Measuring what makes life worthwhile Chip Conley
[Music]
I’m going to talk about the simple truth
in leadership in the 21st century in the
21st century we need to actually look at
and what I’m going to actually encourage
you to consider today is to go back to
our school days when we learned how to
count but I actually think it’s time for
us to think about what we count
youko because what we actually count
truly counts let me start by telling you
a little story this is van quash she
came to this country in 1986 from
Vietnam she changed her name to Vivian
because she wanted to fit in here in
America her first job was in an
inner-city motel in San Francisco as a
maid I actually happened to buy that
motel about three months after Vivian
started working there so Vivian and I
have actually been working together for
23 years with the youthful idealism of a
26 year old in 1987 I started my company
and I called it a Giada vivre a very
impractical name and because I actually
was looking to create joy of life and
this first hotel that I bought motel was
a pay-by-the-hour no-tell motel in the
inner city of San Francisco as I spent
time with Vivian I saw that she had sort
of a Jawad aviv in how she did her work
made me question and curious how could
someone actually find joy in actually
cleaning toilets for a living so I had
spent time with Vivian and I saw that
she didn’t find joy in cleaning toilets
her job her goal and her calling was not
to become the world’s greatest toilet
scrubber what counts for Vivian was the
emotional connection
she created with her fellow employees
and our guests and what gave her
inspiration and meaning was the fact
that actually she was taking care of
people who were far away from home
because Vivian knew what it was like to
be far away from home that very human
lesson more than 20 years ago served me
well during the last economic downturn
we had in the wake of the dot-com crash
and 9/11 San Francisco Bay area hotels
went through the largest percentage
revenue drop in the history of American
hotels we were the largest operator of
hotels in the Bay Area so we were
particularly vulnerable but also back
then
we stopped eating french fries in this
country well not exactly
of course not we actually started eating
freedom fries and we actually started
boycotting anything that was French
well my name my company Sharada vivre so
I started getting these letters from
places like Alabama and Orange County
saying saying to me that they’re going
to boycott my company because they
thought we were a French company and I’d
write them back and I’d say wait a
minute we’re not French we’re an
American company were based in San
Francisco and I’d get a terse response
oh that’s worse so one particular day
out when I was feeling a little
depressed and not a lot of joie de vivre
I ended up in the local bookstore around
the corner from our offices and I
initially ended up in the business
section the books are looking for a
business solution but given my befuddled
state of mind I ended up in the
self-help section very quickly and
that’s where I got reacquainted with
Abraham Maslow’s hierarchy of needs
I took one psychology class in college
and I learned about this guy Abraham
Maslow as many of us are familiar with
his hierarchy of needs but as I sat
there for four hours the full afternoon
reading Maslow I actually recognized
something that is true of most leaders
and when the simplest facts in business
is something that we often neglect and
that is that we’re all human and each of
us no matter what our role is in
business actually has some hierarchy of
needs in the workplace so as I started
reading more Maslow what I actually
started to realize is that actually
Maslow later in his life wanted to take
this hierarchy for the individual and
apply it to the collective to
organizations and specifically to
business but unfortunately he died
prematurely in 1970 and so he wasn’t
really able to live that dream
completely so I realized in that dot-com
crash that my role in life was to
channel Abe Maslow and that’s what I did
a few years ago when I actually took
that five level hierarchy of needs
pyramid and turned it into what I call
the transformation pyramid which is
survival success and transformation it’s
not just fundamental in business it’s
fundamental in life and we start
actually asking ourselves the questions
about how we were actually addressing
the higher needs these transformational
needs for our key employees in the
company these three levels of the
hierarchy needs actually relate
to the five levels of Maslow’s hierarchy
of needs but as we started asking
ourselves about how we were addressing
the higher needs of our employees and
our customers I realized we had no
metrics we had nothing that actually
could tell us whether we were actually
getting it right so we actually started
asking ourselves what kind of less
obvious metrics could we use to actually
evaluate our employees sense of meaning
or our customers sense of emotional
connection with us
for example we actually started asking
our employees do they understand the
mission of our company and do they feel
like they believe in it can they
actually influence it and do they feel
that their work actually has an impact
on it we start asking our customers did
they feel an emotional connection with
us in one of seven different kinds of
ways miraculously as we ask these
questions and start giving attention
higher up the pyramid what we found is
we created more loyalty our customer
loyalty skyrocket our our employee
turnover dropped to one third of the
industry average and during that five
year dot-com bust we tripled in size now
as I went out and started spending time
with other leaders out there and asking
them how they were getting through that
time what they told me over and over
again was that they just manage what
they can measure and what we can measure
is that tangible stuff at the bottom of
the pyramid they didn’t actually even
see the intangible stuff higher up the
pyramid so I started asking myself the
question how can we get leaders to start
valuing the intangible if we’re taught
as leaders to just manage what we can
measure and all we can measure is the
tangible in life we’re missing a whole
lot of things at the top of the pyramid
so I actually went out and studied a
bunch of things and I found a survey
that showed that 94% of business leaders
worldwide believe that the intangible
ZAR important in their business things
like intellectual property their
corporate culture their brand loyalty
and yet only 5% of those same leaders
actually had a means of measuring the
intangible in their business so as
leaders we understand that intangibles
are important but we don’t have a clue
actually how to measure them so here’s
another Einstein quote not everything
that can be counted counts and not
everything that counts can be counted I
hate to argue with Einstein but if that
which is most valuable in our life
in our business actually can’t be
counted or valued are we going to spend
our lives just mired in measuring the
mundane it was that sort of heady
question about what counts that led me
to take my CEO hat off for a week and
fly off to the Himalayan peaks flied off
to a place that’s been shrouded in the
mystery for centuries place some folks
called shangri-la it’s actually moved
from the survival base of the pyramid to
becoming a transformation role role
model for the world I went to Bhutan the
teenage King of Bhutan was also a
curious man but this was back in 1972
when he ascended to the throne two days
after his father passed away at age 17
he started asking the kind of questions
that you’d expect of someone with a
beginner’s mind on a trip through India
early in his reign as king he actually
was asked by an Indian journalist about
the Bhutanese GDP the size of the
Bhutanese GDP and the king responded in
the fashion that actually has
transformed us four decades later he
said the following he said why are we so
obsessed and focused with gross domestic
product
why don’t we care most about more about
gross national happiness now in essence
the king was asking us to consider an
alternative definition of success was
what has become to be known as GNH or
gross national happiness most world
leaders didn’t take notice and those
that did thought this was just Buddhist
economics
but the king was serious and this was a
notable moment because this is the first
time a world leader in almost two
hundred years had suggested that that
intangible of happiness again that that
leader 200 years ago Thomas Jefferson
with the Declaration of Independence 200
years later this King was suggesting
that intangible of happiness is
something we should measure and
something that we should actually value
as government officials for the next
three decades next three three thousand
years as king this King actually started
measuring and managing around happiness
in Bhutan and including just recently
taking this country from being an
absolute monarchy to a constitutional
monarchy with no bloodshed no coup in
Bhutan for those who don’t know
is the newest democracy in the world
just 2 day 2 years ago so as I spend
time with leaders in the GNH movement I
got to actually really understand what
they were doing and get to spend some
time with the Prime Minister over dinner
I asked him an impertinent question I
asked him how can you how can you create
and measure something which evaporates
in other words happiness and he’s a very
wise man and he said listen boot ons
goal is not to create happiness we
create the conditions for happiness to
occur in other words we create a habitat
of happiness well that’s interesting and
he said that they have a science behind
that art and they’ve actually created
four essential pillars nine key
indicators and 72 different metrics that
actually helped them to actually measure
their GNH in fact one of those one of
those key indicators is how do the
Bhutanese feel about how they spend
their time each day it’s a good question
how do you feel about how you spend your
time each day time is one of the
scarcest resources in the modern world
and yet of course that little intangible
piece of data doesn’t factor into our
GDP calculations so as I spent my week
up in the Himalayas actually started to
imagine what I call an emotional
equation and it focuses on something I
read long ago from a guy named rabbi
hyman Schacht oh how many know him
anybody 1954 he wrote a book called the
real enjoyment of living and he
suggested that happiness is not about
having what you want instead it’s about
wanting what you have or in other words
I think the Bhutanese believe happiness
equals wanting what you have
imagine gratitude / having what you want
gratification the Bhutanese aren’t on
some aspirational treadmill constantly
focused on what they don’t have their
religion their isolation their deep
respect for their culture and now the
principles of their GNH movement all
have actually fostered a sense of
gratitude gratitude about what they do
have how many of us here is tedsters in
the audience spend more of our time in
the bottom half of this equation in the
denominator where we are a bottom-heavy
culture in more ways than one
the reality is in western western
countries quite often we do focus on the
pursuit of happiness as if happiness is
something that we have to go out an
object we’re supposed to get or maybe
many objects actually in fact if you
look in the dictionary many dictionaries
define happy a defined pursuit as to
chase with hostility do we pursue
happiness with hostility good question
but back to Bhutan Bhutan is actually
bordered on its north and south by 38%
of the world’s population could this
little country like a start-up in a
mature industry be the spark plug that
actually influences a 21st century of
middle class in China and India Bhutan
is actually created the ultimate export
a new global currency of well-being and
there are 40 countries around the world
today that are actually setting their
own GNH you may have heard this last
fall Nicolas Sarkozy in France
announcing the results of an 18-month
study by two Nobel economist focusing on
happiness and wellness in France Sarkozy
suggested that world leaders should stop
myopically focusing on GDP and consider
a new index what some of French are
calling a ja de vivre index I like it co
branding opportunities and just three
days ago three days ago here at Ted we
actually at a simulcast of David Cameron
potentially the next prime minister of
the UK actually quoting one of my
favorite speeches of all time Robert
Kennedy’s poetic speech from 1968 when
he suggested that we’re myopically
focused on the wrong thing and that GDP
is a misplaced metric so it suggests
that the momentum is shifting I’ve taken
that Robert Kennedy quote and actually
turn it into a new balance sheet for
just a moment here this is actually a
collection of things that Robert Kennedy
said in that quote GDP counts everything
from air pollution to the destruction of
our redwoods but it actually doesn’t
count the health of our children or the
integrity of our public officials as you
look at these two columns here doesn’t
it make you feel like it’s time for us
to actually start figuring out a new way
to count a new way to actually imagine
what’s important SM I certainly Robert
Kennedy’s suggesting at the end of his
speech exactly that he said GDP measures
everything in short except that which
makes life worthwhile Wow so how do we
do that well let me say one thing we
could just start doing 10 years from now
at least in this country why in the heck
in America are we doing a census in 2010
we’re spending 10 billion dollars in the
census and we’re asking 10 simple
question it is simplicity but all of
those questions are tangible they’re
about demographics they’re about where
you live how many people you live with
and whether you own your home or not
that’s about it
we’re not asking meaningful metrics
we’re not asking important questions
we’re not asking anything that’s
intangible Abe Maslow said long ago
something you’ve heard before but you
didn’t realize it was him he said if the
only tool you have is a hammer
everything starts to look like a nail
we’ve been fooled by our tool I excuse
that expression we’ve been fooled by our
tool GDP has been our hammer and our
nail has been a 19th and 20th century
industrial era model of success and yet
64% of the world’s GDP today is in that
intangible industry we call service the
service industry the industry I’m in and
only 36 percent is in the tangible
industries of manufacturing and
agriculture so maybe it’s time that we
get a bigger toolbox right maybe it’s
time we actually get a toolbox it
doesn’t just count what’s easily counted
the tangible in life but actually counts
what we most value the things that are
intangible I guess I’m sort of a curious
CEO I was also a curious economics major
as an undergrad and I learned that
economists measure everything in
tangible units of production and
consumption as if each of those tangible
units is exactly the same they aren’t
the same in fact as leaders what we need
to learn is that we can actually
influence the quality of that unit of
production by actually creating the
conditions for our employees to live
their calling and in fact in Vivian’s
case her unit of
production isn’t the tangible our she
works is the intangible difference she
makes during that one hour of work this
is Dave arendale who’s actually been a
longtime guest at Vivian’s motel he
stayed there a hundred times in the last
20 years and he’s loyal to the property
because of the relationship that Vivian
and her fellow employees have created
with him they’ve created a habitat of
happiness for Dave and he tells me that
he can always count on Vivian and his
staff and the staff there to make him
feel at home why is it that business
leaders and investors quite often don’t
see the connection between creating the
intangible of employee happiness with
creating the tangible of financial
profits in their business we don’t have
to choose between inspired employees and
sizable profits we can have both and in
fact inspired employees quite often help
make sizable profits right so what the
world needs now in my opinion is
business leaders and political leaders
who know what to count we count numbers
we count on people what really counts is
when we actually use our numbers to
truly take into account our people I
learned that from a maid in the motel
and a king of a country what can you
start counting today what one thing can
you start counting today that actually
would be meaningful in your life whether
it’s your work life or your business
life thank you very much
[Applause]