Michalowicz discusses the Business Hierarchy of Needs. In 1943, Abraham Maslow identified what has now become known as Maslow’s hierarchy of needs. Maslow’s theory states that there are five categories of human need: physiological, safety, belongingness, esteem, and self-actualization. In order for us to attend to something higher on the list, we first need to make sure that our needs are met in the categories below it. So, for example, before you can focus on meeting your needs for love and belonging, you first need the basics: air to breathe, adequate hydration and nutrition, and a safe place to sleep. Maslow’s hierarchy of needs has a direct correlation to entrepreneurial progress. A healthy company must first attend to the base needs of sales, profit, and order before the leadership (you) can focus on more advanced pursuits, such as impact and legacy.
The key to climbing the hierarchy is simple: Fully satisfy your business’s current level of needs, not by rushing to the apparent daily demands, not by addressing advanced needs before basic needs, and certainly not by trying to fix everything at once. To do this, use the Business Hierarchy of Needs (BHN): Sales, Profit, Order, Impact, and Legacy. There are five core needs for each of these five.
I enjoyed the section on impact the best do here is my interesting take-away from it:
Transformation with Impact (first get, then give): With all of your five basic needs at the IMPACT level satisfied, price is a secondary consideration for your clients. They are no longer asking, “Is this the best deal?” They are asking, “How can I be part of this?” Their consideration becomes more about the movement or meaning than merely consumption. At the IMPACT level, you build brand loyalists, ambassadors, and lifelong members, because your company is on a mission for a greater good.
Need 1. Transformation Orientation: Does your business benefit clients through a transformation beyond the transaction? The Lost Kitchen in Freedom, Maine, has eight tables and one seating per night. This means they can serve about 45 customers—for dinner. No second or third locations. No breakfast, no lunch, and no Sunday brunch. No happy hour. No line out the door. They are only open nine months out of the year. Only eight tables and one seating, and the Lost Kitchen is a remarkable, if not magical, success. In fact, despite their remote location, theirs is one of the hardest reservations to get in the country. After losing her diner and her home in a divorce, chef and owner Erin French opened her farm-to-table restaurant with the intention of providing more than a meal for her customers, whom she considers guests. She wanted to create a dinner-party experience in keeping with the pace, values, and ideals of her community. And she wanted a restaurant that freed her from the typical grind most chefs endured without question. Shortly after opening the Lost Kitchen, they received international acclaim. French received three coveted James Beard nominations and published her first book.
Need 2. Mission Motivation. Are all employees (including leadership) motivated more by delivering on the mission than by their individual roles? Once you realize your mission is your song, you and the people who choose to work with you will be able to quickly pick out the melodies that move them. Your mission is your melody. Identify one that connects with your soul, and start singing.
Need 3. Dream Alignment. Are people’s individual dreams aligned with the path of the business’s grand vision? When your employee’s job is designed to align with their personal goals and dreams, they will perform better for you and they will stick around. This is because you are making an impact on their lives that goes beyond a paycheck and health insurance. You are helping them create the lifestyle they want to live and become the person they want to be. You are putting them first, and as a result they put you first.