Why don’t we “practice” business? I’ve come to realize that — unlike medicine and law — we don’t think of our profession as business leaders as a “practice.” A few years ago, in the last downturn, I developed the principles of PEAK as an alternative operating model for my business based upon Abraham Maslow’s iconic Hierarchy of Needs pyramid. Reinterpreting this well-known theory of human motivation helped me to see that all stakeholders associated with a company have their own Hierarchy of Needs. My company Joie de Vivre tripled in size during this difficult period and I came to find out that a variety of other transformational companies like Harley-Davidson have used Maslow’s theory as a foundation for their business model.
Business principles are only as good as the practices that back them up. Recently, with the assistance of some good friends, I’ve developed a set of PEAK Leadership practices that can assist any leader or leadership team to move from survival to success and on to being a transformative role model in their industry. When a company embeds these principles and practices in how they grow their leaders, the end result is PEAK performance: a phenomenon of sustained growth — both for the organization as well as for those within the organization.
Practice 1: Embody an inherently positive view of human nature.
The principles of PEAK have their roots in humanistic psychology and a basic belief that man is meant to “be all that he can be.” So, it’s not surprising that the fundamental first practice is assuring that a PEAK leader believes that humans — at their very core — gravitate to goodness when the right conditions exist for them to flourish.
Creating what Maslow called “psycho-hygiene” in a company means focusing on people’s best qualities and believing in what’s been known for a half-century in business as a “Theory Y” perspective on management versus “Theory X.” With Theory X, management assumes employees are inherently lazy and will avoid work if they can. As a result of this, management believes that workers need to be closely supervised and a comprehensive system of controls developed. With Theory Y, management assumes employees may be ambitious and self-motivated. They believe the satisfaction of doing a good job is a strong motivation and seek to create the conditions for the employee to develop their own strengths to be successful. While this latter theory may feel intuitively right to many of us, is your organization still structured in a Theory X style of business?
Practice 2: Create the conditions for people to live their callings.
Great leaders understand there are only three relationships you can have with your work: a job, a career, or a calling. A job tends to deplete you and a calling energizes you. Most employees live in the bartering world of work. The company gives them a compensation package and recognition and, in return, the employee gives their time and energy. Yet, those that are living their calling have moved from external to internal motivation. And, these employees are not exclusively focused on the specific collection of tasks they perform and are more focused on the impact or purpose of what they do. The best hospitals have more nurses living their calling. The best airlines have the happiest flight attendants (Southwest). What are you doing to help your people find their sense of calling in what they do?
Practice 3: Promote and measure the value of intangibles.
In business, we are taught that leadership is all about managing what you can measure, but what’s most easily measurable is the tangible in life. Yet, is it the tangible or the intangible in business and life that creates value? In business, the metrics that track the tangible are well known: your profitability, assets & liabilities, cost structure, market share. Yet, in reality, these tangible metrics are the result of a series of intangibles that drive excellence: brand loyalty and reputation, employee engagement, customer evangelism, the ability to innovate. Great leaders nurture, value, and evolve corporate culture — one of the most valuable intangibles — as a key differentiator for their company. These intangibles are the inputs that drive the tangible output that most companies use to evaluate their performance. In the 21st century, great leaders are learning how to measure and benchmark these intangibles so that they’re not out of sight, out of mind. Which intangibles are most valuable to your business and how are you measuring them?
Practice 4: Ability to move fluidly between being a “transactional” and a “transformational leader.”
Author James McGregor Burns once wrote that, “Transformational leaders look for the personal motives in followers, seek to satisfy higher needs, and engage the full person of the follower.” Yet, most management decisions require only transactional thinking because the goal is purely to optimize existing resources. A great leader is able to move fluidly between addressing the foundational needs that people have, but also helping them see beyond the short-term so that they can be motivated by a compelling vision that helps them transcend their momentary challenges. How much of your time is stuck in the trenches as a transactional leader versus focusing on how to create transformation?
Practice 5: Calibrate the balance between “Conscious” and “Capitalism.”
Business has quite often been seen as a “zero-sum” game. One person’s win is another person’s loss. Taken to the global level, some believe that capitalism’s short-term gains are often to the long-term detriment of the environment and to certain communities. And, at this crossroads, in an increasingly transparent world, this is why great leaders have to think more broadly about the impact of their decisions, not just on the bottom line, but on their broader stakeholders. In many ways, Walmart took this step when they saw their stock price flat line even with sizable revenue and net income growth. Yet, for those socially conscious business leaders, cash flow is the blood that keeps your organization alive. Make sure the basic survival needs of your company are met. How do you balance the priorities of the broader community versus the financial needs of your company?
Practice 6: Focus on your customers’ highest needs.
Henry Ford once suggested, “If I asked my customers what they wanted, they would have said a faster horse.” PEAK leaders and companies understand what the customer wants even before the customer has articulated it and they realize that customer innovation requires a certain amount of mind reading and cultural anthropology. By doing this well (with Apple being the best example in the world), you create a movement and evangelists and reduce your need to spend money on traditional marketing. Are your customer satisfaction surveys just asking the obvious questions that will track their expectations and desires, but not their unrecognized needs? How can you “mind read” your customers?
Practice 7: Lead to PEAK.
Just as a Sherpa does in the Himalayas, great leaders meet their people where they are on the pyramid and help them to see the natural path to the peak. They recognize the value of loyalty and mentoring as a means of sustainable success in business. PEAK leaders champion personal development in tandem with corporate development knowing that there’s a synergistic effect of having a self-actualized individual in the workplace as evidenced at companies like Google. And, most importantly, they embody authentic leadership by being, not just by doing. How are you incubating a collection of great leaders?
Conscious people pay attention. It’s true of spiritual leaders. It’s true of business leaders. PEAK leaders pay attention to the higher needs while not neglecting the base needs that provide a foundation for their organization. Leadership is all about making conscious choices and knowing that the higher you are in a company, the more magnified your decisions and behavior will be throughout the organization.