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]