Business (and Psychology) Lessons from the CEO’s

Michael Feuer, CEO, Max-Wellness

To be successful as the CEO of a large company, you have to have skills that few other people have.  You have to simultaneously be a disciplined organizer and a creative innovator.  You have to drive the economics of your business while motivating and engaging the people in your workforce.  You have to drive a large team of people to spend most of their waking hours contributing to the success of your business.  More than anything, you have to understand how people tick.

In the last few years, I’ve learned a lot about business, motivation, performance, and general human psychology, by observing some of these leaders.  Here are a few examples:

Michael Feuer, CEO, OfficeMax, Max-Wellness:   To a certain extent, Michael Feuer inspired this article, because I received an advance copy of his new book The Benevolent Dictator, in which he shares lessons from his success with OfficeMax (a company he started with $3 million and then sold 16 years later for $1.5 billion) and now his new foray into the wellness space with Max-Wellness.

I like his “Benevolent Dictator” concept.  A strong manager has to be somewhat dictatorial in style in order to cut through red tape and get things done (I talked about this in my article on “Radical Game Changing Innovation.”)  But they have to be a “benevolent” dictator, in that they use their dictatorial powers out of compassion for their employees and their customers.  This is not the traditional fairy tale version of collaborative leadership that we hear from other business or self-help books, but it rings true for me.   People want to follow leaders who are decisive and can take charge of a situation.  Collaboration can only get you so far.

Howard Schultz, CEO, Starbucks:  I’m not a coffee drinker.  So I’m not necessarily an avid Starbucks fan.  But I’m impressed with Schultz’ ability to drive and then maintain Starbucks’ position as a leader in the industry with a singular focus on the quality of the customer experience.  Starbucks became successful by dumping their entire marketing budget into creating the right customer experience.  And Schultz maintains that success by constantly making big bets on the quality of the experience that drives his customers’ loyalty. 

The latest example is free wifi in all Starbucks locations.  This was not an easy decision , some customers complain that now they can’t get a seat in their favorite Starbucks because everyone is there on their laptops.  (I know this because I’ll often spend 6 hours on a Friday morning working at Starbucks—cost of admission: about $10 for a smoothie, a breakfast sandwich and a pastry.)  But Schultz stands by the decision because it enhances the quality of experience for most customers and enhances their vision of Starbucks as the “third place” between work and home.

Tony Hsieh, CEO, Zappos:  I’ve learned a lot from Tony Hsieh (and written about it here and here.)  Hsieh (who also studies and applies positive psychology to his business) has realized that creating the right culture is the key to his success.  He does this by making sure the culture is not mandated from the top, but is an evolving collaboration created by everyone in the organization.  His focus has been on hiring right, and then incentivizing people to leave if the culture fit is not exactly right.

He also focuses on the R in PERMA.  Relationships.  The workplace is a social space where people are encouraged to express their individuality but also to connect and engage.  Hsieh thoughtfully ensures that employees have opportunities to meet and interact throughout their day in informal settings.  And he uses technology to measure and reward the connections between employees.  I can’t think of anyone who has been as good at tapping into the social nature of the workplace.

Chip Conley, CEO, Joie de Vivre:  I’ve never met Chip Conley, but I feel we have a lot in common.  We both work in the hospitality industry, and we both apply psychology to how we work.  (I don’t know of anyone else who directly and overtly applies psychology research to their work in my industry.)  Chip Conley’s simple focus has been to help his customers feel self-actualized by helping them make progress along Abraham Maslow’s “hierarchy of needs.”  This is a strategy for success that could apply in any business, but especially in the touchy-feely, human world of hospitality.  At the heart of Conley’s strategy is the simple reminder that in any business interaction, both sides are human beings.

Isadore Sharp, CEO, Four Seasons:  The first 14 years of my career were with Four Seasons Hotels and Resorts (starting out as a lifeguard at the swimming pool and eventually opening and operating spas and recreation areas at luxury resort locations around the world.)  There is nobody that I have learned more from than Isadore Sharp.  The success of the Four Seasons brand is a direct reflection of Sharp’s focus on quality.  There is something very pure about working for a company whose mission is simply to be the best at everything.

The level of service in a Four Seasons is not restricted to employee interactions with guests.  Sharp created a culture where that same level of service is extended from managers to employees and from employees to each other.  I’ve never worked anywhere before or since, where I felt like such a valued member of a tight knit community, all working towards a common goal of being number one.

Frits Van Paasschen, CEO Starwood Hotels and Resorts:  I would be remiss if I did not include a lesson learned from my current CEO, Frits Van Paasschen.  Van Paasschen adopted a strategy of realistic optimism in order to guide our company through the recession.  While “doom and gloom” was abundant on Wall Street, Van Paasschen strove to “define reality and give hope.”  He made the tough decisions necessary to keep his company healthy through the downturn while keeping everyone focused on a brighter future with a strategy he called, “owning the upswing.”  Today, Starwood is seeing the fruition of that optimism.

A question for my readers . . . who else should be on this list?  And what have you learned from them?

References and recommended reading:

Conley, C. (2007). Peak: How Great Companies Get Their Mojo from Maslow. Jossey-Bass.

Feuer, M. (2011). The Benevolent Dictator: Empower Your Employees, Build Your Business, and Outwit the Competition. Wiley.

Hsieh, T. (2010). Delivering Happiness: A Path to Profits, Passion, and Purpose.  New York: Hachette.

Schultz, H. (2011). Onward: How Starbucks Fought for Its Life without Losing Its Soul. Rodale Books.

Sharp, I. (2009). Four Seasons: The Story of a Business Philosophy. Portfolio Hardcover.Onward: How Starbucks Fought for Its Life without Losing Its Soul

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3 Responses to Business (and Psychology) Lessons from the CEO’s

  1. Marie-Josee Shaar June 7, 2011 at 11:56 am #

    I have to admit that I don’t know enough about his personality and precise vision, but at first glance Steve Jobs comes to mind. He must have a clear focus on design, customer-friendliness and customer experience for his products to be so simple to use, yet complete and successful as they are!
    MarieJ

  2. Jeremy McCarthy June 12, 2011 at 10:11 am #

    Hi MarieJ, Yes you are right, Steve Jobs is conspicuously absent from the list. He has a reputation for being somewhat of a tyrant but it probably falls into the “benevolent dictator” category. He has a clear vision for how he wants things to be and doesn’t let others derail him from his course which is what leads to such innovative products that (as you point out) are all about providing a great customer experience.

    I just bought my ipad2 and I couldn’t believe the experience. The apple store near me sells out every day by 2pm so I had to leave work at 10am to go to the store and wait on line for one. Although I know they have struggled with inventory issues, I think they have turned their challenge into an opportunity by creating a sense of scarcity that makes their customers value their ipads even more. Once I got my ipad and they were helping me to get it set up, every employee in the store walked over to me and said, “Oh, you got an ipad? Congratulations!” As if I had just won the lottery. And in a way, I felt like I had.

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