Last year, liberal filmmaker Michael Moore lamented the fact that the bankers were “burning down our economy” while earning obscene bonuses. Recently, some Tea Party conservatives have suggested that President Obama, with his gentle demeanor and misplaced upbeat perspective on the economy, wasn’t acknowledging “the auditorium is filling up with smoke.” On last night’s network news, the anchor suggested that people across the country were “burning mad” about the state of the economy. So, given all the references to fire and the economy, what’s to be learned from the annual Burning Man celebration in the “high” Nevada desert?

The world’s largest active art exhibition begins this week as it does each year around Labor Day. Nearly 50,000 people come together to create a temporary utopian community based upon radical self-reliance and self-expression. Think Mad Max meets Lawrence of Arabia meets Hair. The mind-altering alchemy of art, spirituality, sex, and dancing under the stars is popular with the bobo (bourgeois bohemian) crowd and gets its share of snarky press, but maybe there’s something to be learned from some of the basic tenets of the quarter-decade old festival.

First of all, this isn’t Hooverville during the Great Depression. This bedouin-like tent city’s participants are there by choice and this temporary tribe has bought into the associated economic principles that define Burning Man and could inspire an under-inspired White House economic team. Here’s three lessons that we might learn from the Burning Man economy:

(1) Long Live The “Gift Economy.” The only thing you can buy at Burning Man is ice or coffee (with the exception of the entrance tickets). Everything else is gifted. In other words, in this utopian midsize suburb, you can get a haircut, a massage, hang out in your favorite pop-up bar, find an outrageous outfit, or listen to a lecture on global politics all for free. What would it be like if we de-commodified our relationships and truly lived the Biblical scripture that it is better to give than to receive? What if our pecking order of status in the United States was more based upon who gave away the most as opposed to who earned the most?

(2) It Does Take a Village. Just like America was built on barn-raisings in its past, so does Burning Man tap into that communal spirit of civic responsibility. No country in the world is more enamored with its sense of manifest destiny and individual liberty than the United States, but our forefathers – whether they were venturing west through the wilderness or whether they were fighting the British – truly valued the essential nature of communal participation in our democratic society (and Alexis deTocqueville wrote quite a book observing this). Both Burning Man and America pride themselves on radical self-reliance, but neither would exist without a culture of volunteerism (or, in Burning Man’s case, “voluntourism”). Social psychologists have proven that those that are unemployed who volunteer their time during their work hiatus build self-esteem and tend to be hired for new for-pay work faster than those who don’t volunteer. How can the White House tap into this slumbering giant with nearly 20% of the country under-employed currently?

(3) Leave No Trace. Some might suggest these three words describe the economic impact (or lack of one) of Obama’s stimulus package. But, these words also describe that this deserted desert is wiped completely clean of the collective fingerprints of this mass event due to a collection of simple rules that everyone buys into. We’ve spent a couple of hundred years milking what we can from our natural resources in this country without fully accounting for the cost of what externalities we create whether it may be oil spills, pollution, or human or animal health risks. Ironically, Burning Man exists because the U.S. Bureau of Land Management leases the “Playa” for this event each year, but with extremely strict regulations with respect to how it will be returned to its natural condition and the Burning Man economy absorbs that cost through the ticket price and the community policing. What if our government and businesses took that same “leave no trace” mentality with respect to how we used natural resources throughout our economy?

No, this won’t likely play in Peoria, but there’s something to be learned from the allure of the Burning Man experience. At a time when Nevada leads the nation in homeowners being thrown out of their homes, Burning Man will break records this year for attendance as people create their temporary home in the desert. The most resonant thing I’ve heard in past years on the final days of each Burning Man as people go back to their “normal lives” is “Why can’t life be like this all the time?” Well, we’re adults, so summer camp only lasts so long, but that doesn’t mean we can’t adopt some of the Burning Man creed when it comes to our moribund economy. Nietzsche wrote that “the measure of a society is how well it transforms pain and suffering into something worthwhile.” The idea of burning a wooden effigy started out of the pain of Burning Man founder Larry Harvey trying to get over a failed romance. Maybe it’s time the White House took Rahm Emanuel’s channeling of Nietzsche more seriously (“never waste a good crisis”) before America fully loses its romance with Rahm’s boss.

One of the great mysteries in life is why some of us prefer to be swamp-dwellers. Not literally. I’m not dissing those living in the low country of the Gulf States or, frankly, anyone stuck in less than pristine living conditions. No, what I’m talking about is why some of us choose to be prisoners of our own minds. My grandmother used to tell me, “Some days, you need an escort to take you through that dangerous neighborhood that is your mind.”

Ask a thoughtful swamp-dweller why they perennially veer toward the negative and they may tell you that low expectations translate into less disappointment in their lives. In fact, philosopher William James once wrote that self-esteem could be distilled down to an equation: success in life divided by expectations. Recent studies have shown that Asian-American students coming from families with high academic expectations of them tend to have lower self-esteem even when they score very well on their exams, so maybe there’s some truth to this. But, low expectations can also translate into less success when one’s spirit and motivation is poisoned by a lack of hope, meaning, or possibility in one’s life.

In the context of business, we’re all aware that some corporate cultures create a momentum of victory while others create a constant feeling of failure. Given that my company often takes over the management of hotels that are in a downward spiral, I know the signs of a troubled culture: passive aggressive communication, lots of finger pointing, and universally low expectations. Yet, there are many companies that have risen from their swamp whether it’s Continental Airlines with a newcomer CEO Gordon Bethune in the 90’s or Apple with returning CEO Steve Jobs at around that same time. In both cases, these execs first had to help all in the organization believe in themselves again and identify a few initial victories that they could point to in order to start building that momentum of victory.

My son has just been released from prison after a Federal Judge found that his constitutional rights had been violated (due to mistaken jury instructions). While he was initially ecstatic about being out after being wrongly accused for four and a half years, he started to gravitate back to familiar territory: Will the County District Attorney choose to appeal the Judge’s ruling? Of course, this has enormous implications for his life, but it’s also something he has little influence over and, for the time being, there’s so much life to catch up on and to celebrate that obsessing on the D.A.’s actions can become a no-win game. One of the responsibilities of friends and family is to escort each other through the dark alleys of our minds when there are sunny, open spaces just around the corner.

I’ve been fortunate enough to spend the past few days in Montana with Mihaly Csikszentmihalyi (and his wife Isabella), the author of Flow and many other books on how to live an optimal life. One of the basic premises of Flow is that life is at its best when we’re expertly navigating between challenge and skill. Think of a graph with two axes: with challenge on the vertical axis and skill on the horizontal axis. Flow occurs as we move diagonally away from the intersection of these two axes toward the upper right hand corner. But, most of us spend our lives toggling between boredom (low challenge, high skill) and anxiety (high challenge, low skill) living a life that feels too full of inertia or exertion.

Mihaly says someone in Flow

…concentrates their attention on a limited stimulus field, forgets personal problems, loses their sense of time and of themselves, feels competent and in control, and has a sense of harmony with their surroundings…they cease to worry about whether the activity will be productive or whether it will be rewarded…they have entered a state of flow.

This is true of individuals inside and outside of work as well as companies that pursue an organizational predilection toward Flow.

Manifesting a good life by just thinking positive thoughts is not enough. There’s no doubt that healthy psycho-hygiene creates a greater likelihood of living a life in flow with the world. But, I prefer to think of this as more like planting yourself “downwind from the flower shop.” Your willingness to build your skills and to accept challenges — emotionally, professionally, intellectually, athletically, spiritually — is your means of placing your destiny at a fortuitous intersection where good things come wafting your way. To understand how to find that flow in your life, read Mihaly’s book of the same name or Finding Flow or Good Business (to understand the context for work) or The Evolving Self (how Flow can make a difference to society).

When you submit your answers by August 27th to one of these three questions, you could qualify to win a healthy dose of PEAK.

What’s the biggest impact PEAK has had on your organization? Tell us what you specifically did and the qualitative and the quantitative impact (if measured). Submit your answer to: sue@peakorganizations.com

The winner of this question will receive 25% off a PEAK Strategy Session or Seminar, or up to two free hours of phone consultation regarding embedding PEAK into your organization.

How has PEAK changed how you see yourself as a leader and what’s been the impact on those around you? Submit your answer to:  athena@peakorganizations.com

The winner of this question will receive two free one-hour leadership coaching sessions.

Which of Chip’s blogs has been the most meaningful to you and why? Submit your answer to chip@peakorganizations.com

The winner will receive a free speech for your company in the San Francisco Bay Area or a free night stay in a Joie de Vivre hotel and a free meal with Chip.

The winners of each question will be announced at the end of September.  In the spirit of spreading inspiration, we  plan to share your submissions.  Therefore, if you wish yours to be anonymous, please let us know.   We look forward to hearing from you!

I’m a premature grandpa. At age 49, I’ve got a couple of grandsons, Deshawn and Danari, who are 15 and 13 and you might as well call them “Generation Why?” because they’re at that age when they’re full of questions. While we were riding the rollercoaster at the Santa Cruz Boardwalk about a week ago, Danari asked me what were the most important lessons I learned when I was a kid? I was tempted to take a page out of All I Really Need to Know I Learned in Kindergarten, but a teenager doesn’t want to hear vague platitudes like “clean up your own mess” or “say you’re sorry when you hurt somebody.” No, what Danari wanted to know is which classes had the most profound impact on me as a leader today? Good question.

It’s natural to believe that reading, ‘riting, and ‘rithmatic are the fundamentals for a successful adulthood as communication and logic are hallmarks of great leadership. And, of course, I learned about the value of teamwork on the playground in P.E. and came face to face with winning & losing and good sportsmanship which are essential values of competitive capitalism. But, those classes are too obvious as answers to Danari’s question. I spent some time deeply pondering what skills I built in the classroom all those years ago that truly serve me in ways I could never have imagined. Ultimately, I came to the conclusion that three particular junior high school classes have the most relevance to my day-to-day leadership skill set today.

First, let’s start with the worst. Actually, Ada Wurst was my Art teacher and she gave me the only B I received in junior high, so she taught me a lesson in humility (yes, my definition of being “type A” was to get all A’s in school). She also figured out that I was color blind – I couldn’t see those numbers in the color bubbles. Flunking color (but with a reason) made me feel a little better as I just thought I might just be color dumb. But, most importantly, Ms. Wurst helped me to see the genius in being able to see patterns that aren’t obvious to everyone else. Learning to make art was a qualitative process and I learned that qualitative intelligence depends on a nuanced perception of the qualities one encounters or creates. So much of leadership today is judgment, not calculation…creativity, not analysis. So, Ms. Wurst taught me the art of conceptual blockbusting, how to truly “think outside the box” and color outside the lines.

Secondly, I have to nominate Mr. Worthington and his Health class. When most of us think of health class, we imagine it as purely an exercise in human biology. Yes, we did learn about the reproductive organs and where babies come from (progressively more important for 7th graders these days) and about puberty, nutrition, and how to take care of oneself. But, our greatest learning was about how to create well-being beyond our body. Mr. Worthington helped me to see that one’s physical body quite often is just a manifestation of what’s going on inside emotionally and maybe even spiritually. Health – broadly defined – is mind, body, and spirit. And, that’s just as true in a company as it is for an individual. Mr. Worthington reminded us that we could “be all that we could be” only a couple of years after Dr. Abraham Maslow had proclaimed that in his books about the hierarchy of needs and the U.S. Army adopted it as its advertising slogan in the 1980’s. Mr. Worthington taught me about my worth.

Finally, if there’s one skill I learned in eighth grade that serves me well today it’s time management. And, one of my hidden time management skills is that I type at a speed that’s probably about twice that of the typical CEO. Profuse thanks need to go to my spinster Typing teacher Ms. Binns (yes, these names are, in fact, real). This cranky old battle axe sent more than a few of us into tears as she exhorted us on how typing was such a pivotal part of our lives. I remember one smart ass student who once asked her, “Why do we need to type when our fathers have secretaries and typing pools that handle all that clerical stuff?” Ms. Binns peered over her glasses with a mean stare and said, “Don’t assume you’ll always have someone to type your letters for you!” Clearly, this woman had a crystal ball into the era of PC’s and iPads when a leader who’s an expert typist can shave off a couple of hours of slaving in front of the computer compared to the guy who chose “Metals” class instead of Typing. Ms. Binns’ Typing class should have been subtitled “Time Management.”

Mrs. Wurst. Mr. Worthington. Ms. Binns. Who knew that the perspectives and skills you introduced me to would serve me so well today as a leader? Wherever you are, I just want to say thanks for helping me have an artful view of the world, a healthy and holistic view of myself and my company, and an expeditious ability to communicate in writing.

And, of course, modern man is a worker bee. Business means busy-ness. We toil away to keep up with the financial cost of living, sometimes not recognizing the spiritual cost of living in a world that often is more focused on our means than our meaning. But, we’ve traded the assembly line for the office cubicle, braun for brain, and an increasing number of us expect that the personal transformation we create outside the office can be possible within the realm of the workplace, too. We work 25% more hours per week than we did a generation ago (and that doesn’t even count the emails at home and BlackBerry messages on vacation). So, if we don’t find meaning at work, it will purely be in the crevices of life where we’ll have to find soulful sustenance.

Gurnek Bains, the lead author of Meaning, Inc: The Blueprint for Business Success in the 21st Century suggests, “The creation of meaning directly drives commitment and engagement and 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.”

According to the authors who interviewed more than 10,000 executives, such “Meaning Inc. companies” as Google, Virgin, Genentech, Southwest Airlines, and Tata understand that the key to raising levels of performance is “to create a sense of meaning that is real as opposed to going through the motions of creating statements of purpose and values.” Not only do such companies regularly appear on lists of best places to work, but shares in those with a ten-year stock history have gone up 600%, far faster than their competitors.

I started my company nearly a quarter century ago and decided that the name of the company should also be its mission statement. Joie de Vivre Hospitality has grown into America’s second largest boutique hotelier based upon our mission of “creating opportunities to celebrate the joy of life.” This compelling credo has even been distilled down to a two-word mantra (“Create Joy”) that is stamped into blue rubber bracelets that many of our employees wear and all our new employees receive during new hire orientation.

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 we’ve had two of these in the San Francisco Bay Area in the past decade). In late 2001, I was struggling. I had 1,000 employees at the time 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 meant that my hotel company, Joie de Vivre, was at risk. About that time, I walked into the local bookstore in search of a business book that would cure my financial woes or at least give me a clue about how to survive. Within minutes, I realized I needed something more serious. I found myself sauntering from the business section to the self-help section of the bookstore (conveniently located next to each other) and that’s where I reacquainted myself with Abraham Maslow’s Hierarchy of Needs, one of the most famous psychological theories of human motivation.

I guess a guy who calls his company Joie de Vivre would naturally gravitate to self-actualization. Maslow was famous for being an early leader in the human potential movement based upon his belief that psychology had been too obsessed with worst practices and there’s a lot to learn from best practices in human behavior. He first popularized the wisdom, “If the only tool you have is a hammer, everything starts to look like a nail” as it aptly described the psychology profession’s over-emphasis on neurosis in the mid-20th century. Spending the afternoon reading Maslow helped me to see one of the most neglected facts in business: the fact that we’re all human. And, no matter our role in business – as a line level employee, as a CEO, as a customer, or as an investor – we all have a hierarchy of needs of what’s importance to us. As I read more about Maslow, I came to understand that late in his life (I was able to obtain his private journals for the last ten years of his life), he started applying his hierarchy of needs to organizations, and, specifically to business. But, unfortunately, Abe died young at age 62 in 1970 before he could closely look at how his primary theory could shift from the individual to the collective.

During that downturn nearly ten years ago, I decided to start “channeling Abe” to see how his theory could apply to my company. I figured the worst that could happen is we’d go bankrupt, so why not learn something along the way. I synthesized Maslow’s Hierarchy of Needs from five levels to three key themes: Survival (addressing physiological and safety), Succeed (social/belonging and esteem), and Transformation (self-actualization) which make up what I call the Transformation Pyramid. These themes aren’t just relevant in business, they’re fundamental in life. And, then I looked at how we could apply these themes to our three most important stakeholders in Joie de Vivre: our employees, our customers, and our investors. For the sake of this article, I will focus purely on the Employee Pyramid.

In his research on people who were being all they can be, Maslow came to realize that the deepest motivations were at the top of the pyramid and took on an inspirational quality. At one point in his research on people’s relationship with their work, he interviewed dozens of nurses and asked the question, “Why did you go into nursing?” Although the initial questions were rather superficial, as he dug deeper asking questions like, “What are the greatest moments of reward, or tell me a moment so wonderful it made you weep or gave you cold shivers of ecstacy,” he found the nurses expressing peak experiences that were virtually life altering. And those nurses who were most able to express a peak experience seemed most “called” by their work.

Maslow 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.” Reading Maslow helped me see that the Employee Pyramid was really defined by Money (Survival), Recognition (Success), and Meaning (Transformation).

We all have base 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 isn’t the primary reason 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 that usually tap 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 people who have a job or a career. Those who are living a calling – like the nurses Maslow interviewed – have transcended the bartering relationship that defines most employers with employees. 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 tapping into the purpose or imagining the impact of their work. That’s when an employee has moved to the transformational peak of the pyramid as they become more focused on that intangible we call Meaning.

Most companies get a little lost in the ether at the top of the pyramid as it’s easier for managers to “manage what they can measure” and it’s simpler to do a benchmark compensation survey than to try to measure 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 task.

I believe that meaning at work is ever 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 base needs met because they have confidence in the financial viability of the company, which means they have a secure job. Believing in the company’s mission also typically creates deeper alliances among employees because that sense of being part of a connected crew and the pride that comes from that success satisfies our social or esteem needs. Finally, our 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 you do day-to-day even more meaningful.

One of the most profound decisions we made during the depth of that last downturn was to start to managing our business based upon meaning and to start measuring meaning in a variety of ways, whether it be questions on our twice-annual work climate surveys or whether it was asking in the monthly staff meetings with our line staff, “What’s the best experience you’ve had in the past month here at work?” The question I 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 work tasks to make them more meaningful, and creating a democratic culture in which employees help define our business strategy has helped JdV’s employee turnover drop to one-third the industry average. And we were recently crowned the “second best place to work” in the San Francisco Bay Area, unusual for a service company full of people cleaning toilets in a region full of famous high-tech companies with their plush corporate campuses.

I learned quite a bit about meaning in business during the last downturn, but this downturn has been full of lessons also. During the dot-com bust, my desire to learn tended to be more organizational, but this worldwide Great Recession has led to more personal lessons. I don’t know about you, but I’ve found myself on an emotional rollercoaster 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 lesson in this downturn has been to create a series of what I call “Emotional Equations” (the title of my next book coming 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 and I learned this from reading Frankl’s book, Man’s Search for Meaning.

As teens, 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 myself and those I work with because if you can find meaning in the rubble, you will naturally lessen the despair that you feel. That’s how this equation works: more meaning, less despair. Yet, most of us in a difficult time put our attention on the suffering. Life and business is all about where you place your attention. If Viktor 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 this difficult economic experience as the ultimate wisdom creator.

That’s paraphrasing a wisdom Warren Buffett once uttered (by the way, Warren Buffett’s lunch auction sold for a record $2.63 million last weekend in the annual charity fundraiser for Glide Memorial Church in San Francisco; this is the highest winning bid in this 11th annual event so maybe the economy is coming back!) Bill George, former CEO for Medtronic when that medical instruments company experienced the largest capitalization growth of any New York Stock Exchange company in the 90s, takes this headline one step further, “Do your shareholders choose you or do you choose them? Sophisticated CEO’s choose their investors by defining their particular business approach and strategy and assuring their investors are aligned with that program.”

This was a bell-ringing week for me … literally. A week ago, I got the honor of standing at the podium of the New York Stock Exchange to open trading on Monday morning for the world’s most well-known marketplace. On that very day, the Wall Street Journal reported that I’d sold a majority share in my company to a company owned by an heir to the founders of Hyatt. After 23 years, I was no longer the sole shareholder of my company, nor necessarily in control of my company’s destiny. How did that feel? While there’s a series of mixed emotions — just like the word “surrender” has multiple meanings, both positive and negative — I have to say that I feel like a proud father who’s married his daughter off to just the right guy. Sad at the passing of an era, but satisfied that this is exactly what’s supposed to be happening and I couldn’t choose a better partner for my offspring.

There are three kinds of investors: those focused on winning the game of “Survivor,” those focused on building relationships as their means of success, and those focused on creating a legacy who put their money where their heart is. Think of a pyramid with three levels. At the base of the pyramid – the widest point on the triangle — is the vast majority of investors, those that see investing as one constant set of transactions. These investors tend to focus on optimizing the most amount of return on their money in the shortest period of time. It is the fundamental principle behind return on investment (ROI) or internal rate of return (IRR) calculations and it is part of the basic language almost all investors use to determine whether they’ve survived in their investment practice. But, there are some investors who take a little longer view of their relationship with the company they invest in. If the “survival-driven” investor is focused on obtaining as much “milk” as quickly as possible, the relationship investor in the middle of the pyramid is more focused on the “cow” because it’s the cow that creates the milk. Happy cows make more milk. Warren Buffett says most investors forget that it’s the relationship with the cow that creates the success of maximum milk, or “moolah,” and he applies this long-term perspective to the businesses he invests in.

But, then there are those few, unique investors at the peak of the pyramid for whom investing creates pride of ownership. For them, investing could even be an exercise in self-actualization. Yes, they may be interested in return on investment and relationships may be fundamental to whom they invest with, but these “legacy” investors seek to change the world by the means of how they invest. The best advice I could ever give an entrepreneur is to create a purpose that’s so compelling and has benefit to the world beyond enriching yourself and see what kind of investors pop up in your life as a result of manifesting this kind of dream.

Over the past couple of years, I’ve met with dozens of investors who’ve done their due diligence on our company. The process isn’t a whole lot different than a beauty pageant with judges measuring your body parts and asking you open-ended questions. Some judges saw us purely as a vehicle for maximizing return. They were looking for “36-24-36.” Others saw that our history of creating loyal relationships with our employees and customers drove long-term results for the hotels we manage. I guess they were looking for “Ms. Congeniality.” But, in the end, literally out of the blue, the ultimate suitor who won the contest to own a majority share of this company is someone who profoundly understands that our name — Joie de Vivre — is also our mission, creating joy of life, and this investor realizes how truly powerful that purpose is to a company in a service industry like hospitality. This investor was looking for beauty beyond our stats or our ability to smile well. They gave us the crown because they could see the halo that comes from creating a purpose that’s meant to make a better world beyond the sloganeering that often comes with those words. I feel incredibly lucky to have found a primary investor who wears this pair of glasses when they make their investments.

A few months ago I dialed Southwest for some assistance and heard a recording  “Your wait time will be 10 minutes.  If you would like, you can leave your number and we’ll call you back.” I was so surprised and utterly delighted to get that message.  Finally some company respects my time!  An unrecognized need of mine was met…because I hadn’t ever imagined that a call back could be an option. All of a sudden, I had flashbacks of all the horrendous waits I’ve had on the phone over the years (don’t ask me about Dell or Time Warner).

RAISING THE BAR FOR ALL
Southwest has raised the bar for customer service hot lines. I predict that because Southwest customers will now recognize this as a need, it will now become their desire that other companies follow the same suit. This is how innovation works in the marketplace – someone raises the bar, others follow suit, and before long, it becomes a price of entry.

This is what we call “the pull of gravity” in  thePEAK Customer Pyramid (scroll down on page)

Examples:

WIFI Availability. Years ago it became expected that WIFI would be available at hotels.   Six months ago, McDonalds starting offering WIFI at some of their locations, and in the past week, Starbucks announced they will provide it for  free. (Before just their card-carrying loyalty members had access.)

Movie Theatres. The new movie theaters have stadium seating,  the ability to reserve specific seats, and even eat dinner and drink wine.  People who have had this experience may now see these amenities as a desire  (because not all movie theaters offer this).  For those who don’t have access (and/or knowledge of), these amenities will remain as unrecognized needs.

During our strategy sessions, we work with companies to identify the gravitational forces affecting their company and industry.

TEASING

About a month later, I phoned Southwest and was disappointed. They announced the wait time (around 9 minutes), yet I didn’t hear the offer for a call-back.  Last month I hadn’t even known that I had a need for an automated phone system to respect my time – yet thanks to Southwest for fulfilling that fantasy last time – it became a recognized need. My expectations for service were raised and then not met. Would I have been better off not knowing what I could have had?

SUMMARY/QUESTIONS

As a consumer, when unrecognized needs are met, they then become a recognized need.  When that need is repeatedly fulfilled, an expectation is born.

A/ Please think of an example where a need was met that you didn’t even imagine was a possibility.

B/ Can you think of an example when you felt “teased” by a company/service fulfilling an unknown need, and then subsequently not delivering it consistently?

C/ If you have raised the bar for your customers, how are you ensuring that your delivery will be consistent so that they won’t feel teased and disappointed?

D/ How long do you think it will take automated call backs to become an expectation across service hot lines? Any guesses?

Within an industry, category or in services, an unrecognized needs will eventually become a point of entry.

A/ In your industry, think about what bar has been raised.  Are you behind or ahead of the innovation?

B/ What do you anticipate will be the next innovation and are you working on fulfilling it now?

We would love to know what you are thinking out there – so let’s start a dialogue!

“What I can’t figure out is why he (Steve Jobs) is even trying (to be the CEO of Apple)? He knows he can’t win.” Bill Gates said that in a Vanity Fair interview in June 1998 with journalist Robert Cringely for a Bill vs. Steve story that was never printed (but is on tape). At the time, Microsoft’s stock market capitalization was $250 billion and Apple’s was just $6 billion, and, in fact, Apple’s capitalization was down around $2 billion a year earlier when Steve Jobs came back as CEO and Microsoft famously made a $150 million good faith investment in Apple and pledged to develop applications for Apple’s operating system. Bill was seen as the benevolent, wise one. Steve was seen as the unruly maverick.

A lot has changed in a dozen years. Microsoft’s market cap is 10% less than it was in 1998 and Apple’s has grown by 40 times. Last week, Apple officially became the most valued technology company in the world with their market capitalization surpassing Microsoft. It wasn’t just Bill Gates who counted Steve Jobs out. In 1997, Michael Dell suggested Apple should “just close up shop and return the money to shareholders.” Today, Dell’s market cap is worth about 10 cents on Apple’s dollar. Apple is worth about the same as Dell, Oracle, and HP – all put together!!! While market cap is not the only means of judging a company’s financial health, it is a good indicator of trends and of where investors see a company is going. Based upon Apple’s ascendancy and the trouble in big oil (likely new regulations due to the Gulf oil spill, dropping oil prices), there’s a chance that Apple – now the second most valuable American company – could surpass #1 Exxon Mobil in the next couple of years.

So, what’s to be learned from this remarkable story? “Your Potential. Our Passion.” That’s been Microsoft’s enormous ad campaign for years, but it really speaks to Apple’s positioning with its customers. I give 75 speeches a year and when I talk about Maslow’s Hierarchy of Needs applied to customers such that some companies create self-actualized evangelists, I always ask my audience if they can name a few companies that have done that well. 80% of the time, the first company named is Apple, according to Fortune, the World’s Most Admired Company. When Steve Jobs started the company, he saw the personal computer as a “bicycle for the mind” giving people the ability to “explore like never before.” So, Apple’s purpose had a lot to do with helping their customers realize their potential through the means of technology. It wasn’t an ad campaign. It was the DNA of the company.

Of course, Apple’s “think different” approach to opening its retail stores in 2001 was all about bringing the brand to the people, but most analysts thought is was a huge folly at the time. In fact, in 2001, the tech business was just in the early stages of its dot-com bust and Gateway was starting to close its stores while Dell was winning the personal computer war with its direct approach that had nothing to do with stores. Typically, retailers that sell you products you buy infrequently (like cars, appliances, and computers) choose low rent-locations, but Apple chose to locate their stores in highly centralized locations with expensive rent. The company designed stylish cathedrals that were a far cry from Radio Shack. These showrooms were more sleek than geek. And, of course, Apple hit a home run and they’ve continued to over and over again with their products that have moved more and more into the entertainment, mobile, and consumer electronics arenas.

In fact, it’s a bit of a misnomer to suggest Apple is the most valuable tech company in the world. Heck, Apple ain’t tech. It’s a lifestyle company, one that uses tech to enable its customers to live better lives. I’m not sure we’re going to see Apple Hotels or Apple Autos any time soon, but don’t bet against them as they’ve truly broadened their horizons (just ask any record company that didn’t consider Apple a competitor a decade ago). Legendary management theorist Peter Drucker’s favorite wisdom for business leaders was to suggest they continually ask themselves the question, “What business are you in?” In fact, I suggest that people ask this question once. Give an answer. Then, ask it again and give a deeper answer. And, then again, and again, and again until you uncover the true purpose, potential, and passion that’s at the heart of your relationship with your customer. I doubt that Apple has ever had to go through this exercise, but they’re a case study for a company (as Simon Sinek suggests in “Start With Why”) that is more interested in Why they exist than What or How they do it. I think it’s time for Microsoft to start asking why they exist.

A few years ago, I was on the computer at friend’s house and their son asked me what I was doing as I purchased a book on Amazon’s online website. I chuckled when the kid told me, “Amazon is such a big company that they named a river in South America for them.” I wouldn’t be surprised if our kids and our kids’ kids some day think that Steve Jobs long ago licensed the rights to his company’s name to farmers who plant trees with those shiny, red and green juicy fruits in them. There’s no more powerful brand than Apple.

Although the relevance of Maslow’s Hierarchy of Needs is universal, how employees might want those needs fulfilled may differ. Some of those differences can be attributed to individual preferences and others to cultural or socialized preferences.

We invite you to consider the questions below while remembering that these are broad questions that are meant to facilitate a conversation. The purpose is not to stereotype or put people into boxes, but to encourage you to use a wide-angle lens in thinking about your employee population.

The best thing to do is to encourage managers to get to know their employees and what is important to them as individuals.  Exploring these questions may make for a more meaningful manager-employee conversation.

• How might the need for compensation, benefits/perks and job security vary by generation, culture, country of origin, gender, and sexual orientation?

• How might the need for affiliation with the organization or colleagues (and/or how it is fostered) differ by generation, culture, country of origin, gender and sexual orientation?

• How might the need for recognition (and/or the way it is delivered) differ by generation, culture, country of origin, gender and sexual orientation?

• How might the need for meaning (and how and where it is found) vary by generation, culture, country of origin, gender, and sexual orientation?