Maslow’s hierarchy of needs is a motivational theory in psychology proposed by Abraham Maslow. It is comprised of a five-tier model of human needs, often depicted as hierarchical levels within a pyramid. According to Maslow (1943, 1954) this means that people are motivated to achieve certain needs, and that some needs take precedence over others. But Maslow’s hierarchy can also be applied to a company to help you get to the key of people’s motivational drivers. Think about it in this way…
As we start from the ground of Maslow pyramid there are a group of physiological needs such as food, water and rest. That is just the true essence for the survival of the human. As a parallel, a stable positive cash flow is the essence of the company’s survival, and it is as important as air for human beings. A company on that level of the hierarchy will focus on survival and pay the bills at the end of the month and repeat every next month.
We can describe every level using several dimensions. Those might be cash flow, reinvestment strategy, level of innovation, organisational structure and culture. You need to reach one level of hierarchy before you can reach the next one.
Once you have learned how to generate a stable positive cash flow, you can consider a more stable and predictable environment. You can do that via marketing channels that guarantee you enough leads with a predictable and measurable conversion rate.
The first two were straightforward, but generating a sense of love and belonging is more complicated. The company will focus on consumers loving the brand and employees feel as part of the family. Although those two might sound like two separate directions, in fact, you achieve both by taking care of your employees so they can take care of your consumers. This goes mainly through people development to become better at everything they do – on a product or service level, marketing, sales and communication with consumers. The crucial element of love is listening to what consumers need, and more often than not it is not the same they wanted the day earlier.
The next level of the hierarchy is esteem, it means for a company to gain a certain position on the market, perhaps even becoming a market leader, setting trends in the whole industry and deserve respect from competitors. To be that far, you already need to have strong foundations of consumers loving your brand and employees loving their jobs. From there you need to add a product or service innovation, to ensure that you listen to your customers and work hard to give them better products, services and experiences at all times. Beyond that you can take on the challenges for the whole industry and create partnerships even with your competitors to solve industry-wide problems that can help everyone move faster.
Finally, on the last stage of the pyramid, your company will set its mission not just to earn more money or to delight their customers and employees. Beyond that there is a mission to change something fundamental on the global scale, create a long-lasting positive impact on global challenges of our planet, like climate change, inequality, hunger and so on. On that level, the company actively distributes knowledge and other resources to support other members of larger ecosystems to fulfil the purpose and mission. The fulfilment of company purpose might become more important than preserving the company itself. Look at the image below: where do you think your organisation is on the pyramid?
How to attract and keep the brightest talent engaged
The most developed and talented people are at the top of the Maslow hierarchy. They have their own purpose and mission in life. And if this purpose is beyond becoming a great spouse or parent, they will look to the environment where they can fulfil their potential and accomplish the mission. For that reason, they often launch their own companies where they can be independent and flexible. However, creating your own company is not always an easy journey. They might experience plenty of challenges on the way, particularly if they are missing an entrepreneurial spirit, skills or don’t want to wait years to deliver on their mission. Some of those people would try to seek the right balance in the corporate environment, and only companies that match people on the Maslow hierarchy can be a nice fit.
So the question is, do you think you are losing your best people often? If so, it is probably the right time to reconsider your strategy and “go higher up” the hierarchy as a company. Once your company is on a certain level, it would be much easier to attract the people you want and help them fulfil their potential while making your business excel.
Who should be accountable for change and how to move to the next level?
Long-term strategies are better for most of the businesses if you can cope with immediate pressure from various stakeholders to deliver a high ROI immediately. For every CEO, it takes courage to play a long game when the board might decide that current financial results are not satisfactory and seek the replacement. So it is not only about creating a solid strategy to move to the next level and support complex change management initiatives on the way. It is increasingly important to develop a strong narrative for diverse stakeholders and explain the benefits of reaching the next level.
To achieve the next level you can use two different approaches. The first is to use a mix of consulting and coaching professionals to work hand-in-hand with your employees. The second will require you to significantly reshape your organisational structure, hire change management specialists and develop new skills within your teams. After the change programme is completed, you need to make sure that all the new elements such as vision, strategy, culture, behaviours, processes and so on are integrated properly and becoming part of the company’s daily life. Only at that point a company can succeed on the next level and if there were some external experts involved, they can safely leave the premises.
How this affects business performance
The trick with Maslow’s hierarchy applied to people is that usually one could not jump through two levels at once. A person normally needs to reach one level in order to “open” the next. We can say the same about businesses. You could progress to the top only gradually, making sure you have a strong position on the current level before considering the next move. You would consider that moving to the next level has a price to pay, but it will help if you think about it as an investment rather than a pure cost. Making customers love your brand has many expenses such as genius marketing, great customer care service and perhaps a load of work in R&D space to make your product or service much better than the nearest competitors. However, once there you can enjoy the return on investment in the form of significantly higher sales performance, more loyal customers and perhaps you can command higher prices for your premium product line.
I believe that companies of the future will build the environment that lets people become the best version of themselves and that would create an enormous advantage to the business.