WHAT BUSINESS LEADERS CAN LEARN FROM BHUTAN

[Originally posted Feb. 2, 2010 on the Huffington Post]

Having spent the past 32 years in the Silicon Valley/Bay Area region, I guess I’ve grown accustomed to start-ups wreaking havoc in mature industries.  Hewlett-Packard, Apple, Google, Facebook….they all were launched within a 15-mile radius of my alma mater, Stanford University, and they went on to revolutionize not just their industry, but they changed our relationship with technology and, frankly, in Facebook’s case, our relationships with each other.

So, it’s no surprise that I’m fascinated with a little, almost-mythical country in the Himalayas that is revolutionizing how world leaders are looking at the definition of success.  Like The Mouse That Roared (a popular book and film from the late 1950’s about an imaginary, bucolic country situated between France and Switzerland that becomes the admiration of modern society when it declares war on the United States), Bhutan is getting the kind of attention an off-off-Broadway play gets when you know it’s destined to be a hit.  In 1972, the 17-year old King of Bhutan asked the blasphemous question, “Why are we so focused on Gross Domestic Product? Why aren’t we more concerned with Gross National Happiness?”  For nearly 40 years now, Bhutan has been reinventing itself based upon the premise that the ultimate public good a leader can provide his or her people isn’t material possessions, but instead it’s happiness or well-being.

This “beginner’s mind” idea has found fertile ground in the 21^st Century as more than 40 countries are now studying their own GNH (Gross National Happiness).  Nicolas Sarkozy recently announced what some are calling a “joie de vivre index” in France based upon an 18-month study of two Nobel economists who recommended that the largest countries of the world end their obsession with GDP and consider some new intangible metrics.  In essence, they’re suggested that GDP – which focuses exclusively on tangible production and consumption – no longer should be our sole definition of global success especially at a time when 64% of the world’s GDP now comes from the intangible service industry.  In other words, GDP measures outputs which might have made sense in a more mechanized, industrial era.  But, given the knowledge era we now live in, measuring those inputs that influence the output is a more holistic method of evaluating whether we’re creating sustainable success.

This may seem abstract, but it’s extremely relevant to business leaders who have come to realize that a myopic focus purely on the bottom line can have the same effect as driving a car at full speed all the time without doing occasional maintenance and refueling.  Here are three important lessons for business leaders to learn from Bhutan:

(1)   Leaders don’t create happiness for people.  The Prime Minister of Bhutan told me his goal is “to create the conditions in which happiness can flourish.”  Abraham Maslow once suggested business leaders “can set up the conditions so that peak experiences are more likely, or one can perversely set up the conditions so that they are less likely.”  Great leaders create healthy habitats.  From those healthy habitats sprout the outputs we’re looking for whether it is happy citizens or a profitable business.  Silicon Valley has an eco-system that is primed for innovation, but as many regions of the world have learned, you can’t easily replicate the intangibles that create such a cultural habitat.  So, first brainstorm with the leaders in your company about what cultural “conditions” would help your company flourish and what kinds of specific things you can do to create that habitat.

(2)   Leaders value and measure the intangible.  The Bhutanese have created a science behind the art of happiness.  They measure four (4) pillars, nine (9) key indicators, and 72 various metrics to help them understand whether they are creating fertile conditions for happiness.  The Gallup organization has developed 12 questions that help leaders measure employee engagement like “At work, do you have the opportunity to do what you do best every day?” or “Does the mission/purpose of your company make you feel your job is important?” (It’s time for leaders to distinguish between what they can easily count (“Are you being paid enough?”) with what employees most value.  The intangibles of mission and meaning are powerful fuel for knowledge-driven industries, so find ways to measure these vital inputs.

(3)   Leaders are willing to deviate from the norm.  Most world leaders didn’t take notice when the teenage King of Bhutan asked his impertinent questions about GDP.  Those that did notice chuckled and chalked this idea of GNH up to “Buddhist economics.”  But, if you’re a small country or a small company, your best strategy to compete with the big boys is to find a niche and own it.  In my case when I started my company 23 years ago by purchasing an inner-city motel, I went after rock ‘n roll bands as our core customer, even though conventional hoteliers told me I was crazy to want these party animals.  Yet this target customer was perfectly suited to my funky motel and this was an untapped market (bands) that was growing and recession-proof.  Similarly, it took 30 years for the world to embrace Bhutan’s approach to GNH, yet this “happiness niche” has turned out to be much larger than the King of Bhutan ever imagined.  Find a niche, embrace it wholly even if it’s unconventional, and deliver on your promise better than any of your competitors.

Add comment February 3rd, 2010

THE YEAR OF WANTING WHAT WE HAVE

Happiness surveys typically are a little suspect partly because the definition of happiness is so loose.  This is especially the case for surveys that blindly rely on simple self-assessments of the respondents.  But, happiness surveys during the holiday season are probably even more tainted given the unique love/hate relationship people have with this time of year.  Yet, when three different polls are revealed in December that consistently say that Americans have made great strides in their happiness you have to take notice.

A mid-December poll of 1,000 Americans by AP-Gfk showed that 78% of Americans are either very or somewhat happy – some seriously spiked egg nog must have made its way to that bunch.  Another survey of 1.3 million Americans was just revealed by Brit and American researchers and found higher levels of happiness than anyone expected.  They also found these results tracked their independent evaluation of the portions of the country that had the greatest intrinsic quality of life based upon a variety of measures.  Oddly, Louisiana was #1 in both happiness and the researchers’ perspective on quality of life.  Given that this state is normally in the bottom ten of most surveys for just about everything, they must have asked the question around Mardi Gras time when the environmental “joie de vivre” is quite high in the Pelican State or maybe the locals are just happy their NFL Saints are winning.  Finally, the Gallup-Healthway Daily Life Evaluation Index of random Americans is now 50% higher than it was a year ago and is at a historically high level.  Are we lying to the researchers or are we just high on life?

One of my favorite musicals of all time is RENT.  There’s a goosebump-creating song with the enchanting lyrics of “525,600 minutes…how do you measure a year?”  This play was a modern take on the classic La Boheme and suggested that Americans could find happiness by being a little more bohemian.  Is that what 2009 signifies?  Our stab at a little piece of bohemia in the heartland?  Are we measuring our own happiness in new ways now that we have a “new normal?”  If disappointment equals expectations minus reality, does ratcheting down our expectations create the opposite of disappointment?

I came face-to-face with potential answers to these questions in San Francisco’s bustling Union Square shopping district last week.  I ran into a friend from college who was with his wife and two kids.  They had just embarrassed themselves on ice skates in the open air of the Square.  The four of them giggled like they were on laughing gas and my buddy told me he’d “never been happier.”  So, being a bit of a happiness researcher myself, I asked him what’s going on in his life.  He told me that both he and his wife had been laid off in Silicon Valley a year earlier.  They fretted the first three months and then they downsized everything in their lives from their home to their cars to their vacations to how they spent money on food.  In fact, they’d chosen this year to only give “Christmas experiences” to each other.  No material gifts.  No standing in line at department stores.  No traffic at the mall.  Each of the four members of the family were responsible for giving three experiences to each of the three other members, with ice skating in the city being an example of one of them.  Somehow I imagined Henry David Thoreau sitting on my friend’s shoulder whispering his famous quote from Walden Pond: “That man is the richest whose pleasures are the cheapest.”

And, instead of desperately seeking jobs, he and his wife chose to volunteer for a couple of non-profits they’d always admired but never had been able to engage with.  Before he shoved off for their next family experience in the city, my friend lobbed a philosophical softball my way: “success is having what you want, while happiness is wanting what you have.”  Dude, where did you learn that?  I don’t remember that class at Stanford!  Interestingly, four of the five states at the bottom of that happiness poll I mentioned earlier were the success-motivated, aspiration treadmills of California, Connecticut, New Jersey, and New York.  Is this some communist plot to lull us into capitalistic complacency?  I noticed in that same poll that Hawaii came in second behind Louisiana.  Between the Bourbon Street booze and the Maui wowie, I guess I can understand why those two states are so happy, but what does this mean for the future of our country?

What if Forbes magazine were to follow up their cover article featuring the 400 Richest People in the country with a cover story of the 400 Happiest People in the country?  Maybe it’s time to redefine the idea of wealth.  I suspect that while 2009 has been an emotional rollercoaster for so most of us, it’s also been a year for wanting what we have rather than being obsessed with what we want.  It seems as if gratification gave way to gratitude.  And, maybe our painful sense of entitlement is evaporating as a result.  There’s no doubt that the Great Depression three quarters of a century ago was a great equalizer and humbler.  It brought people together and it shifted expectations.  And, from the ashes of that burned-out economy, perseverance and ingenuity led to three decades of unparalleled progress in the 1940’s through 60’s.  So, I guess it’s time for us to put our feet up, relax a little, and know that good times are ahead.  More importantly, just as I learned from RENT, the good times are now and we have 525,600 moments per year to experience them.

Add comment December 30th, 2009

THE BRIGHT LIGHT TURNS ON DURING THE DARK TIMES

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.

Add comment December 17th, 2009

WHEN AN ENTREPRENEUR BECOMES A CEO

[Originally posted Nov. 9, 2009 on the Huffington Post]

Why are entrepreneurs loved and CEO’s hated?  It’s a bit of irony that has not been lost on me this past week as a bunch of cyber-strangers weighed in on their perception of me based upon a photo.  Is this a crazy entrepreneur or a CEO who has lost his mind and proper bearings?

Back in June, the Rasmussen Reports released a survey of Americans’ favorable vs unfavorable ratings of various professions.  At the top of the list with almost no negativity were small business owners and entrepreneurs.  Religious leaders were a fair percentage back, but still near the top.  Bankers were evenly loved and hated, while journalists, lawyers, and stockbrokers started to make up the bottom of the list.  But, in the valley of the despised were CEO’s and Members of Congress.  Three times as many people give these two professions negative ratings as compared to the positives.

So, what happens when you start out as an entrepreneur but grow into being a CEO due to the success of your company?  Is Steve Jobs an entrepreneur or a CEO?  How about Richard Branson?  So much of it has to do with how you show up - are you still yourself or have you become the empty, shifty “suit”?  Well, I started my company almost two dozen years ago as sort of an artist entrepreneur and I’ve been getting “atta boys” along the way.  Yet, when I showed up in the Nevada desert to enjoy a few days of artistic utopia at Burning Man, had a few pics taken of me, and then posted them on my Facebook account, the question of whether I was a wacky entrepreneur or a father figure CEO made me a cause celeb the past few days.  Take a look at the blog I wrote for BNET and the nearly 150 comments that arose from this topical question of how much of a CEO’s personal life should we be exposed to?

http://www.bnet.com/2403-13058_23-358555.html 

What’s most fascinating is to read that those who championed my right to be myself saw me as a grown-up entrepreneur, but those who thought I’d crossed the line by posting my Burning Man photos to my private Facebook account saw me as the CEO who had a certain decorum of professionalism that I needed to maintain (even though, frankly, that sterile decorum may be one of the reasons why Americans score CEO’s so low).  One of those who counseled me on being a little more professional writes as if he were a self-hating CEO, “As much as you may not enjoy it, being a CEO brings with it the serious responsibilities of being a parental role model.”  Clearly, this parental thing ain’t working based upon the Rasmussen results.  More encouraging were the comments like “I am glad to see someone can be successful and not turn into a soulless robot” or “how refreshing it is to see a CEO who is also a human.”

One common comment was that I should separate my friends from my business associates on my Facebook page and only let my friends into that part of my site that might have photos like this.  I don’t know what century they’re living in, but many of us - especially those who work long hours in business - find that some of our closest friends are those we connect with during our business day.  This work/life frappe has created a blended experience in which it’s harder than ever to compartmentalize.  Thank God….we may put a few shrinks out of business, but we’re likely to be a whole lot happier.  Public image should equal private reality.

Ironically, my first book’s subtitle was “Daring to be Yourself in Business,” and I’m seeing how vital that is in the age of transparency.  With the internet and social networks taking a more prominent place in our lives, being true to yourself (and everyone else) is almost a requirement.  In fact, I’d suggest that the Rasmussen poll is really a litmus test for authenticity.  The more people see the participants in the profession as authentic, the more heroic they become in the eyes of the public.  Authenticity is where the culture is headed.  It’s an evolutionary process (coincidentally, the theme of this last year’s Burning Man was “Evolution”).  And, I’m still just figuring out my evolutionary process of gravitating from being an entrepreneur to being a CEO.  Yet, this experience has just reinforced a powerful lesson.  Maybe the role model CEO I’m supposed to be isn’t the traditional icon that people don’t like and don’t trust, but it’s the CHO: the Chief Human Officer.  That’s really the conundrum a modern age role model CEO must solve: how can we be human and be a CEO at the same time?

Add comment November 10th, 2009

IS CONSCIOUS CAPITALISM AN OXYMORON?

[Originally posted Oct. 30, 2009 on the Huffington Post] 

Unconscious Capitalism…we’ve witnessed that.  Even Drunk Capitalism may sound more accurate than Conscious Capitalism.  But, the truth is we can’t afford to have Capitalism be anything but Conscious given the stakes involved and the power wielded by the world of business. I’ve just come back from the second annual Conscious Capitalism conference in the hill country of Austin.  This gathering of CEO’s, entrepreneurs, financiers, and academics gave me some encouragement that those handling the machinery of industry have come to realize that they can’t operate this delicate and powerful equipment while inebriated on short-term ambition and unconscious plundering.

What does it mean to be a conscious capitalist?  Here’s my stab at a list of 5 basic rules (fueled by some of the discussions at the conference):

(1)     Focus on the Long-Term.  While short-term profits are the milk, smart investors and business execs understand that building a relationship with the cow is far more valuable in the long-term.  Warren Buffett asks his CEO’s to operate their businesses as if they were never to be sold or merged for 100 years.  And, the academic authors of “Firms of Endearment” have proven that long-term minded companies outperform the S&P 500 by eight times over a ten year period.

(2)     Bow at the Altar of Purpose.  An expansive Purpose that addresses the needs of a broad definition of stakeholders – employees, customers, vendors, the community, the environment, not just investors – provides an animating and attracting force for a company.  Proctor & Gamble’s new CEO recently remade the company’s business plan so that it is purely focused on how P&G delivers on its Purpose to all of its broad definition of stakeholders.  And, great companies from Southwest (“freedom to fly”) to Apple (“a bicycle for your brain”) have great Purposes that energize those who come into contact with them.

(3)     Think of Business as a Practice.  Few of us see businesspeople as “practicing” their craft like a doctor, lawyer, athlete, musician, or spiritual leader.  But, this new generation of leaders at companies like Patagonia (which is now teaching Wal-Mart how to green their supply chain), Whole Foods Markets, and PepsiCo are approaching their work with a level of conscious practice that suggests that they understand there’s a systemic effect in the decisions they make.  Kip Tindell, CEO of the Container Store, says that leaders need to understand the size of the “wake” they create based upon the decisions they make.  Business leaders can no longer afford to take an unconscious “just do it” approach to how they make decisions.

(4)     Redefine what Winning means.  Life and business are all about where you pay your attention.  MBA’s have been taught to “manage what you can measure,” but unfortunately, what’s most measurable in life and in business isn’t usually what’s most valuable (think Mastercard’s “Priceless” commercial).  Conscious capitalists recognize that intangibles like brand value, culture, and intellectual property are making a mockery of the 500-year old tradition of the balance sheet where these valuable assets can’t be found as line items.  The good news is that “valuing intangibles” has become the hottest topic on American business school campuses.  Jack Welch’s traditional bottom-line definition of “Winning” has lost its luster.

(5)     Leverage Loyalty.  Leverage has been a dirty word this decade and we’ve even created new recessionary phrases like “America is de-levering herself” (that just sounds painful).  Yet, the ultimate leverage in a downturn is loyalty.  In today’s “word of mouse” era in which social media and Web 2.0 sites are the primary means that people use to tell their friends and colleagues about their favorite (or least favorite) products or companies, reputation and loyalty have become the primary sustainable competitive advantage for companies.  Tech-savvy leaders like Tony Hsieh at Zappos (who has tens of thousands of followers on Twitter) have created an evangelical collection of customers that is leveraged into market share momentum.

We may be entering an era of Karmic Capitalism when business realizes what goes around, comes around.  Let’s hope that the captains of industry realize that noblesse oblige (nobility is obligated) – a century’s old concept – should be applied to the business world.  Since corporations are treated as if they are a body, they should also have some of the obligations of citizenry in terms of what they give back and contribute to the good of society.  And, they should be held accountable for operating in this fashion.

Add comment November 4th, 2009

JDV > GDP? SARKOZY STIMULATES SARCASM

[Originally posted Sept. 29, 2009 on the Huffington Post]

As the world’s leaders descended on the burg of Pitts, that rascal Sarkozy handed out a French-made pair of 3-D glasses.  Upon the one-year anniversary of the financial meltdown, the French president suggested that we’ve been evaluating the financial world with one eye closed and have been distracted by the “cult of statistics” that traditional economists feed us.  Now that his Nobel-winning duet of economists (Joseph Stiglitz and Amartya Sen) have delivered their report that suggests France adopt a “Joie de Vivre” index, this conservative president has started sounding like a leftist or at least someone who spends a little too much time reading Sartre in Left Bank cafes.  And, of course, the conventionally wise around the world chortled about how naïve this diminutive president could be since happiness and joie de vivre aren’t really measurable.  In fact, for most economists, if you can’t measure something accurately, it ain’t real.  Maybe that’s why economists are such a glum bunch.

What is the recipe for success for a country?  We’ve been worshiping at the altar of Gross Domestic Product for nearly a half-century, yet one observer recently suggested, “If we all put bars on our windows and buy face masks to deal with pollution, guess what?  GDP goes up.  That doesn’t mean we are better off.”  In 1968, Robert Kennedy suggested that GDP “counts napalm and nuclear warheads” and, yet, here we are forty years later, just starting to ask the blasphemous question of “what is real?”  Economist Joseph Stiglitz suggests, “What we measure affects what we do.  If we have the wrong measures, we will strive for the wrong things.”  There was a time when having a chicken in every pot and two cars in every garage was our real measurement of success in this country, but maybe it’s become our measure of excess in the past few decades.

First, Bhutan…now, France.  Are we on the verge of a great revolution in which political leaders redefine what’s real and what’s measurable?  Forty national governments are studying or adapting Bhutan’s Gross National Happiness Index to imagine how they could create the conditions for their people to have greater well-being.  As Sarkozy says, “If leisure has no accounting value because it’s essentially full of non-market activities like sport or culture, we put productivity above human fulfillment.”  Take it from a Frenchman, they know their leisure!

Well, I know something about Joie de Vivre, myself, as it’s the impractical name I chose for my company twenty-three years ago.  Our mission statement (“creating opportunities to celebrate the joy of life”) sounds straight out of the French socialist playbook, yet this mantra has allowed us to grow into the country’s second largest boutique hotel company.  Miraculously, making employees and customers happy creates beaucoup bucks for our hotel investors (although less so in times like these).  And, we measure all kinds of things that our traditional hotelier counterparts don’t typically fathom: our employees’ sense of meaning and connection in the workplace; the number of employees who take sabbaticals (all our salaried employees get a one-month paid sabbatical every three years); our customers’ sense of feeling they are in their perfect habitat in our hotels; and the amount of money we raise for grassroots community organizations.

If you were president, what key metrics would you try to evaluate to determine whether you were leading a successful country?  Here are some of my suggestions, but I look forward to reading yours:

• % of High School Grads who go to College
• % of the Population that volunteer their time or donate financially to non-profits
• Commute time (obviously, with higher rankings for shorter commutes)
• Legal immigration demand (this has historically been an important measure of America’s greatness)
• Capacity for innovation (either through measuring patents or the like)
• # of Hours Worked/GDP (our productivity is at the expense of our leisure)

Add comment September 30th, 2009

JOBLESS RECOVERY = SEXLESS MARRIAGE

[Originally posted Sept. 16, 2009 on The Huffington Post]

The Fed announced the obvious last week.  They told us we’re on a slow path of recovery and that the recession may be declared over this quarter based upon the fact that current economic indicators are a little less pathetic than they were last summer.  But, they also told us the unemployment rate ain’t coming down any time soon.  In fact, expect the U.S. to crest above the 10% rate some time in the next few months as we’re currently at 9.7% nationally.  And, in my backyard (California), be prepared for a lucky 13% unemployment rate by year-end.  When you factor in people who are no longer full-time or are now earning substantially less in a new job, nearly one in five Californians are “underemployed” or unemployed.

I don’t know about you, but a jobless recovery seems pretty joyless to me.  Earlier this decade, economists were telling Americans that we were experiencing a boom, yet a large percentage of us were still raiding the cookie jar (our home equity) to pay the bills.  I’m wondering whether there’s a growing disconnect between how we define macro-prosperity with how it shows up in our micro-lives and what kind of psychological damage that does to us along the way.

A couple of weeks ago I tipped a few beers back with an unemployed, old friend who lamented the fact he was in a “sexless marriage.”  Given my natural proclivity toward being a shrink, I inquired a little more without getting into the juicy - or not so juicy - details.  As it turns out, this poor fellow wasn’t as sexless as he proclaimed.  In reality, he and his wife had a once a month date night in which they renewed their wedding vows but, from his perspective, their sex life had become as predictable as the depressing monthly unemployment figures.  But, the light bulb turned on for me when I asked him why he calls their marriage sexless when, in fact, it isn’t.  He told me that two of his best male friends had recently gotten divorced from their wives and were living life in the sexual fast lane with all kinds of hedonistic stories to share.  My buddy wailed, “I used to be so focused on keeping up with the Jones with my conspicuous consumption.  I lost that game.  Now, I’m jobless and sexless.  I feel like a failure.  The only thing I can do well is to drink beer.”

We don’t like to admit it, but our definition of success has an awful lot to do with positional consumption - how we compare ourselves with others.  Our national shrink-in-chief Dr. Obama might want to consider the cognitive dissonance he and the Fed are unleashing on the country when they tell us we’re doing better, yet we see the ranks of the unemployed swelling further.  While we hear this is a pretty severe recession, many industries (like the one I’m in - hospitality) are clearly having depression-like symptoms.  Whether it’s a recession or a depression, it’s leading to the Great Repression.  One of the dictionary definitions of “repression” is “the classical defense mechanism that protects you from impulses or ideas that would cause anxiety by preventing them from becoming conscious.”  My buddy is doing his best to stay unconscious about his jobless recovery and his sexless marriage and he’s doing it by drinking more.  In fact, this summer the Gallup organization reported that alcohol - especially beer - is one of the few consumer products that has held its own in this downturn.  As a guy who owns hotels, restaurants, spas, and bars, I can tell you that our bars are the only one of those four types of hospitality businesses that have seen little disruption in their year-over-year revenues.

So, the next time Ben Bernanke tells us that we’re on the road to recovery just know that he’s sending a few more people into recovery in the near future once they realize the beer isn’t solving their confusion of why their personal financial situation isn’t mirroring what they’re hearing on TV.

Add comment September 16th, 2009

CORPORATE FASTING?

[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.

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.

Add comment August 25th, 2009

AMAZON’S ACQUISITION OF ZAPPOS: A SUPERB EXAMPLE OF KARMIC CAPITALISM

[originally posted July 27, 2009 on the Huffington Post]
 

A is swallowing Z in a classic case of KC.  Confused?  In case you’re just coming back from vacation, Amazon is acquiring the online shoe and apparel retailer Zappos for something between $850 and $925 million, a very handsome sum considering the depth of the recession we’re in and how it’s affecting all retailers.

What makes this so interesting?  If you don’t know much about Amazon or Zappos, take a look at this link which includes a truly unusual letter from Zappos CEO Tony Hsieh to his employees and an eight minute video from Amazon founder Jeff Bezos:  http://blogs.zappos.com/ceoletter   This isn’t just a case of some investment bankers convincing Jeff that this was a strategic purchase during a downturn.  Jeff truly admires Zappos’ service culture and he’s in love with Tony Hsieh, a CEO who’s just as obsessed with the abstract concept of “happiness” as I am.  When Tony was at the South by Southwest conference in Austin earlier this year, Jeff was in the front row taking notes.  The fact that this is, by far, Amazon’s largest acquisition in its fourteen year history makes this all the more newsworthy.

So, what’s Amazon getting for nearly $1 billion.  Like Amazon, Zappos is one of those dot-coms that survived the earlier part of this decade and grew to almost a billion dollars in annual sales.  They’ve thrived in a segment of the online retail biz that Amazon hasn’t been able to crack: apparel.  And, due partly to Zappos’ liberal shipping policies and partly to the company’s well-documented customer-centric approach to business, Zappos has evangelical customers and lots of marketplace momentum.

But, there’s something even more abstract at work here that comes through in Jeff Bezos’ video.  Amazon is buying Zappos’ unique, positive-spirited culture and letting them remain as a truly independent entity.  Tony Hsieh has built a company based upon the principles of “karmic capitalism.”  He realizes the power of capitalism as a business model, but he thinks most companies are too focused on the short-term and that they need to take a “what goes around comes around” perspective on how the company treats its most important constituencies: its employees and customers.  Jeff Bezos started Amazon with that same spirit and he can smell the intangible value in what Zappos has created in the marketplace.

I had the good fortune of spending a couple of hours with Tony at the TED Conference earlier this year.  Many colleagues who’d visited Tony at Zappos’ headquarters in suburban Las Vegas had told me that my book, PEAK, was prominently displayed in their lobby and that Tony regularly quoted some of my Maslovian principles.  Our initial meeting and follow-up conversations have given me great confidence that there’s a new generation of younger CEO’s who are dedicated to focusing on doing business in a new way, focused on the higher needs of their key stakeholders.  Congrats to Tony and the Zappos team.  They’ve proven that “karmic capitalism” isn’t just a catchy cliché, but it’s also a very effective means to run a business and cash out at an extremely impressive return on investment.  Warren Buffett must be smiling!