Muscle for Life with Mike Matthews - Chip Conley on Creating Peak Experiences in Business and Life

Episode Date: August 14, 2015

In this episode I interview author, speaker, and entrepreneur Chip Conley about how the pursuit of peak experiences has helped him build businesses, find his calling, and get the most out of life. CHIP'S WEBSITE: https://chipconley.com/ ORDER CHIP'S BOOK: http://amzn.to/1MmUYpH Want to get my best advice on how to gain muscle and strength and lose fat faster? Sign up for my free newsletter! Click here: https://www.muscleforlife.com/signup/

Hey, it's Mike, and this podcast is brought to you by my books. Seriously, though, it actually is. I make my living as a writer, so as long as I keep selling books, I can keep writing articles over at Muscle for Life and Legion and recording podcasts and videos like this and all that fun stuff. Now, I have several books, but the place to start is Bigger Leaner Stronger if you're a guy and Thinner Leaner Stronger if you're a girl. Now, these books, they basically teach you everything you need to know about dieting, training, and supplementation to build

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Now, as you probably know, I'm not a fan of the supplement industry. I mean, I've wasted who knows how many thousands of dollars over the years on worthless supplements that really do nothing. And I've always had trouble finding products that I actually thought were worth buying and recommending. And well, basically I had been complaining about this for years and I decided to finally do something about it and start making my own products. And not just any products, but really the exact products that I myself have always wanted. So a few of the things that make my supplements unique are one, they're a hundred percent naturally sweetened and flavored. Two, all ingredients are backed by peer reviewed scientific research that you can verify for yourself because

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about my supplements at www.legionathletics.com. And if you like what you see and you want to buy something, use the coupon code podcast, P O D C A S T, and you'll save 10% on your order. All right. Thanks again for taking the time to listen to my podcast and let's get to the show. Hello, hello. Welcome to another episode of the podcast. In this episode, I interview someone whose work I really like. His name is Chip Conley. He's written several books, but I read one of his books called Peak, and that's the book that turned me on to him.

And the book talks about some research that was done by a guy named Abraham Maslow. I think it was done primarily in the 50s and 60s. Maslow is Uh, I think it was done primarily in the fifties and sixties, uh, Maslow's a psychologist looking in and what he's best known for is something called the hierarchy of needs, which is kind of his outline of the, of the, of the core needs, uh, that, that people have ranging from basic survival stuff to all, you know, at the bottom of this pyramid to transformational self-actualization type stuff at the top. And, um, that I've always kind of found that, that research interesting. So, uh, that that's what turned me onto Chip's book because Chip's book is about how he has applied that, uh, construct, uh, or in that research to his business and, uh, his business, which, which actually he's sold now, but, but he, he had a hospitality group, a hotel company, which he started when he was 26 and he built it up over

the course of, I think, 24 years. And now, now he's involved in their Airbnb and he does a lot of speaking, you know, he's featured on Ted and he writes books and he consults, he does all kinds of things. A Very interesting guy. And I wanted to get Chip on the podcast because I know that a lot of you are either entrepreneurs or are people that are striving not just to get a fit body, but you want to get ahead in other areas of your life. And I thought that Chip's – just his viewpoints and his philosophies for living and for working and for the workplace as well, building organization, building team. I thought that you could benefit from him because I really liked what he has had to say.

So let's get to the interview. All right. So, hey, Chip, thanks a lot for coming on the podcast. I'm a fan. Great to be with you. Thanks. Yeah. So I found you through your book, Peak, which I had read a few months ago and really, really liked and recommended to the guys that work with me.

And I've recommended it to, you know, on the podcast, actually on my website and stuff. And I liked a lot of what you had to say in that book and just your overall philosophy and kind of, you know, you get a sense of who you are. And I thought it's pretty cool. So that's that's why I thought it'd be fun to have you on the podcast. Thank you. You are a peeker. You are a peeker. I try. I try. All right. So let's just kind of start with the title, which kind of brings you to that point of

peeker. Why that word? What are you referring to exactly? So yeah, the story behind it is that there's a guy named Abraham Maslow who wrote a series of books as a psychologist in the 40s and 50s here in the US. And his books were some of the first books, the idea of people having a peak experience in their life, and how positive psychology could actually enrich people psychologically. Most psychologists prior to that point were more focused on the bad things in people as opposed to the good things in people.

So peak refers to the idea that you can create peak experiences in your life. And the book is really about how to do that organizationally, not just for yourself, but actually how to use Maslow's hierarchy of needs, the famous pyramid, and do that for an organization. Cool. And so what is a peak experience? Peak experience as an individual tends to be something that's memorable, is timeless, and it's when you're in a flow where you actually feel like something's coming through you that you're channeling, that you're just an amazing channel for some passion or skill that you're providing.

For an organization, it's when a group of people are in that flow zone. I like to think of it from an athletic perspective as crew. When you have a crew, it's in unison rowing all together. This phenomena happens that doesn't make sense in physics but actually as everybody's rowing the boat actually starts to lift out of the water and they call that swing and when the crew is in that swing state swinging state um it really means that they are so together that they actually are able to basically lift up above the friction that happens in rowing. It's water. In life, it's the problems we have in organization.

And you lift out of that. And that's what a peak crew or organization can do. That's awesome. I like that metaphor a lot. So let's talk a bit about Maslow's hierarchy. Can you just break down, you know, what's the kind of basic theory of this construct? You have the different levels of it. Yeah. So he's known for the five level pyramid. He did actually have a seven and eight level

pyramid later in his life, but we'll just focus on the five levels. The basic premise is this, in life as a human, you have some basics that you need, food, water, sleep, air, your physiological needs. If you actually are being deprived of any of those four for any period of time, any extended period of time, nothing else really matters. But once you get those basic needs met, you sort of, not fully, but maybe 50 to 70% met, you go to the next level, the next level is safety. And then once that's met, you go to the next level, which is esteem. And then the third level is social belonging needs. Fourth level is esteem.

And the fifth level is self-actualization. Self-actualization was really defined by the U.S. Army as be all you can be. Now, Maslow defined that before the U.S. Army. He created an ad campaign around that. But that's the most succinct way for me to describe it, self-actualization. So that's really what Maslow's Hierarchy of Needs was about. The problem is that, I mean, it was great, and it was very much individual-focused. But Maslow died at age 62 just as he was starting to look at how do you take Maslow's Hierarchy of Needs for an individual

and apply it to a collective, like an organization for nonprofit, whatever, and that, or a team. And that's really what I did is I took his work and I took it to the organizational side. Awesome. Yeah. So let's get into that. So in your book, you kind of give three levels of, of need here. And this is, this is with employees, your own team, right? So you have money recognition and meaning. Can you explain a bit more about these and kind of how do you go about fulfilling these for your employees or helping them fulfill their needs sure so you have a five level pyramid i one of the things one of the sort of paradigms i

tried to create here was the idea that there's really three basic themes in life there's survival there's succeed and then there's transform and so uh with the survival being physiological and safety needs succeed being social belonging and esteem and think about it when you feel successful in life it usually relates to you feel connected recognized or the law like you belong you feel recognized and you feel that esteem from it and then at the top of the pyramid transformation uh is is the state of for self-actualization. So survival, succeed, transform. Applying that to work,

it's like a job, a career, or a calling. And a job is when you're exclusively focused on the tasks and the money. And so money's at the base of the employee pyramid. When I say money, I mean the full comp package, not just your salary. Now, most leaders think that that's the only thing or the primary thing that employees care about. And the truth is it's the fourth most likely reason a person leaves their job.

Money is not the primary reason a person leaves their job. The primary reason a person leaves their job in the United States is because of their boss. And so the second level of the employee pyramid is recognition. So money and then recognition. And so what it means basically is as a boss or a leader, it means you actually need to understand what it is that would actually recognize, be a recognition for this person or for these group of people. And everybody has different needs for recognition.

For some it's public. For others it's private. Some have particular goals that they actually want to hit, and they want you as their boss to be totally there for them, coaching them. And when they hit it, they want you to say, yes, you hit it. Others actually, frankly, want the recognition to happen sporadically. They're not expecting it. So part of it is actually being smart enough psychologically about what's going to be a recognition that people appreciate. And then

the top level of that pyramid for the employee is meaning. So money, recognition, meaning. And there's really two sides to meaning. There's meaning in work and meaning at work. Meaning in work means the work that you're doing on a daily basis. You love what you're doing. You would do it anywhere. It doesn't matter the company you're working for. It actually just matters that you're doing this kind of work. Meaning at work is I really appreciate the noble purpose of this organization and the mission of the organization. And by just being in that organization, I feel like I'm doing great work. I may be actually collecting paperclips, which I don't like.

So the meaning in work for that person would be really low. The meaning at work would be what is lighting them up. Ideally, you get both. Great companies get meaning in work and meaning at work right. And if you do that well, you'll have people living their calling. And in your experience, just in building your businesses and doing everything you've done,

how do you help people find meaning in work? Because that's such a thing out there, you know, that the stereotypical attitude that work sucks and you just grind it out and you do it. You know, life is about everything you do outside of work. It's a really good question.

The truth is most companies are full of people with just jobs and not with colleagues. So just to give some context, I started my own company when I was 26, grew at a company called Joie de Vivre Hotels. Grew it for 24 years as the CEO, became the second largest boutique hotelier in the US, based in San Francisco. Sold it and then now have been helping to lead Airbnb for the last two and a half years as the head of global hospitality and strategy. I didn't even know that. That's awesome.

Yeah, basically helping and mentoring the three founders and helping the company become the world's best hospitality company. What I can say in both of these contexts is that understanding first for your own side of what actually gives you that sense of meaning in work, it's usually when you're having a peak experience. Meaning you lose track of time.

You absolutely get so engrossed in what you're doing that what you're doing and who you are are completely the same thing. What you're doing and who you're being sort of feel like they are fused together. It's something that actually once you finish doing it, you don't usually feel tired. You just feel energized. So a job depletes you and a calling energizes you. In the context of being a leader, some of that trying to figure out, okay, if I want only people who are

living their calling so much of it goes back to who are we hiring you want to hire people who are well suited at a hotel on the front desk of a hotel we call our front desk clerks hosts at a hotel you want someone who's not um an introvert you can have an introvert but it just an introvert francisco hotel is going to get worn out pretty quickly because they will get depleted by the amount of people interaction going on. It doesn't mean you can't – I probably wouldn't do very good. There's a point where I just wouldn't want to talk anymore. That's right.

Exactly. what's right for them. And you having a good sense of that is a really critical part of being a great leader and a great creative team that actually can have a sense of the qualities of what will make a person successful in a particular job. And so that's just tailing your hiring process and over the years, learning what kind of personality traits and it reminds me of, you might even know me. I read Danny Meyer's book setting the table recently and you know, very well. Yeah. Danny Meyer's book, Setting the Table, recently. Very well, yeah.

Yeah, so his whole thing of looking for people that want to create pleasurable experiences, that really get personal pleasure from just giving someone else a joyful or pleasurable type of experience. He found those were the best people to work in his restaurants. Yep, exactly. Yeah, it makes sense. Okay, awesome. So that's kind of the employee thing. Let's now talk about the needs of customers.

sense. Okay, awesome. So that's kind of the employee thing. Let's now talk about the needs of customers. So in your book, then you talk about kind of the risk of being comfortable with just satisfying customers, which would be that bottom, you know, just giving people what they expect to pay for. It's a thing. It does whatever it's supposed to do rather than delighting the hell out of them. So kind of how does that work and what are some examples about how you've gone about doing that? Yep. So you take this three the three level pyramid what i call the transformation pyramid of survival succeed transform now you go we're applying it to the employee now let's apply it to the customer the customer would be the survival need is meet my expectations now think about that for a moment think about you being a customer no matter what kind of customer you are, the baseline of what actually creates satisfaction

is having your expectations met. There's a great equation I love, disappointment equals expectations minus reality. It's very appropriate to sort of say, okay, so what's the expectation of our core customer and are we delivering on it? But that only creates satisfaction and satisfaction in the world we live in today does not necessarily create loyalty or commitment. So the next level, the success level for a customer, is when they actually have their desires met. So a desire as a hotelier, I would just say an expectation for a customer usually is a physical thing. My room is clean. It's not too noisy.

The bed is comfortable so i can sleep in it etc doesn't smell like cigarettes yeah i mean again the more you pay the higher your expectations go um next the next level like desires could still have physical components so they gave me a room that was bigger than i expected i got a suite well getting a suite might make you feel like your esteem needs are met so what tends to happen on the desires level, a lot of times it's, it's sort of moves from the physical assets of what you got to a little bit of the social belonging and the steam parts. So like, oh wow, the general manager of the hotel wrote it, wrote a note to me and said, we've upgraded you to a suite with a view. Ah, okay. I guess I'm a special

person. The front desk staff remembered my name because I was here three weeks ago and before I even got to the front desk, they said, hey, Mr. Connolly, great to see you. So the desire level is not exclusively related to social belonging and receive needs, but it is the start of how you're differentiating yourself as a product.

So your product at the baseline, the survival level is you're pretty much commoditized.. So your product at the baseline, the survival level, is you're pretty much commoditized. Now you move up to this level. Desires are the way you're starting to differentiate yourself. The way a company goes way beyond differentiation, though, is to get to that third level, the transformation. So going to the third level of the customer pyramid

is the unrecognized needs level, and it's the transformation. And if you do this well, you create customers who are evangelists. And like Apple did it well. Apple took the idea of the Sony Walkman and said, why don't we create an iPod? And Sony should have done that. But the truth is once you become sort of,

you have a certain approach to doing a business, you don't necessarily want to disrupt yourselves. So it wasn't hilton or hyatt or marriott that created the airbnb it was these three guys in their mid-20s who did it so um the key here is to understand what are the things that a customer wants that they actually never thought anybody could deliver for them and once you deliver that and then consistently do that and actually get better, you actually get to a place where you're creating evangelists because nobody else is providing that. So as you move up the pyramid, you create more and more differentiation and much, much more commitment and loyalty from the customer.

And what are some examples of how you've done that? Yeah, let me give you an example. So each time we created a hotel at joie de vivre we created 52 boutique hotels we imagined a magazine and five adjectives to define the hotel now the reason we did this was because it helped us to understand the psychology of the customer so let me use an example we have a hotel in san francisco called the vitale hotel vitale um it's a really great luxury hotel on the waterfront on the bay. In creating that hotel, we came up actually with two magazines that define the hotel,

Real Simple Magazine and Dwell Magazine. And the five adjectives that define those two magazines together were modern, urbane, fresh, natural, and nurturing. In creating this hotel 15 years ago, I decided if we're going to have a modern, urbane, fresh, natural, nurturing hotel that's going to deliver that experience for its guests, we are going to probably attract guests who would use those five adjectives to describe themselves. That's why I say boutique hotels are really like a mirror or an identity refreshment for a guest. You stay in the hotel and it feels like the hotel's personality rubs off on you well in the case of this hotel the hotel batali it meant

that on the top floor of the hotel when we launched and for the first 10 years it was open we actually had a yoga studio on the top floor and 400 square feet uh of the top floor now nobody it never made sense in a financial district to have a yoga studio in the penthouse. It didn't make sense at all. But I knew that this is something that was a growing desire of people is to figure out how when they're traveling as business travelers, they can still feel connected to their body and connected to actually tranquility and relaxation. And so we decided to do this. My investors thought I was crazy. I was taking the best real estate in the building and turning it into a yoga studio. But it turned out to be the

best marketing thing we'd ever done because the Wall Street Journal and LA Times and New York Times all wrote stories about it because there's this cool hotel, business hotel, luxury hotel that actually has a free yoga class every morning. So it was really a great way to position the hotel. Yeah, that's a great example. I mean, I can relate to that. Even in, I have a business that sells workout supplements. And one of the things that set us apart is we spend a lot more money on our products

than a lot of our competitors because in the retail world, you know, if a supplement costs $5, that's going to be $40 to $50 in GNC. The problem is you can't make good supplements for $5. You just can't. So you make crap and then you just use marketing spin to sell it. So it's a similar thing in the beginning where I was like, well, why don't we just spend three times, four times as much on these products and sell them direct to consumer and forget the retail. Retail doesn't work. And so it was just in a similar way where it was, but that's become now, and that's something now we're known for that

people know. And you can go look at the form of people that are informed, look at the formulations and they go, you know, they love it for that. But from a business standpoint, in the beginning, I had people telling me that'll never work. You know, yeah. Okay. The margins will be fine, direct consumer. But if you don't have retail, you're just never going to take off, blah, blah, The margins will be fine, direct consumer. But if you don't have retail, you're just never going to take off, blah, blah, blah. Congratulations. So in your book, you also say, you know, you talk about, well, first let me back up. So, you know, just out, I guess, out and about talking to people, a lot of people kind of associate capitalism kind of with greed.

And in your book, you talk about the power that business has to create long-term good in the world. And that's something I really liked about just you and your message. Can you tell us a little bit about that? Yeah. I mean, let's use Airbnb for a moment as an example. So Airbnb is on the path to being the most valuable hospitality company in the world. Surpassed Marriott, about to surpass Hilton. And that's for a company that's barely seven years old and really has only been growing to the kind of size we are now for the last four years.

So why is that? Well, there's a basic mission and mantra of the company that we sort of summarized about a year ago, uh, in an ad campaign that we're now running, which is called belong anywhere. The whole premise of Airbnb in terms of what we want to do is not to just be the biggest hospitality company in the world. in terms of what we want to do is not to just be the biggest hospitality company in the world we want to actually turn strangers into friends all over the world by allowing people to open their home so that we can stay with stay with them in an extra bedroom or maybe even take their whole place if they're if they're traveling themselves now you know there's controversy attached to this uh on many levels that's not the purpose of why i'm bringing it up it's maybe to say instead that the

fact that we actually had a mission that was saying we want people to feel like they can belong anywhere in the world we're in 34 000 cities 191 countries no hotel company could ever say that they're just not so we are able to basic based upon an initial premise that we want people to feel like they can go stay anywhere in the world and live like a local get to know the locals be able to have more space for less money um but most importantly have a sense of belonging anywhere that that basic theme helped us to grow to what we are joie de vivre the theme was the name of the company joie de vivre means joy of life it's the french phrase just going out and experiencing the joy of life. Rather than calling ourselves the ABC hotel company or naming it after me, Hilton, Marriott, I think at the core of most companies is a noble purpose.

feel like we're coming out of the industrial age type of mentality of where people were just cogs in a machine. And, you know, we're getting, you had guys like Carnegie literally working his workers to death so he could make another, you know, whatever he was in today's dollars, he was worth $400 billion. Like, what more do you want? Why are your people dying in your factories when you're worth $400 billion? It doesn't even make sense. And from that came, you know, management, whatever. So I think I, I like that a lot. All right. Last question. Cause I know you, you know, your time, you got to go. So what are three books made? It could be on work or business or success that you think everyone listening right now should read besides your book, of course, which is obvious.

Well, I, you know, Tony Shea is a great friend of mine and he's written the forward for my last two books. My last book was called emotional equations. So Tony wrote a was called emotional equations. So Tony wrote a book called delivering happiness. You know, Tony's Tony was basically grew Zappos into the company it is, but he's also had other financial successes as an entrepreneur.

So I think that's a great book just in terms of understanding how do you actually use happiness and creating happiness as a competitive advantage. Yeah. Big fan of that book. You know, there's a book called man search for meaning. This is as a competitive advantage. Yeah. Big fan of that book. You know, there's a book called Man's Search for Meaning. This is not a business book, but it's a business book that I think is very relevant. It's a book about meaning that's relevant to leadership. It's about Viktor Frankl, who was in a concentration camp in World War II. And in being in the concentration camp, he had this epiphany.

And it's really having a sense of meaning. And that is really in many ways how I got to that pyramid of money recognition meaning. So that'd be a second book. I think that, you know, it's a, it's a tough read. The first half is basically his story of what it was like to be in a concentration camp and it's a psychological book as well. So if you don't like abstract psychology, not great, but if you do it, an incredibly compelling read.

Yeah. I've read them both a lot. Tribal Leadership, a third book, I'd say, really speaks to the idea of teams. But actually, even another one I'll say is The Five Dysfunctions of Teams by Pat Lencioni. We've used that very much here at Airbnb in terms of trying to understand how do you build teams that are doing that thing that I called earlier, swing, out there on the water. Awesome. That's great. I haven't read the last two, but they're actually on my list, my never-ending list. Okay, well, great. This was awesome, Chip. As I said, I'm a big fan of yours, and I really appreciate you taking the time to do this.

was awesome, Chip. As I said, I'm a big fan of yours and I really appreciate you taking the time to do this. I know that everyone's going to like it because whenever I talk about stuff like this, I get asked for more. That was why this came up. I appreciate you being a peeker, Mike. I appreciate it very much. Yeah, thanks a lot.

See you later. Okay, bye. Hey, it's Mike again. Hope you liked the podcast. If you did, go ahead and subscribe. I put out new episodes every week or two where I talk about all kinds of things related to health and fitness and general wellness. Also head over to my website at www.muscleforlife.com where you'll find not only past episodes of the podcast,

but you'll also find a bunch of different articles that I've written. I release a new one almost every day, actually. I release kind of four to six new articles a week. And you can also find my books and everything else that I'm involved in over at muscleforlife.com. All right. Thanks again. Bye.