Archive for the ‘Recession’ Category


Wednesday, April 27th, 2011

Abraham Maslow and Viktor Frankl both suggested that the person who loses their job is best-suited to find another means of keeping themselves active while in the process of seeking new employment, whether this be volunteering for a cause they believe in or working for free in an industry about which they’re curious.  Quite often, the opposite occurs.  The shock of getting laid off leads to a negative spiral of other collateral damage and this newly unemployed person becomes sedentary while their esteem plummets.

John Scott emailed me out of the blue not long ago and asked if I would be his mentor as he wanted to tell me his story of loss and redemption (a particularly good tale around Easter time).  John came to my office and gave me the honor of allowing me to read his story below which touched me deeply.  Because I thought it might be meaningful to those you know and care about, John is permitting me to share it with you.  Hope you enjoy it.  Maybe you can be Mr. Syracuse in someone’s life.

A Year and a Day

On February 22, 2010, I lost my job.

My 34-year career was evaporated in a mere 18 seconds. His words were so few, devoid of even a shred of sympathy or compassion, that they are impossible to forget.

“We’re making a change. It is what it is.”

It was so stunningly to-the-point that even the HR director was a bit taken aback. At least in Up In The Air, George Clooney told the departed a quick story.

“Anybody who ever built an empire or changed the world sat where you are now. And it’s because they sat there that they were able to do it. There’s a packet in front of you. I want you to take some time and review it. All the answers you’re looking for are inside those pages. The sooner you trust the process, the sooner the next step of your life will unveil itself.”

On February 23, 2011, I was offered a new job, and this week, I accepted that offer.

Over the past 366 days I had to make a decision; try to remain in the industry I had devoted literally my entire life to, or take the road less traveled. I thought about my former employer and the industry as a whole. It was a bleak economic time, and many decent people were finding themselves unemployed. The future for this industry is uncertain at best, as it continues a contraction that is precedent-setting. The decision was made: Reinvent.

This is not a heroic tale of a man gallantly facing the world, taking it on full steam ahead, and achieving victory. It was nothing like that at all. Over the preceding 366 days:

I lost a job.

I lost my healthcare.

I lost my home to the real estate bust.

I was denied unemployment by the Republic of California because of a glitch on one piece of paper. I never received a penny.

I applied for 411 jobs online. Not one response.

My former employer withheld my severance for weeks, for no reason other than “they forgot”.

One afternoon, I was sitting in the Opera Plaza Cinema in San Francisco with Emily, watching A Single Man. A regrettable choice of film, as this powerful, amazing and completely depressing movie was not the spirit-lifter I probably should have watched. There was no one else but us in the theater. We kept our phones on. About halfway through the film, mine rang. It was a hiring manager for a winery. We set up a time to talk later. I knew I wasn’t going to get the position. I had no experience in the wine industry, and a zillion winery marketing people were unemployed. It was over before it started.

The movie ended, the credits rolled, and I leaned into Emily and unleashed a waterfall of agony. She held me and rocked me like a baby, this inconsolable, broken, lost man.

There was one day I had 6 cents in my checking account.

An insurance company denied my application because I had a hernia in 1974.  I wish I was kidding.

I had the most vivid nightmare I could possibly imagine. I dreamed I had died in a plane crash.

It seemed that everything that could go wrong, did.

Here’s what else happened over this year and a day: I reinvented myself, top to bottom. I reinvented my career, I tackled personal issues. I shed people in my life that were not good for me. I patched up by shattered heart, and spackled my facade to not just look , but to be… more authentic. I questioned everything.

I decided to do it all at once.

I traveled, spent time with family and friends, kept on the move, doing my work. I wrote about it all.

There is a man who is a key player in this tale. I’ll call him Mr. Syracuse.

One day, sitting with him and another good friend at a bar, I moaned about my lot in life, telling him about the 411 jobs, zero callbacks. He said, “Be in my office Monday morning.”

Mr. Syracuse allowed me to do some work for him for a while, in a business that I had never worked in before. Something happened after that experience – good things started happening. This simple act of kindness this man had extended to me made some of the inertia disappear. After I left his company, I got a consulting job. I did some freelance work. I was doing things to learn that ultimately, that I should not do them. I experimented, ad-libbed, and performed extemporaneous jobs and tasks. Some were not glamorous or thrilling, but they were necessary to keep afloat and build the empire I thought I could. Mr.Syracuse had started the ball rolling, and I will never forget it.

I told him the other night, “You know, I blame you for all the good things that are happening!”

He said, “I might have started it. You finished it.”

In these past 366 days I started a company. I secured a monthly retainer for 2011 with a media group to vlog for them. My voice is now heard on one of the top radio stations in America.

And this week, I signed the contract to a full-time position with a local university. I get to learn, read, play with websites, write syllabi, interface with instructors on course outlines. I get to learn and get paid for it.

I took a hike up Mt. Diablo this morning to watch the sun rise. A cinematic moment, yes- I like to mark moments with something memorable. I watched the sun rise, and I sipped a coffee, and looked down on my beloved Bay Area- this hotbed of the creative class, this place so beautiful and yet so tough; you have to want to be here, “they” don’t make it easy.

You have to be relentless. You have to play the odds. 411 no’s, each moving you closer to the YES.  You have to stay the course you’ve charted, with all of the potholes and roadblocks and you have to understand that it’s going to be a freaking mess.

You have to clean up your messes. Because it is difficult, that’s the reason you should do it. Because it scares you, that’s why you need to try.

On this day, nothing is as it was. Everything has changed.

I’ll be moving soon, to a new home. I’ll have room to breathe, a place to call mine again. I have a new career path, education. I have fun little projects and little jobs to keep me completely, totally, busy.

This day, I got my life back, but it’s a whole new version of it. It took a year and a day, and it was pure hell, but I made it to The Other Side.

This is the end of this particular story, but it’s really just the beginning. I made it to the starting line, with a little help from people who I will always be grateful to.

You can do this in your life. Believe that you can. Ask people to help you, for you cannot go it alone. Question everything. Look ahead, not in your rear view mirror. Trust your gut.

Reinvent yourself. I’m cheering you on.




Wednesday, December 1st, 2010


One of the most frequent questions I get asked is “What are your favorite business books of all-time?” That’s a tough question to answer. It’s sort of like “What’s your favorite color?” The fact I like purple doesn’t mean I’m going to buy a purple business suit, nor does it mean that you’ll like purple either. So, for the sake of categorization, I’ve listed my favorite business books by theme with a little info on my favorite in the category and then a list of great also-rans. Given the time of year, you’re welcome to forward this list on to your friends and family as part of your wish list so that you can continue to be a business gladiator in 2011.

LEADERSHIP: James MacGregor Burns’ landmark Leadership outlines the difference between transactional and transformational leadership better than any book I’ve ever read.
Others: Leadership is an Art by Max Dupree; Tribal Leadership by Dave Logan, John King & Halee Fischer-Wright; On Leadership by John W. Gardner; Authentic Leadership by Bill George; Leading the Revolution by Gary Hamel.

PERSONAL MASTERY: Peter Drucker is the most prolific and persuasive business writer of all time and his classic The Effective Executive is a perfect gift for the young person entering the workplace or those of us who are a little older and want to brush up on our habits.
Others: Working with Emotional Intelligence by Daniel Goleman; How to Win Friends & Influence People by Dale Carnegie; Are You Ready to Succeed? by Srikumar S. Rao.

ENTREPRENEURSHIP/SMALL BUSINESS: I started my company in 1987 and Paul Hawken’s Growing a Business was my bible for understanding the similarities of planting a garden and growing a small business.
Others: The Great Game of Business by Jack Stack & Bo Burlingham; Small Giants by Bo Burlingham; Rules for Revolutionaries by Guy Kawasaki; The Monk and the Riddle by Randy Komisar.

PURPOSE/MEANING: Simon Sinek’s Start With Why has become a recent hit helping to remind us that life and business isn’t as much about the how or what, but it’s essentially about the “why.”
Others: Meaning Inc. by Gurnek Bains; The Hungry Spirit by Charles Handy; Man’s Search for Meaning by Viktor E. Frankl; Business as a Calling by Michael Novak.

CORPORATE CULTURE: Southwest Airlines has proven over 40 years to have the most resilient and evolved culture of any organization so it’s not surprising that The Southwest Airlines Way by Jody Gittell Hoffer would be my favorite in this category.
Others: Nuts by Kevin Freiberg & Jackie Freiberg; First Break All the Rules by Marcus Buckingham & Curt Coffman; The Service Profit Chain by James L. Heskett, W. Earl Sasser & Leonard A. Schlesinger.

CUSTOMERS/MARKETING: Here’s an offbeat psychological choice — Paco Underhill’s Why We Buy helps get inside the head of your customer to understand what makes people tick and how do we make decisions.
Others: The Experience Economy by B. Joseph Pine & James H. Gilmore; Made to Stick by Chip Heath & Dan Heath; A New Brand World by Scott Bedbury & Stephen Fenichell; Loyalty Rules by Frederick F. Reichheld; Selling the Invisible by Harry Beckwith; The Purple Cow by Seth Godin.

CONSCIOUS CAPITALISM: Firms of Endearment by Rajendra S. Sisodia, David B. Wolfe & Jagdish N. Sheth makes the most compelling argument I’ve read about why thinking systemically about your business and the broader stakeholders is both smart for business and good for the world.
Others: Good Business by Mihaly Csikszentmihalyi; Mid-Course Correction by Ray Anderson; The Ecology of Commerce by Paul Hawken; A Lapsed Anarchist’s Approach to Building a Great Business by Ari Weinzweig.

HAPPINESS: A few years ago, this wouldn’t have been a business category but it’s now the most popular genre of book and employee and customer happiness is on the lips of every CEO. Daniel Gilbert’s Stumbling on Happiness is about as good as they come — relevant to our personal lives as well as how we make people happy in business.
Others: Delivering Happiness by Tony Hsieh; Maslow on Management by Abraham H. Maslow; The How of Happiness by Sonja Lyubomirsky; Positivity by Barbara Fredrickson.

Happy Holidays to all of you!

GETTING MORE MOJO FROM MASLOW: In Order to Survive the Struggles of the Economic Recession, We Need to Reframe Difficult Business Experiences as Opportunities to Find Meaning in Our Work

Wednesday, November 24th, 2010

Viktor Frankl, the Austrian psychologist who was imprisoned in a Nazi death camp and wrote the influential tome Man’s Search for Meaning once lamented, “People have enough to live by, but nothing to live for; they have the means, but no meaning.” This is a predicament of modern man. Once we’ve addressed our basic needs in life, what do we strive for?

Modern man is a worker bee. To us, business means busy-ness. We work 25 percent more hours per week than we did a generation ago, not counting the time we spend e-mailing colleagues from home or while we’re on vacation. As we toil away to keep up with the cost of living, we often fail to recognize the high spiritual price we pay for being more focused on means than meaning. But why? Research shows that this approach can be counter-productive. Gurnek Bains, lead author of Meaning, Inc: The Blueprint for Business Success in the 21st Century, says that meaning directly drives employee commitment and engagement. Industry-leading companies like Google, Genentech, and Southwest Airlines—which regularly appear on lists of great places to work—have learned that the key to raising performance levels is to create a sense of real meaning for employees. “This has a tangible and demonstrable impact on business results. Now that other forms of competitive advantage have become commodities, creating a sense of meaning for people will be what makes the difference for most companies in the future.” It is critical, then, to transform the economic challenges of the recession into opportunities for us to understand and infuse meaning into our work.

When I started my company, Joie de Vivre Hospitality, nearly a quarter century ago, I decided that the name of the business should also be its mission statement. Joie de Vivre has since grown into America’s second-largest boutique hotelier, based on our commitment to “Creating Opportunities to Celebrate the Joy of Life.” We distilled our credo into a two-word mantra, “Create Joy” which is stamped into the blue rubber bracelets that all new employees receive during orientation and that many veteran staffers routinely wear.

But one learns the difference between a glorified mission statement and a belief system that guides behavior when a company faces a “once-in-a-lifetime” economic downturn— and, really, we’ve faced two of these in the San Francisco Bay Area in the past decade. In late 2001, I was struggling. I had 1,000 employees, and I didn’t know how I was going to make payroll. The combination of the dot-com crash, 9/11, and a worsening economy had put Joie de Vivre at risk. One afternoon, I walked into a local bookstore in search of a business book that would help ease my financial pains—or at least give me a clue about how to survive. I quickly realized that what I really needed was some serious personal guidance. So I moved from the Business section to the Self-Help section of the bookstore (conveniently located next to each other), where I reacquainted myself with Abraham Maslow’s Hierarchy of Needs theory, one of the most famous psychological concepts to explain human motivation.

I suppose that a guy who names his company “Joie de Vivre” should naturally gravitate toward self-actualization. Maslow is known as an early leader in the human potential movement; he believed that psychology was too obsessed with our worst behaviors when a lot can be learned from our best practices. He first popularized the axiom, “If the only tool you have is a hammer, everything starts to look like a nail,” aptly describing his peers’ over-emphasis on neurosis in the mid-20th century. Re-reading Maslow helped me to see one of the most neglected facts in business: the fact that we’re all human. And, no matter what our role—CEO, line-level employee, customer, investor— in a particular business is, we each have a hierarchy of needs that determines what’s important to us. Late in his life, Maslow started applying his hierarchy of needs to organizations and businesses. Unfortunately, he died in 1970 at the age of 62 before he could closely examine how his theory might shift from the individual to the collective.

During that downturn nearly a decade ago, I started “channeling Abe” to see how I could apply his theory to my company. I figured the worst that could happen is we’d go bankrupt, so why not learn something along the way? I distilled the Hierarchy of Needs Pyramid from five to three levels, or key themes, which make up what I call the Transformation Pyramid: survive (safety and physiological); succeed (esteem and love/belonging); and transform (self-actualization). These themes aren’t just relevant in business; they’re fundamental in life. I looked at how to apply them to the three most important stakeholders in Joie de Vivre: employees, customers, and investors. For the purpose of this blog, I’ll focus on employees.

Maslow concluded that individuals’ deepest motivations sit at the top of the pyramid—and take on an inspirational quality. For example, in his research on people’s relationship with their work, he asked dozens of nurses, “Why did you go into nursing?” “What are the greatest moments of reward?” and “Tell me a moment so wonderful it made you weep or gave you cold shivers of ecstasy.” The nurses answered by describing peak experiences that were virtually life-altering. Nurses who were most able to express a peak experience seemed most “called” by their work.

In A Simpler Way, Margaret Wheatley and Myron Kellner-Rogers wrote, “People do not respond for long to small and self-centered purposes or to self-aggrandizing work. Too many organizations ask us to engage in hollow work, to be enthusiastic about small-minded visions, to commit ourselves to selfish purposes, to engage our energy in competitive drives. Those who offer us this petty work hope we won’t notice how lifeless it is … when we respond with disgust, when we withdraw our energy from such endeavors, it is a sign of our commitment to life and to each other.” Maslow helped me understand that my Employee Pyramid was defined by money (survive), recognition (succeed), and meaning (transform).

We all have basic needs that need to be met, and our work compensation package is the means to that end. But Gallup has shown in multiple surveys that money is not the primary reason that people leave a company (in fact, it usually comes in fourth place). People join a company, and they leave their boss. Recognition, which addresses people’s success needs and usually taps into one’s sense of social belonging or esteem needs, is what creates loyalty in the workplace. But money and recognition are external motivators for doing any job. Those who are engaged in something they’re passionate about—such as the nurses Maslow interviewed—have transcended the bartering relationship that defines most relationships between employer and employee. They have tapped into an internal motivation that fuels them. They are inspired by what they do. They have moved from just focusing on the tasks they do each day to imagining the impact of their work. As they become more aware of that intangible we call meaning, employees move to the transformational peak of the pyramid.

Most companies get a little lost in the ether at the top of the pyramid, because it’s easier for bosses to “manage what they can measure,” and it’s simpler to do a benchmark compensation survey than to try to gauge meaning. Someday we may have a “Corporate Meaning Index” just like we have a Dow Jones stock index, so that we can quickly scan who is playing at the top of the pyramid and who isn’t. In studying my own company and dozens of other meaning-driven businesses, I’ve come to realize that workplace meaning can be dissected into meaning at work and meaning in work. Meaning at work relates to how an employee feels about the company, their work environment, and the company’s mission. Meaning in work relates to how an employee feels about their specific job.

I believe that meaning at work is far more important than meaning in work. When employees believe in the work of the company, the whole Hierarchy of Needs is satisfied. Those employees clearly have their basic needs met because they have confidence in the financial stability of the company, which means they have job security. Believing in the company’s mission also typically creates deeper alliances among employees because the sense of being part of a connected crew and the pride that comes from group success satisfy our social or esteem needs. Finally, their self-actualization needs can be met by feeling that we are part of an organization making a difference in the world, plus there’s a halo effect that may render the work they do day-to-day even more meaningful.

One of the most profound decisions I made during the depth of that last downturn was to start managing the business based on meaning and to start measuring meaning in various ways, from asking questions on biannual work-climate surveys to querying line workers in monthly staff meetings, “What’s the best experience you’ve had in the past month here at work?” The question I really like to ask our employees goes something like this, “Most of us think of our job in terms of ‘What am I getting?’ What if you asked yourself daily, ‘What am I becoming as a result of this job?’” Helping our employees reframe their work, changing their tasks to make their jobs more meaningful, and creating a democratic culture in which employees help define our business strategy has helped Joie de Vivre’s turnover rate drop to one-third the industry average. We were recently crowned the “second best place to work” in the San Francisco Bay Area, a remarkable feat for a service company that’s full of people cleaning toilets in a region full of high-tech companies famous for plush corporate campuses.

I learned quite a bit about meaning in business during the last downturn, but this downturn has been full of lessons, too. During the dot-com bust, my desire to learn tended to be organizational, but the worldwide Great Recession has led to more personal lessons. I’ve found myself on an emotional roller coaster the past couple of years. I’ve had five friends or colleagues commit suicide, primarily due to stresses at work, and I’ve seen countless companies in the travel and design industries dissolve under the pressure of this relentless economy. My greatest epiphany resulted in a series of what I call “Emotional Equations” (also the title of my next book, due out in 2011) that help remind me how the world works. The most profound equation that I’ve used for myself and for the managers in my company has been despair = suffering–meaning. I learned this from reading Frankl’s Man’s Search for Meaning.

As teenagers, we learned algebra and found there were constants and variables in an equation. That’s true in life, too. The constant in a concentration camp, or in a recession, is suffering. There will always be suffering. Yet, the variable in life is meaning: How do we find a sense of meaning, even in the most difficult times? This is a question that I’ve asked my employees and myself, because if you can find meaning in the rubble, you will lessen your despair. That’s how this equation works: more meaning equals less despair. Yet, most of us in a difficult time put our attention on the suffering. Life and business are all about where you place your attention. If Frankl can live through a death camp by rediscovering the importance of meaning in our lives, we can live through a painful recession by reframing difficult economic experiences.

Wednesday, November 10th, 2010


[Originally posted Nov. 8, 2010 on the Huffington Post]

A half-century ago, few would have suggested that the world’s companies might have a bigger impact on the planet than would the various governments of the world. But, today, there’s no doubt that business — for better or often worse — impacts our lives in more and more profound ways, whether it’s how we communicate with each other in the digital age, whether we are surrounded by pollution, or how we look for global solutions to an ever more connected world. Consciousness and commerce need to feel less and less like an oxymoron.

Recently, I had the good fortune of leading a five-day global teleconference with nearly 14,000 registered listeners from more than 100 countries as 40 different worldwide business leaders and academics talked about how an enlightened business community can make a difference in the world. If you’re interested in learning more, all of the audio is free if you register here. This blog is meant to be a guide to the four key themes that arose from the varied speakers: Great companies have great purposes; Be conscious about your culture; Harvest leaders; and Think bigger than your company.

Someone once said, “our purpose in life is a life of purpose,” and this applies to companies also. One of our esteemed speakers said that the best companies think of themselves as “purpose maximizers” rather than “profit maximizers,” as with a noble and magnetic purpose you are more likely to create sustainable profits. Another suggested some great legacy companies like Hewlett-Packard became truly transformative when they moved from a place of thinking of how they can be the best in the world to being the best for the world. All of this brought me back to Peter Drucker‘s profound management question, “What business are you in?” That’s a question that every leader should ask their people. The first time you answer it, your answer will be obvious, but by the fifth time you repeat the question, it is likely that you will have uncovered your purpose or corporate essence and this is far more important than coming up with a catchy marketing slogan (which is how most companies try to prove to themselves and the world that they have a purpose).

Secondly, a common theme that many speakers suggested was that corporate culture is an essential part of company vitality. Zappos CEO Tony Hsieh surmised that a company’s culture is its brand in today’s more transparent world. And Monika Broecker, who founded the School of Personal Growth at Google, suggested that the best companies know that corporate training is just a disguise for personal development. An enlightened business recognizes that their internal eco-system is like a pond. Stagnant ponds smell and it’s hard for anything to live there. Healthy ponds have a flow of new water coming in and they create an environment where things grow. Ponds are also an apt metaphor for the ripples that are created when a stone is thrown. The most prevalent and contagious ripple in most companies today is the emotion of fear, yet a healthy culture dispels fear. So, if you want to inoculate your company against the debilitating effects of fear, invest in your culture.

Thirdly, everyone agreed that the leaders we breed today are different than the command and control generals of the past. We’re looking for conductors today who are more adept at the nuances of bringing out the best in an orchestra. If the most neglected fact in business is that we’re all human, it’s not surprising that emotional intelligence was outlined as the most important quality of leadership today. The ability to empathize and understand the other is progressively more important in this small world we live in. Authenticity, transparency, and humility were also qualities that emerging as more important for leadership in this century than the last. Anne Mulcahy‘s rein as CEO of Xerox, which she took over when it was very troubled, and her succession planning to help make Ursula Burns the new CEO a few years later shows the importance of healthy and effective leadership when a leader realizes their most essential task is to create the next round of leaders in their organization.

Finally, Richard Barrett suggested that companies are starting to realize that “a business is a wholly owned subsidiary of society, and society is a wholly owned subsidiary of the environment.” Social responsibility needs to be intrinsic within the mission of a truly conscious business and reflected in everything it does, rather than just grafted on for marketing purposes (which sometimes can be the case with Corporate Social Responsibility programs). Companies and leaders are role models — not just with the business community — but in the broader world. And, when any of us thinks of ourselves as a role model — whether that’s as a parent being observed by their kids or a leader under the microscope of their followers — it creates a natural stepping up of how we carry ourselves and what we expect from ourselves. If individual business leaders are willing to approach their work with this level of consciousness, we may actually experience a more enlightened business community with great collateral benefits to the world.

The Bright Light Turns On During the Dark Times

Thursday, December 17th, 2009

Why is it that many of us get our best ideas during the worst times? During the last economic downturn, against all odds, my company, Joie de Vivre, grew into the country’s second largest boutique hotelier when most observers were writing our obituary. After 15 years in business in 2001, we had grown into Northern California’s most prolific hotelier with twenty boutique hotels. Yet, over the next three years, we suffered through the effects of a dot-com crash, 9/11, SARS, two wars, and a recession on the local hotel economy. The Bay Area’s hotels experienced the largest percentage drop in revenues in the history of any U.S. metropolitan region since World War II.

With all of our hotels in the country’s most problematic region, one day I found myself in the local bookstore searching for some wisdom. Slightly disoriented, I ditched the business section of the store and stumbled on the self-help section. That’s where I became reacquainted with Abraham Maslow and his iconic Hierarchy of Needs pyramid, one of the world’s most famous psychological theories of human motivation. I started reinterpreting Maslow’s work and looking at how Joie de Vivre could apply this to the higher, self-actualizing needs of our three most important constituencies: our employees, customers, and investors.

Based upon our positive experience in applying Maslow, I started studying actualizing companies – like Apple, Southwest Airlines, and Whole Foods Markets – and found that many organizations were either consciously or unconsciously using the Hierarchy of Needs in their business model. As a result of this learning, I wrote PEAK: How Great Companies Get Their Mojo from Maslow a couple of years ago and my company tripled in size to almost a quarter billion in annual sales.

“Joie de Vivre” and “deju vu” are both French phrases. Our industry is feeling a lot of déjà vu these days as this financial collapse has led to a more than 20% decline in U.S. urban hotel revenues in the past year. It ain’t easy experiencing two “once in a lifetime downturns” within the same decade. But, once again, I’ve been turning to a little practical psychology to help our middle- and upper-level managers understand how they can use this painful experiencing to be their lesson of a lifetime.

Some of you may be familiar with Viktor Frankl’s legendary book, Man’s Search for Meaning, the real life story of his experience living in a concentration camp as an Austrian Jewish psychologist in World War II. Frankl found that those who died quickly had lost hope and a sense of meaning and they tended to focus their attention on their suffering, while those who survived tried to find the meaning or learning in this awful situation. If you were to distill this great book down to what I call an “emotional equation,” it would be Despair = Suffering – Meaning. Just like in algebra, life is full of constants and variables with suffering being the constant in a concentration camp and meaning being the variable. Life, and business, is all about where you place your attention. Focusing on the meaning can reduce your despair. Thankfully, the prison we experience is in our minds as there’s no barbed wire around our offices, but many of our company leaders have been freed from their silent suffering by remembering this emotional equation.

Seeing the profound effect this emotional equation had on our company’s psycho-hygiene, I started thinking about and teaching other philosophical and leadership wisdoms. Here’s a few of the other ones we’re using in this downturn:

(1) Happiness = Wanting what you have ÷ Having what you want

Or, in other words, Gratitude divided by Gratification. Sometimes, you have to appreciate what you have to create a little happiness instead of just focusing on what you want. Getting off the aspiration treadmill for a short time can be healthy for you.

(2) Disappointment = Expectations – Reality

This is rule #1 with our customers. Disappointment is the natural result of badly-managed expectations, so how are we marketing ourselves or delivering services in a fashion that allow reality to beat expectations?

(3) Workaholism = What are you running from ÷ What are you living for

Given the 24/7/365 nature of the hotel business, it’s easy for our managers to clock a huge number of hours in their work. So, we need to make sure our managers are being conscious about what’s driving them: fear of something else (like marital problems) or love of what they’re doing.

(4) Great Leadership = Humility x Ambition

Business author Jim Collins wrote about this in Good to Great, the idea that “Level 5 Leaders” are full of “hum-bition.” The best leaders are a mix of down-to-earth humanism and over-the-top will power.

(5) Calling = Pleasure ÷ Pain

The difference between a job and a calling is how you feel after 8-10 hours working. If it’s a job, you likely are a little depleted by it. If it’s a calling, you’re energized. Our goal as leaders is to find employees who are in their perfect habitat to live their calling.

Corporate Fasting?

Tuesday, August 25th, 2009

[Originally posted August 24, 2009 on The Huffington Post]

Is there a silver lining in all of the pain and suffering associated with corporate America’s downsizing diet? I had some time to consider this during a bucolic weekend on a Sonoma ranch. I spent the last few days drinking exclusively organic grape juice and a variety of medicinal teas while not allowing a solid morsel to pass by my lips for more than 72 hours. For nearly a decade, I’ve been celebrating this ritual with a few close friends as a means of spiritual and physical cleansing. We’ve found that a unique bond seems to grow from experiencing this together. Fasting has long been a practice in all kinds of religious communities, but the benefits of fasting are vigorously argued within the medical and health community. My purpose in writing this blog isn’t to endorse this practice, but more to ruminate whether some lemonade can be made out of the lemons we’re all being served with this treacherous economy.

Starving yourself would seem to be the domain of Hollywood starlets and maniacal monks, but CEOs and business leaders have been doing the corporate equivalent of this for over a year now. Unfortunately, most companies have taken an unconscious approach to this purging after a few years of Vegas-style bingeing. What if the act of willfully cutting your corporate expenses was made in a more conscious fashion such that it could result in long-term positive results for your organization?

Let me outline four positives beyond the obvious corporate waistline reduction which can come from a “corporate fast” (I promise you I don’t do this juice fast to lose weight and companies don’t have to just look at their better bottom-line as the only good outcome of their fasting):

(1) As mentioned above, one ironic outcome can be a bonding of those people who remain in the organization. In my book PEAK: How Great Companies Get Their Mojo from Maslow, I wrote about my company’s experience of navigating the dot-com crash and the fact that our corporate culture and sense of resolve actually improved during this stress test. In “Good to Great,” Jim Collins wrote that there’s a lasting comradeship that occurs when a collection of employees band together to weather an economic storm. In his role model companies, he found that the fond memories senior executives had often revolved around how they had made it through a difficult time and that “the people we interviewed from good-to-great companies clearly loved what they did, largely because they loved who they did it with.”

(2) Glucose is the body’s primary fuel source and, yet, during a fast, the system instead taps into glycogen in the liver as a means of providing sufficient resources to run your body. This innovative biological process – which can also burn protein and fat…and muscle if you’re not careful – forces you to be efficient in how you burn energy and prods your system out of its status quo. Yes, this is another way of saying you’re liver detoxing, but one great benefit that comes out of this is that you feel fresher, lighter, and more alert. Organizational execution and process innovation would be well-served if they could take on these qualities in a downturn.

(3) The physical effects on a juice fast are fascinating. The first day is always the toughest as you’re breaking a habit, but by the second day, your hunger subsides, your thinking becomes more clear (both the whites and hazel color in my eyes become more crisp), and you really do start appreciating the essence, as opposed to the extraneous, in life. There’s a laser-like sharpness and focus in one’s awareness. Complicated corporate strategy could use this kind of natural editing, especially in a downturn when prioritization is so important.

(4) Fasts are defined as occurring when you haven’t ingested and digested food in 8-12 hours. That’s why our first meal of the day is called “break fast.” My first meal after a three day fast tastes as good as anything I’ve ever been served at a Michelin-rated restaurant. Scarcity breeds appreciation. In the last few years, we were more focused on gratification than gratitude, whether it was in how we spent our money as consumers or in how we operated as businesses. A downturn can help you see some of the less obvious assets of your company which might have been hidden during the go-go growth years. There is something elemental to be learned in a corporate fast that, hopefully, can be sustained as the economy picks up again.

In sum, this downturn can feel punishing or enlightening. You can choose what you want to take from this experience. Just remember that DESPAIR = SUFFERING – MEANING. The level of corporate despair that your organization is likely to feel will be inversely proportional to the amount of wisdom, learning, and meaning that you will discover from this crash diet you’ve found yourself on.

No Wonder It Hurts So Much

Tuesday, June 23rd, 2009

[Originally posted June 22, 2009 on the Huffington Post]

I stumbled into my 25th Stanford Business School reunion over the weekend somewhat chagrined by the fact that my pockets are relatively empty a quarter of a century after I graduated from this august institution. I expected to feel small relative to the corporate titans who were my former classmates as while many of these alums have experienced the “once in a lifetime” historic downturn that we’re all living through, few could match my misfortune of experiencing it twice in the same decade (as my Bay Area hotel company was pummeled in the dot-com bust, 9/11 era also). But, I was surprised to discover that misery truly does love company as this collection of venture capitalists, investment bankers, high-tech execs, management consultants, non-profit leaders, and entrepreneurs had one thing in common. Every one of them had a net worth at this reunion that was lower than it was at the 20th reunion five years earlier and many of these folks had come back out of early retirement due to financial necessity.

One of my favorite panel discussions was a “View from the Bottom” (in each of the past reunions, this panel had been called “View from the Top”) where we learned that this past decade has been more severe than even the 1930’s. Professor Jack McDonald told us that in the 1930’s (after the big drop in stock prices in late 1929), the stock market showed basically flat growth (although lots of up and down swings) along with an average of 2% annual deflation, so there was 2% real growth in the stock market during that time. Given the wreckage we associate with the Depression, this was a bit of a shock to me. Yet, in the past ten years from January 1999 to January 2009, we’ve experienced a 3% average annual drop in the stock market and have had 3% annual inflation along the way which registers a 6% negative net growth for the decade. So, when we say “at least it’s not as bad as the Depression,” there’s certainly truth to that when it comes to unemployment and soup kitchen lines, but for those whose nest egg has shrunk 6% annually in real terms as compared to 2% growth in the 30’s, it’s understandable why you’re feeling a little blue.

And, this is for the monied class. Think about what the average middle class family has faced in the past 30 years in order to try and assure that their income was keeping up with their expenditures. Many families became two income households in order to pay the bills. Then, they started working longer hours, or, at least commuting longer distances because they could only afford a home further out in the sticks. Then, they mortgaged their home up to the hilt (or maxed out their credit cards) in order to keep the bill collectors at bay. Financial engineering isn’t just a Wall Street phenomenon as the CFO of any middle class family will tell you that their balance sheet has been sorely out of balance for years, especially when you factor in the scarcity of time in our lives. Henry David Thoreau once wrote, “The cost of something is measured by how much life you have to give for it.” Based on this premise, our modern lives are very, very expensive!

So, I left my Stanford reunion feeling a surprising dose of gratitude. I didn’t feel “lesser than” like I thought I would and I felt “at one with” so many of my humbled classmates. One of my classmates who has worked with the same investment banking firm for decades pulled me aside at one of the luncheons. He said he needed to have a private moment with me, so we ducked behind a potted palm and he whispered in the kind of tones one uses when talking about infidelity or a curiosity with Viagra. He said, “I made a bundle and lost half of it. For a few months, I felt like half a man. Then, I read your book PEAK and realized that you have a different ‘scorecard’ for success. I love that the name of your company is also your mission statement and your strategic goal for what you produce: joy. Now, I realize how far off my path I am. I realize I’ve been climbing the wrong ‘peak.’”

The world is chaotic and unfair. And, certainly, it isn’t controllable. One thing you can control is your definition of your scorecard. Just as my grandpa Potka told me years ago when, as a young teenager, I threw a tantrum on the golf course because I was hitting divots further than golf balls, “When you’re having a bad golfing day, stop counting your strokes and start counting squirrels, or how many different cloud formations you see in the sky, or how many times you’ve made your grandpa smile with one of your silly jokes.” What scorecard are you using to define success in your life?

Are You Working in a Fear Factory?

Tuesday, April 14th, 2009

[Originally posted April 14, 2009 on the Huffington Post]

You can catch much worse than the flu at work.  W. Edwards Deming, the father of the total-quality movement in business, once said that the primary duty of every leader is to remove fear from the workplace.  Smart man.  Today, our workplaces have become “fear factories,” with an emotional contagion far more serious than the cold germ.  Successful companies create a kind of psycho-hygiene that can immunize employees against the fever charts of misery that exist in most workplaces today.

Recently, neuroeconomist Gregory Berns wrote in the New York Times, “We are caught in a spiral in which we are so scared of losing our jobs, or our savings, that fear overtakes our brains. And while fear is a deep-seated and adaptive evolutionary drive for self-preservation, it makes it impossible to concentrate on anything but saving our skin.  Ultimately, no good can come from this type of decision-making. Fear prompts retreat. It is the antipode to progress. Just when we need new ideas most, everyone is seized up in fear, trying to prevent losing what we have left.”

Berns conducted an experiment and found that people would rather expedite a bad experience rather than wait for it.  He writes, “Nearly a third feared waiting so much that, when given the chance, they preferred getting a bigger shock right away to waiting for a smaller shock later. It sounds illogical, but fear — whether of pain or of losing a job — does strange things to decision-making.”  I’ve experienced this kind of “shock me now” illogical thinking recently in my business.  We were in the midst of launching a San Francisco restaurant and a Southern California hotel when two separate owners independently decided to potentially shutter the new restaurant and the new hotel after spending millions of dollars and time to create them due to a severe case of fear-itis.  Fortunately, in both cases, we were able to convince the owners (as my company, Joie de Vivre Hospitality, is the manager of both properties) that it made more sense to launch the venture and not layoff all the managers and staff that had been hired and trained as opposed to mothballing the business for a year until times were better.

The irony is that risk aversion is running rampant just at the time that creativity and innovation are more needed than ever.  Downsizings and the fear associated with them are part of the business landscape, but corporate anorexia – companies that downsize to get too thin – isn’t healthy for an organization or its people.  But, just as the anorexic doesn’t have a realistic perspective on his or her body, the corporate leader who is possessed with thinning the company has no clue what kind of long-term negative impact they’re creating on a cellular level in their organization.  One of the most important questions any leader needs to ask before they downsize is, “What do we want this company culture to look like at the end of this downturn?”

New thinking in both psychology and medicine suggests that wellness isn’t just the absence of disease, but, instead, it’s the prevalence of fulfillment and vitality.  This is just as true in an organization as it is someone’s body.  We need to practice a radical rethinking of the idea of management.  Notice I used the word practice as my friend and fellow entrepreneur Jesse Jacobs recently pointed out to me that doctors, lawyers, religious professionals, and athletes all “practice” their craft, but no one uses that word to describe businesspeople.
First, peak-performing leaders need to practice clarifying for their associates what’s within their grasp to change and what’s beyond their grasp.  Life is full of constants and variables, just like algebra.  Those companies and leaders that create serenity in place of fear know how to practice accepting the things they cannot change, having the courage to change the things they can, and the wisdom to know the difference (credit the Serenity Prayer).  Fear comes from the unknown and the uncontrollable, so it’s essential to redirect the corporate energy from the light at the end of the tunnel to the metaphorical candle you can light in your hand.  And, creating a couple of small wins will help build the momentum such that a positive emotional contagion can grow.

Secondly, companies are meant to be the vehicle for the aspirations of their workers as integrated human beings.  And, great leaders are truly awakeners of potential, not managers of experience.  Many of us are asleep to what we are capable of becoming, yet a brilliant boss and times like these can be the actualizing alarm clock you’ve needed to awaken to all you have to offer to your company and the world.  Fear can be a motivator, but the scent of possibility is so much more powerfully sustainable as an influencer.  When one door closes, another opens, but quite often we look so longingly and regretfully upon the closed door that we do not see the one which has opened for us.  In fact, too many of us become enamored with the open window as our escape.

If you practice these two steps – focus on what you can control and help people see and actualize their potential – you will build confidence and reduce fear.  And, that bundle of human energy that we call your company will weather this storm just fine.  In fact, our emotionally-intelligent President is trying to use this two-step dance to immunize the country from the fear tailspin we’re in collectively.  Fear creates failure.  The strange irony is that on Friday, the U.S. shut down its 22nd bank of the year and it was called Cape Fear Bank.

On a personal level, I’ve noticed the change in the corporate mood of this country.  When my book, PEAK, came out a year and a half ago, most of the questions I was asked at speeches related to how to create a more vital workplace, but today the questions are more survival-driven.  From fulfillment to fear and from mojo to malaise, I’ve seen a dramatic shift in where we are paying our attention.  But, one thing we can learn from the great spiritual practices of the world is life is all about where you pay your attention.  Practice paying your attention on the higher needs of your employees, customers, and investors, and, miraculously, you’ll find that this is the true differentiator when everyone else is stunted at the bottom of their Hierarchy of Needs pyramid.    

Outsourcing the Government to Wal-Mart

Thursday, April 2nd, 2009

[orginally posted April 1, 2009 on the Huffington Post]

Admit it. We are in uncharted territory. We’re spending more than a trillion dollars to prop up an economy that was overly-stimulated during the dot-com bubble and then propped-up again by the Fed during the real estate bubble. When Republicans are talking about nationalizing banks and the Obama administration is taking a more expansive role in virtually every industry, we have to recognize that our next bubble may be the viability of our government. We can’t afford to have that bubble burst. In fact, the Chinese, our biggest offshore “pusher” that have helped facilitate our consumption and borrowing addiction, have warned us. They’ve asked us to tame our government-sanctioned stimulus sensibilities for fear of piling on the future America’s debt burden. You know when the largest Communist country in the world is educating the U.S. on the risks of too much government intervention and debt that we’ve crossed some sort of line that only Ayn Rand would have imagined a generation or two ago. So, within the context of this new version of the New Deal landscape, let me propose a blasphemous concept. Given the huge logistical exercise that the Obama administration will be conducting in health care, environmental, infrastructure, and virtually every other policy matter, why not learn from the masters of how to make big things work better: Wal-Mart? This resilient and entrepreneurial company has pranced across the planet creating annual revenues that surpass most mid-size countries’ annual GDP. Of course, Wal-Mart and McDonald’s were the only two American companies that experienced growth in their 2008 stock prices in this new survivalist economy, so they may be the right role model for these trying times.

Yes, I know you hate Wal-Mart. So, do many Americans. In fact, between 2000 and 2005, the company’s stock price dropped more than 25%, partly due to the fact that almost 10% of Wal-Mart consumers had stopped shopping there due to the company’s well-documented reputation of being socially-irresponsible (or for the conservatives in the crowd, at least severely politically incorrect). But, this company has remade itself in some truly impressive ways…partly out of necessity. But, ultimately, Wal-Mart is a brilliant case study of how a behemoth can do well by doing good and do that with the kind of speed that Barack and his team need.

Exhibit A: Health Care. While Wal-Mart still trails many of its competitive retailers in terms of the health care benefits it provides employees, it has made large-scale changes such that the percentage of employees covered is 15% higher today than it was in 2006 (at the same time that most companies are going in the opposite direction by reducing benefits in this recession). It helps to be the world’s largest self-insured employer, but this fact means that the company has innovated in all kinds of ways that would be deeply instructional to the U.S. government: hundreds of in-store health clinics have recently opened which are meant to provide affordable access which saves big money for local government public health facilities, $4 generic drug prescription programs have saved over $1 billion for customers and employees, a $20 per month catastrophic care program for employees, an investment in digitalized and secure medical records (one of Obama’s most well-received health proposals) for its employees and retirees, a contract with the Mayo Clinic to provide all transplants for Wal-Mart employees as a means of a single source approach to reducing the costs associated with these expensive procedures, and a “Life With Baby” education program aimed at reducing the rate of premature births and early infant diseases for employees. Whether its making health care more affordable and accessible or revolutionizing some of the systems associated with this slightly-archaic industry, Wal-Mart’s best practices are noteworthy for the White House.

Exhibit B: Environmental. Prior to 2005, Wal-Mart was appropriately scolded for its passivity with respect to how it was reducing its environmental footprint as the world’s largest company. While today no one would mistake Wal-Mart for Patagonia or any other eco-focused retailer, it’s remarkable what changes have been made in such a short time based upon the company’s collaboration with a variety of environmental organizations. Wal-Mart created its own environmental standards – since there weren’t any federal standards to rely upon – regarding eco-packaging and they imposed these on Procter & Gamble, General Electric, and even the folks who make the Radio Flyer wagon (you may have heard the much-told story of how a Wal-Mart employee saw how much waste occurred when they unpacked their child’s gift, which gave this employee the incentive to recommend changes to their Wal-Mart superiors). Additionally, they created a supplier index and eco-rating system that they rolled across all of their product categories. With the largest private trucking fleet in the world, the company is changing the design of these trucks to create 25% better fuel efficiency which will save Wal-Mart $500 million annually by 2020. And, they’ve made great efforts to provide more eco-friendly products for their customers such that they now sell more than 100 million fluorescent bulbs annually.

We have a lot to learn from Wal-Mart. Through no contractual obligation, Wal-Mart employees were elbow-to-elbow assisting Katrina victims faster than feeble FEMA due to some independent decision-making by local store managers. Within a couple of days, the senior leaders of Wal-Mart made the kind of decisive decisions sorely lacking in the Bush White House. They committed 1,500 truckloads of free merchandise, food for 100,000 meals, job security for all displaced Wal-Mart workers in the area, and they contributed $20 million in donated cash to the efforts. And for those who think a Wal-Mart job is a dead-end experience, realize that the company has a well-respected career development program that promotes line level workers quickly such that two-thirds of all Wal-Mart managers are elevated hourly employees. You may not like Wal-Mart, but the vast majority of their employees do seem to be committed to the company and every single employee has the potential to earn a quarterly bonus based upon store performance.

Yes, I know that Wal-Mart deserves to be the corporate piñata for a variety of other business strategies and tactics and their commitment to many of these new-found practices may seem to be as much bottom-line and reputation-driven than a new-found religion (and, I’m not sure that the ratio of Prius’ to Hummers in their headquarters parking lot has escalated any faster than any other American corporate giant). But, what the Obama administration needs to succeed today isn’t more politically-correct zealots. What it needs is an efficiency expert that can implement logistics very quickly on a grand scale as Barack’s agenda is vast and the stakes are high. The last time I checked the U.S. government wasn’t all that good at efficiency, logistics, or speed (although I will say that our government has gotten much better in these areas during the past decade).

Don’t be surprised if we’re going to be “bending toward Bentonville” in these next few survival-driven years. If you need a little proof that Wal-Mart’s reputation is making a comeback, take the case of’s signage in the bastion of liberalism, San Francisco. My college fraternity brother was President of a couple of years ago. He told me about how his employees were occasionally embarrassed to tell their friends in the Bay Area (where is headquartered) that they worked for the company. And, for potential sabotage reasons and to limit their exposure in this geographic hot bed of political protest, chose for years to downplay their Bay Area office building signage presence. So, given Wal-Mart’s recent “coming out” as a good corporate citizen, I guess I shouldn’t be surprised that the other day when I was driving to the San Francisco airport, there was a huge sign on a bayside office building proclaiming was headquartered in that building.

For those of you who are still having a hard-time digesting the idea of Barack being mentored by Bentonville, would you consider a joint venture with Wal-Mart, instead of an outsourcing or consulting contract? I can certainly think of better investments for the U.S. government (and all of us who “invest” in our government) than A.I.G.

Bankers, Open Your Vaults!

Thursday, February 5th, 2009

[originally posted Feb. 4, 2009 on The Huffington Post]

Will it take an earthquake to shake American bankers from their newfound windfall from the federal government? Congress approved the $700 billion TARP rescue plan months ago with the idea that these funds would help stimulate the economy by providing more capital to the banking industry which would ease credit to borrowers. But, these reluctant bankers took the first $350 billion and used it primarily for paying down debt and acquiring other businesses. In fact, just a couple of weeks ago, Bank of America asked for another $20 billion to help it digest the losses associated with its acquisition of Merrill Lynch. Maybe the bankers at B of A could learn a few things from a history lesson about the roots of their institution.

A.P. Giannini opened the Bank of Italy in a former San Francisco saloon in 1904 because, as a produce dealer, he found established banks unwilling to take on his or his farmers’ business. But, less than two years after opening the bank, a sentinel event shook him to his core and helped define how what would become the Bank of America would approach lending to the masses as B of A popularized branch banking across the country.

In the early hours of April 18, 1906, Giannini was suddenly thrown out of bed by a violent upheaval in the earth that shook his San Mateo house to its foundation. He immediately made the trek north to the epicenter in San Francisco. His fears of what he would find in the city were exacerbated when he learned that he would not be able to travel his typical route via the railroad. The earthquake had wrenched the tracks from the ground making rail service impossible. He set off by foot, his only alternative. Along the 17 mile walk to San Francisco, Giannini encountered processions of wagons carrying frightened people fleeing the city who conveyed depressing stories of startling destruction in the city. Fearing the worst, Giannini reached his bank and was startled to find that it had not suffered any major damage. Two of his employees had rescued the overnight cash, approximately $80,000 in gold and silver from the vaults and secured it inside their bank. Giannini was tremendously relieved, but only briefly, as the threat of fire was rapidly moving their way. He moved quickly and determined that they had about two hours to get everything out of there securely. The three men obtained two produce wagons to transport the Bank of Italy’s money, books, and furniture out of the city back to Giannini’s home in San Mateo.

Bank of Italy was one of the few that was able to provide loans in post-earthquake San Francisco when borrowers’ thirst for capital was much like ours is today. Giannini was forced to run his bank from a plank across two barrels in San Francisco’s rumpled streets. Giannini made loans on a handshake to anyone who was interested in rebuilding. Years later, he would recount with pride that every single loan was repaid. Giannini is credited as the inventor of many modern banking practices. In the depths of the Great Depression, he bought the bonds that financed the construction of the Golden Gate Bridge. During World War II, he bankrolled industrialist Henry Kaiser and his enterprises which supported the war effort. After the War, he visited Italy and arranged for loans to help rebuild the war-torn Fiat factories.

A.P. Giannini is probably rolling in his grave today as American bankers have treated the U.S. government as venture capitalists providing them “opportunity capital.” Just a couple of months ago, the Gallup organization announced the results of their annual “Honesty and Ethics” poll of American professions. The only significant change from the prior year is that bankers have sunk to a historical low with only 23% of Americans considering them very honest or ethical (down from just 41% three years earlier). With nurses topping that honesty list, American bankers should realize that A.P. Giannini created a sort of capitalist triage on the streets of San Francisco in the earthquake aftermath which quickly allowed the Bank of Italy (soon to be called Bank of America) to earn somewhat of a monopoly in the early 20th century banking world.

Where is that kind of innovation and desire to lend today? American banks spend hundreds of millions of dollars in advertising to try and differentiate themselves from each other. But, in this time of crisis, when America would truly notice and applaud the banker that was in the streets trying to stimulate business, our modern day bankers are cowering in their very lonely vaults.