, processes, and boardrooms to activists and journalists to show that they aren’t just bluffing with their ad campaigns. While the stock market world has had social indexes like Domini for years (which has allowed investors to invest in socially responsible companies), the consuming public hasn’t had any “Good Housekeeping” seal of approval that globally says “this company walks its talk.” There are a number of very savvy folks who are in the process of creating those kinds of seals of approval and I welcome them because it will be a nice editor for all the socially responsible advertising clutter we’re starting to see.
In sum, can you truly change the world? Perhaps not by yourself, but that doesn’t mean you shouldn’t try. I’m encouraged that the business world has jumped on the bandwagon en masse, but let’s see how long some of those companies stay on the bandwagon when they realize there are responsibilities that come with looking socially responsible. Given the big shift of leadership we’re likely to see in the next ten years (with the retirement of the Baby Boomers), I’m optimistic about the new crop of business leaders I’m meeting when I go out and speak at business schools–a different breed from even what I experienced nearly a quarter century ago. This new breed doesn’t just believe that we can change the world–they actually know that the consequences of not changing our collective habits will be devastating.