Business Hierarchy of Needs
Beginning in 1943 and continuing throughout most of his life, Abraham Maslow developed a theory of human behavior that included his “Hierarchy of Human Needs”. This Hierarchy was in the form of a pyramid with five levels. Working from the bottom, the pyramid contained four levels of deficiency needs, physiological, safety, love/belonging, and esteem. The fifth or top level was called being needs, or self-actualization and self-transcendence. Maslow explained behavior in terms of this hierarchy.
Since business is a human construct, businesses can be explained in much the same manner using what I call a Hierarchy of Business Needs. The Business Hierarchy consists of four levels of deficiency needs and one level of being needs. The deficiency needs are Physical, Safety, People, and Public. The being need is Creation.
• Physical layer (Basic Need)
• An office, plant, warehouse
• Safety layer (Basic Need)
• OSHA standard compliant
• Risk profiles have been done and all safety precautions are completed
• Safe neighborhoods
• Reasonable housing available in a reasonable distance
• Food available
• Good benefits and salaries
• People (Basic need)
– Right talents for jobs
– Training
– Group chemistry
– Work challenges
– Room for growth/promotions/satisfaction
• Public (Basic need)
– Advertising
– Distribution/Delivery
– Great products meeting consumer needs
– Respected organizations
– Profitable
– Desirable employer
• Creation (Being need)
– Innovation
– Constant improvement
– New products
– Improved products
– Improved processes
– Leading edge
Geoffrey Colvin in Fortune Magazine (October 2, 2006 – Managing in Chaos) suggested that companies are not really structures or machines or collections of assets. They are groups of people. Business changes quickly, humans slowly. The biggest problem for managing in chaos is getting people in groups to behave in new ways. Companies and people can change and Geoffrey Colvin sites Intel’s decision to abandon dynamic random access memory (DRAM) – a product that built their early success and go into microprocessors. Andy Grove called this an inflection point for Intel or “a time in the life of a business when its fundamentals are about to change.” (Andrew S. Grove – Only the Paranoid Survive) What structure can help companies manage chaos and change and continue to adapt?
Maslow talked about Basic needs and deficiency characteristics. In business it applies, as well. Neurotic companies are companies that fail. Companies fail, along with other complex determinants, due to unfulfilled needs for safety, good people, great products, respect, and prestige. Healthy companies succeed. Healthy organizations have a superior perception of reality; an increase in problem-centering; more democratic structure; and greatly increased creativeness, just like Maslow’s self-actualized individuals. Further healthy companies minimize the dangers and enhance the attractions. These companies understand that anxiety kills curiosity and exploration. The best companies must serve two masters at once: they understand the world of competition; and they defend against the world of competition. It is a struggle between fear and courage. As fear increases, it will cut the impulse to learn or know and at the same time factors that increase courage, freedom, and boldness will free our ability to learn, adapt, know, and grow.
What should companies do? Being profitable is not enough. Companies need to look at company characteristics and they need to look from the bottom of the pyramid upwards. Companies need to remediate basic, lower (deficiency), unhealthy characteristics that will create the environment for healthy higher (being) characteristics to flourish. Run risk profiles. Are your workers safe? Do you have lots of sick days, injuries? Some companies pay for health clubs and monitor if the workers use them or have gyms on-site. Find staff friendly things to do that do not cost much. For example: compressed work weeks; telecommuting; relaxed dress codes; and flexible work hours. Management must instill trust, recognize achievement, and develop a sense of purpose and teamwork. Fortune noted that their top 100 Best Companies to work for averaged 85 years in business, while the national average was less than 20 years.
Some questions companies should ask:
• Do your workers feel secure?
• Do you have open, fear-free communication?
• Do you seek out ideas throughout the company?
• Do you reward courage, though an idea might fail?
• Do you have realistic, attainable goals and measures of success?
• Do you have common goals, chemistry, and shared experiences?
• Do workers respect and trust one another?
Companies that truly care about their employees, are willing to change from the bottom up, who encourage boldness, and are willing to take risks will be the survivors.