November 11, 2013

Peak
How Great Companies Get Their Mojo from
Maslow
Chip Conley

©2007 by Chip Conley

Adapted by permission of Jossey-Bass, a Wiley imprint
ISBN: 978-0-7879-8861-6

Key Concepts
• The classic psychological theory of Abraham Maslow’s
Hierarchy of Needs can be directly applied to the busi-
ness world. Only by fulfilling the lowest unmet need
on Maslow’s pyramid can a business begin to rise
to its peak performance level.
• Inspiring motivation, loyalty, and inspiration in one’s
employees is also a matter of building a pyramid. The
base of the pyramid is money. The next level is rec-
ognition. The top of the pyramid is meaning.
• Customers can only reach peak satisfaction after they
have had their basic expectations and desires met. In
order for happy customers to become brand evan-
gelists, the company must meet customers’ unrec-
ognized needs.
• Investors must have three levels of their pyramids met
in order to feel that they can both trust in their invest-
ments and take pride in them. The base of the inves-
tor pyramid is transaction alignment, followed by
relationship alignment. The peak is legacy.
• Putting the truths of these various business pyramids
into action requires a company to “bring it all together”
around a “heart.” This heart consists of various ele-
ments of the company itself: corporate culture, en-
thusiastic staffers, loyal customers, and profit.
Introduction
In the updated edition of Peak, Chip Conley presents
a business lesson that is part memoir, part psycholog-
ical manual, and part business guidebook. Taking his
cues in business from the work of psychologist Abra-
ham Maslow, Conley argues that any company can
use Maslow’s Hierarchy of Needs pyramid model of psy-
chology to build a stronger company. Using Maslow’s
work as a jumping-off point, Conley explains how he
used his own unique brand of pyramid principles to
rejuvenate his hospitality corporation. The pyramids
devised by Conley are helpful when it comes to deal-
ing with employees, customers, and investors.

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Peak Chip Conley
Part One: Maslow and Me
Toward a Psychology of Business
Conley, the founder and CEO of San Francisco-based
Joie de Vivre Hospitality, begins his memoir/manual
by flashing back to 2001. As the year began, his com-
pany was expected to flourish, as it had done in the
months and years past. But in the wake of the dot-com
bubble bursting, the terrorist attacks on 9/11, the SARS
scare, and a downturn in the economy, his group of
luxurious hotels and spas took a big financial hit.
In the aftermath of these hits to the hospitality indus-
try as a whole, Conley decided to take another look
at the traditional path of the corporate ladder. He
focused on incorporating teachings from psycholo-
gist Abraham Maslow into his own management
style, believing that this fresh approach would give
his business “mouth-to-mouth resuscitation.”
Maslow is most famous for his pyramid-shaped depic-
tion of the Hierarchy of Needs. Arguing that human
beings are programmed to keep searching for com-
plete satisfaction after meeting one “level” of need
in their lives, Maslow’s pyramid has a foundation
of physiological needs. It is only after physiological
needs like food and water have been met that a person
can focus on the next level of need: safety. After safety,
the next step on the pyramid is “social/belonging.”
Once a person feels safe, secure, and ensconced in a
social group, he or she can progress to the next level
of the pyramid: esteem. Once a person has developed
sufficient self-esteem, he or she can then reach the
summit of the pyramid: self-actualization. It is only at
this pinnacle that human beings can reach their great-
est dreams and unlock their full potential.
Conley believes that his use of Maslow’s principles is
what allowed his company to weather a bad financial
market. Describing his methods as the Relationship
Truths Pyramid, Conley conceived a multiple-pyramid
system that explains the relationship truths businesses
must embrace when dealing with their employees,
customers, and investors.
Karmic Capitalism
Good business practices can build good karma. In
turn, good managers build good enterprises, which
can lead to self-actualization. Conley outlines four
key premises of building business karma:
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1. Every company is organized based on a certain
premise of human nature.
2. Most companies are not conscious of this fact and
therefore operate based on an outdated perspec-
tive.
3. Companies have a habitual “tendency toward the
tangible,” meaning that companies tend to put
their bottom lines ahead of relationships.
4. An increasing number of business consultants are
making the intangible nature of relationships more
tangible. As a result, many companies are now re-
organizing based on the pursuit of both profits and
happiness.
Drawing from Maslow’s pyramid diagrams, Conley
presents a three-tiered pyramid of his own called the
Transformation Pyramid. Working from the bottom to
the peak, the pyramid consists of three levels:
1. Survival
2. Success
3. Transformation
Further Information
Information about the author and subject:
chipconley.com
Information about this book and other business titles:
www.josseybass.com
Click Here to Purchase the Book
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and the Science of Success
By Matthew Syed
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By Simon Hartley
Peak Chip Conley
This pyramid illustrates the point that success and
transformation of a business can seem intangible.
When these two tiers are grounded to the base level
of survival, however, the path to success seems a bit
clearer.
The Relationship Truths
Conley has devised three “relationship truths” about
business. Each truth takes the form of a three-tiered
pyramid, inspired by Maslow’s pyramid:
1. The Employee Pyramid
• Base: Money/Survival: Cre-
Today, many people see their workplace as a playground for who
ates base motivation. they are and what they can become.
• Middle: Recognition/Suc-
cess: Creates loyalty.
• Peak: Meaning/Transformation: Creates inspi-
ration.
2. The Customer Pyramid
• Base: Meets Expectations/Survival: Creates sat-
isfaction.
• Middle: Meets Desires/Success: Creates com-
mitment.
• Peak: Meets Unrecognized Needs/Transforma-
tion: Creates evangelism.
3. The Investor Pyramid
• Base: Transaction Alignment/Survival: Creates
trust.
About the Author
Chip Conley is the founder and CEO of Joie de
Vivre Hospitality, California’s largest boutique
hotel company, consisting of over 40 award-
winning hotels, restaurants, and spas. He is the
author of The Rebel Rules: Daring to Be Yourself
in Business and Marketing That Matters: 10 Prac-
tices to Profit Your Business and Change the World.
Conley received his BA and MBA from Stan-
ford University. He has an honorary doctorate
in Psychology from the Saybrook Graduate
School. He lives in San Francisco.
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• Middle: Relationship Alignment/Success: Cre-
ates confidence.
• Peak: Legacy/Transformation: Creates pride of
ownership.
As with Maslow’s pyramid, each of these relationship
truth pyramids has a foundation of tangible needs,
with a peak that has a more intangible property. These
pyramids remind people that while focusing on what
is important, people should also look to what could
be.
Part Two: Relationship Truth 1: The
Employee Pyramid
Creating Base Motivation
For an employee, the base motivation for seeking
employment is compensation; this is why money is
at the base of the employee pyramid. Salary is impor-
tant, but a benefits package is also key for motivating
employees. The more solid the base of the pyramid
is, the easier it will be for employees to rise up to the
next levels.
Conley presents five Peak Prescriptions, or suggested
actions, for helping companies firm up their compen-
sation bases:
1. Determine how employees view the company’s
compensation package.
2. Ask employees “What one thing could we do to
improve benefits packages or job security?”
3. Benchmark what similar companies are offering
their employees.
4. Do an internal audit of how well the compensation
package is publicized to employees.
5. Search for perishable assets that would make a dif-
ference to employees.
Creating Loyalty
Creating a sense of loyalty is vital to retaining tal-
ented employees. One tried-and-true way to foster
loyalty is through institutionalized recognition pro-
grams. In his estimation, Conley finds that the best
Peak Chip Conley
organizations are the ones that manage to establish a
link between what employees are rewarded for and
what their organizations stand for.
There are two main forms of recognition: informal rec-
ognition and formal recognition. Informal recognition
includes any form of sincere and deserved positive
feedback given during the course of a normal busi-
ness day. Formal recognition can include a company
holiday party or BBQ where employees are praised,
though Conley notes that these kinds of events can
get stale over the years without proper oversight.
To create a “culture of recognition” that will foster
employee loyalty, Conley recommends several Peak
Prescriptions:
• Developing recognition training programs for
midlevel managers.
• Creating a signature method for helping managers
understand the importance of really “seeing” an
employee.
• Teaching all managers how to personalize their ap-
proaches to employee recognition.
• Using employee reviews as a formalized time to
show recognition.
Numerous studies have shown that the companies most likely to
create sustained profits are those that have an enduring purpose
that balances the various needs of stakeholders.
Creating Inspiration
Conley recounts a story of how he came to realize
the value of the hospitality industry, an incident that
inspired him to embark on his life’s work of running a
hospitality corporation. When traveling in Germany,
Conley contracted a nasty stomach virus. Although
he was unable to speak the local language, he man-
aged to find a room in a small bed and breakfast.
Before he was able to give the bed and breakfast
owner any money, she whisked him off to bed and
ensured that he had homemade chicken soup, selt-
zer water, fresh flowers, and an English-language
newspaper waiting for him when he woke up. This
incident helped Conley to see the hospitality industry
as more than just a way to provide a roof and a bed.
Conley’s experience in Germany showed him that the
Business Book Summaries® November 11, 2013 • Copyright © 2013 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved
hospitality industry has a nobler purpose: to take care
of vulnerable people who were far away from home.
Being able to find a deeper meaning in a company’s
purpose is a key way to create inspiration among
employees. Inspiration is at the pinnacle of the
employee pyramid. Conley notes that Maslow’s own
research indicated that nurses who could identify a
“peak experience” on the job were the ones who were
most connected and satisfied with their work.
Conley argues that finding meaning in the workplace
is more important today than in past generations for
three main reasons:
1. Corporate transformation follows personal trans-
formation.
2. Work is a more dominant part of people’s lives than
ever before and has replaced some social structures
that previously created meaning.
3. Companies that create lasting success have a deep
sense of mission and meaning tied in with what
they do.
Part Three: Relationship Truth 2: The
Customer Pyramid
Creating Satisfaction
Creating satisfaction is the first
step on the customer pyramid.
Delivering goods or services that
meet the expectations of custom-
ers is the basic foundation of a good business.
Conley asks readers to visualize the expectations
of their customers as a horizontal line. If a business
delivers below that baseline, the customers will feel
disappointed. In fact, the business will not even regis-
ter on the first level of the customer pyramid. Meeting
expectations is the foundation for building a good
customer relationship.
To build the foundation of the customer pyramid,
Conley suggests four Peak Prescriptions:
1. Using existing customer satisfaction measuring
tools in a more effective way.
2. Reaching out to customers with more direct ques-
tions.
Peak Chip Conley
3. Moving beyond looking at customer satisfaction
surveys and examining the broad category of com-
peting companies in the same field.
4. Engaging executives and employees in a brain-
storming session about how to apply Maslow’s
Hierarchy of Needs to the needs of a company’s cus-
tomer base.
Creating Commitment
People are more likely to trust a company that is
humble, relatable, and engaged. Genuinely engaging
with customers and potential customers can provide
a company with access to the social and esteem levels
of Maslow’s pyramid.
Creating a sense of commitment amongst customers
is all about understanding a customer’s underlying
desires, even if the customers themselves are unable
to articulate those needs. To meet those needs, Con-
ley’s Peak Prescriptions include:
• Engaging intimately with customers to understand
their desires.
• Using technology to test concepts with customers
before officially launching them.
• Considering how to build a “learning relation-
ship” with customers, thus building segments and
breaking down the “one size fits all” way of look-
ing at customers.
• Addressing the social and belonging needs of cus-
tomers by making them feel like they are part of
something bigger than them-
selves. Lagging indicators
• Taking inventory of the staff really the leading indicators that have the greatest influence on
and determining if there is at where the company is going.
least a 2:1 ratio of superstars to
weak links. Superstars can lead the way for weak
links.
Creating Evangelists
Joie de Vivre creates evangelists by creating envi-
ronments where guests feel self-actualized and
reconnected with a part of themselves. For example,
guests at the Hotel Rex feel intellectually stimulated
by virtue of the hotel’s literary theme, while visitors to
the Hotel Vitale feel a sense of wellbeing brought on
by complimentary yoga classes.
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The peak of the customer pyramid is all about meet-
ing unrecognized needs, and thereby transforming
something within the customers themselves. When
all else is equal between two boutique hotels, Conley
believes his hotels will beat the competition because
of their ability to address the unrecognized needs of
customers. Once evangelists have been created, they
are willing to pay peak prices and “spread the gospel”
about the company.
Two other companies that Conley cites as examples of
“peak companies” in this regard are Apple and Har-
ley-Davidson. Conley’s analysis of Apple produces
a customer pyramid with a base of product displays
and good service, and a second level that revolves
around the Apple Store, or “a clubhouse where you
can communicate your identity.” The peak of the
pyramid consists of Apple’s ProCare and Genius Bar
offerings.
Conley’s analysis of Harley-Davidson produces a
customer pyramid with a base of the “rider’s edge,”
a reference to the Harley program where potential
customers are given a motorcycle training course.
The cost of this course can then be applied to a new
motorcycle purchase. The second tier of the pyramid
consists of “H.O.G.s” or Harley Owner Groups, where
Harley owners get together and enjoy their shared
sense of identity. The peak of the pyramid is freedom
of expression, because Harley owners feel that their
bikes represent their own rebellious and independent
spirits.
may predict future performance, but it’s
Conley outlines four “themes” that reside at the top
of the customer pyramid to create self-actualized cus-
tomers:
1. Helping customers meet their highest goals.
2. Giving customers the ability to express themselves.
3. Making customers feel like part of a bigger cause.
4. Offering customers something of real value that
they had never imagined.
Peak Chip Conley
Part Four: Relationship Truth 3: The
Investor Pyramid
Creating Trust
Aligning the goals of an organization with the inter-
ests of investors can be difficult, particularly during
turbulent economic times. This is a lesson that Conley
had to learn the hard way when one of his luxury
properties was sold off when the short-term financial
needs of his investors were not in alignment with Joie
de Vivre’s long-term projections for the property.
However, just because investors tend to focus on the
bottom line does not mean that they are incapable of
human emotions. Conley argues that investors are
not “ROI robots” that only care about money. That
is why money is not the foundation of the investor
pyramid; instead, the foundation is built on trust.
Investors need peace of mind and transactional align-
ment in order to conduct their businesses. Honest,
direct, and regular communications with investors
will help build that level of trust.
Creating transactional alignment is a matter of find-
ing common ground across five primary fields that
affect both organizations and investors:
1. Rate of return.
2. Liquidity timing and strategy.
3. Definition of the market and the company’s ap-
proach to differentiation.
4. Cash needs to execute the business strategy.
5. A single metric that defines effectiveness.
Your company’s history, location, the nature of your employees
and customers, and the nature of your industry will all influ-
ence your cultural choices.
Creating Confidence
When ROI is the only glue holding a company-inves-
tor relationship together, the relationship is likely
to be of a short duration. A long, fruitful investor-
company relationship is often based on an emotional
component. It is important for companies to seek out
investors who are interested in active collaboration,
fostering an emotional and confidence-based attach-
ment to what the company is doing.
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When it comes to creating investor confidence, Conley
offers three Peak Prescriptions:
1. Choose investors who are interested in moving
beyond pure transactional alignment, and explore
their deeper motivations for investing.
2. For investors who have social or belonging needs,
consider a social event like an annual shareholders
meeting.
3. Consider perks that can sweeten the relationship,
such as VIP treatments or friends and family dis-
counts.
Creating Pride of Ownership
The peak of the investor pyramid is legacy, which
gives investors pride of ownership. Although pur-
pose is what drives profits, not every investor is
interested in the transformational power of purpose-
driven investing. That being said, Conley has found
multiple studies that support the idea that the most
profitable companies are the ones that have an endur-
ing purpose.
There are two main types of investors who care about
legacy. The first group contains progressive hierarchical
investors who still care about the bottom line, but who
also want to invest in something with a lasting legacy.
The second group consists of philanthropic investors
who aim to use their financial contributions to change
some aspect of the world around them and care less
about returns on their investments.
Part Five: Putting the Truths Into
Action
The Heart of the Matter
Reaching the summit of the three
pyramids is an important goal,
but it is equally as important to
understand the complex interplay
between the customer, employee, and investor pyra-
mids. By determining how a specific organization’s
pyramids fit together, a fuller picture of the com-
pany’s corporate culture begins to appear. Culture is
the “glue” that holds an organization together. For
example, Conley credits Southwest Airline’s unique
corporate culture with making it “the only consis-
tently profitable airline in the post-9/11 era.”
Peak Chip Conley
Finding a corporation’s culture is tantamount to
finding its heart. In Conley’s own corporation, new
employees are given a laminated card with the
“heart” of Joie de Vivre printed on it during orienta-
tion. In the case of Joie de Vivre, the heart consists of
four precepts:
1. Creating a unique corporate culture.
2. Building an enthusiastic staff.
3. Developing strong customer loyalty.
4. Maintaining a profitable and sustainable business.
Once the heart has been identified, Conley suggests
a model that ties the heart to the three pyramids.
This comprehensive model is called the Relationship
Truths Pyramid. The employee pyramid and the inves-
tor pyramid sit side by side, forming the base of the
larger pyramid. The heart sits in between these two
pyramids. On top of the heart, the customer pyramid
forms the top of the larger pyramid. The heart is the
core that holds the three smaller pyramids together.
Creating a Self-Actualized Life
The final step in incorporating Maslow-style pyramids
into a corporation’s organizational structure involves
taking the philosophy of the previous chapters and
applying it to one’s daily habits in the workplace.
To do this, Conley shares a quote from Maslow, some-
thing that Maslow would often say to his students:
“Which of you believe that you will achieve great-
ness?” When his students would fail to speak up,
Maslow would follow up his question with another:
“If not you, who then?” Conley suggests that asking
these questions daily is a good starting point for
incorporating the lessons learned from this book into
day-to-day workplace habits.
Creating a self-actualized life starts with these kind of
daily affirmations. From there, it is possible to begin
climbing one last pyramid: the Job, Career, Calling
Pyramid. Conley shares a parable about three stone-
cutters to illustrate this pyramid-style approach to job
satisfaction: Three stonecutters were asked what they
were doing along the side of a road. The first viewed
his work as just a job, so he said simply, “I am making
a living.” The second was prouder of his work and
viewed it as a career, so he said, “I am doing the best
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job at cutting stone in the county.” The last stonecut-
ter was passionate about his work, and viewed it as
his life’s calling. He said, “I am building a cathedral.”
Great business leaders create transformation in both
themselves and the companies they run. The pur-
suit of peak experiences is what drives a business to
achieve great goals and satisfy the highest needs of
customers, investors, and employees.
g g g g
Features of the Book
Estimated Reading Time: 5–6 hours, 243 pages
In Peak, Chip Conley outlines how businesses can
learn from and adopt the psychological concept of the
Hierarchy of Needs, as dictated by psychology legend
Abraham Maslow. As one would expect in a book
that draws on Maslow’s pyramid model, this book is
filled with multiple pyramid diagrams that have been
adapted to the business community. Each chapter also
includes a list of books for further reading. Focused
on the “holy trinity” of employees, customers, and
investors, Conley’s book is designed to be read cover
to cover. Of interest to CEOs, entrepreneurs, HR pro-
fessionals, investors, and anyone who has had to
rebuild a business after an economic downturn, this
memoir/manual makes a compelling argument for
using psychology to build a successful company.
Contents
Foreword
Preface to the Updated Edition
Preface
Part One: Maslow and Me
1. Toward a Psychology of Business
2. Karmic Capitalism
3. The Relationship Truths
Part Two: Relationship Truth 1: The Employee
Pyramid
4. Creating Base Motivation
5. Creating Loyalty
6. Creating Inspiration
Peak Chip Conley

Part Three: Relationship Truth 2: The Customer

Pyramid
7. Creating Satisfaction
8. Creating Commitment
9. Creating Evangelists
Part Four: Relationship Truth 3: The Investor
Pyramid
10. Creating Trust
11. Creating Confidence
12. Creating Pride of Ownership
Part Five: Putting the Truths Into Action
13. The Heart of the Matter
14. Creating a Self-Actualized Life
References
Acknowledgments
The Author
Index
g g g g

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