Maslow’s hierarchy of needs for businesses

The test of a good theory is how its principles/framework can be leveraged in other domains outside which it was originally intended. Maslow’s hierarchy of needs describes the stages of human motivation and needs. The theory is often represented by a pyramid with foundational “needs” at the base with increasingly advanced needs as you move further up the pyramid. Maslow suggested that the most basic needs be met before an individual was is able to focus on attaining higher level needs.

Another parallel is sports. Take golf as an example: I started by learning “swing fundamentals” like stance, body position, grip etc. before I progressed to more advanced techniques like shot shape, controlling distance, spin etc. If I’d tried doing it the other way round I would have been one frustrated golfer.

In the business world, this same model can help organizations prioritize activities that lead to long term, sustained growth. Without foundational elements in place, other “higher level” activities will not accrue to any value and will ultimately fail. This is common in businesses that are trying to grow but find themselves bumping up against an “invisible ceiling”, which could be measured in revenue, profit, number of people etc. Often, it’s the lack of fundamentals that stunts company growth and eventually lead to customer and talent retention problems.


Mission, Culture & Values

In the absence of clear direction / higher purpose (mission) and pillars by which to guide decision making (culture & values) organizations find it hard to steer away from uncertainty and ambiguity. Teams are unclear about how their activities accrue to the company’s goals and how to prioritize the many facets of the work they do. The most successful organizations are not only clear about their mission, culture and values but their team members demonstrate them consistently and hold each other accountable for following them. LinkedIn’s CEO, Jeff Weiner, does a really nice job of establishing mission, culture and values – have a read through their “Culture Book” here for some further inspiration on how to lay out these important items.

Corporate Governance

The meaning behind corporate governance is often clouded by finance, but at its essence, it’s really just a fancy term for defining who does what in an organization. Clear roles and responsibilities are important to help facilitate empowerment, leadership and accountability which are essential as an organization grows and inevitable complexity creeps into getting business done. It also helps team members build clear expectations on how to progress to the next level in their careers. Harvard Business Review has a good piece on the importance of defining roles and responsibilities.

Business Goals

What is the company trying to achieve? Defining, communicating and regularly reviewing company goals helps align teams and individuals on activities that accrue to the overall mission. They should be strategic as possible so that you avoid the “moving the goal post” dilemma and teams have time to plan and execute against them. Peter Drucker’s SMART goals are widely regarded as a good framework for how to set goals.

Unique Differentiation

Being able to create unique value for customers allows a company to outmaneuver the competition and drive customer retention. This is arguably the area where a company is able to generate the most incremental value for stakeholders. Capitalizing on differentiation is done by telling the story to the market through the sales and marketing teams and should be woven into the brand positioning. Entrepreneur magazine lays out principles to think about when defining a company’s unique differentiation.

Sustained Innovation

The ability to continuously create new products, enter new markets and disrupt incumbents helps organizations create sustained, long term growth. Cultivating sustained innovation is the “self-actualization” moment for an organization. Consider Apple, who defined the era of digital music and then proceeded to reinvent the smartphone which set them on a path to become the largest company on the planet by market capitalization. Often, sustained innovation is baked into an organization’s culture to encourage more frequent occurrence. Fast Company writes about this concept and how to approach it.

Where to start?

Achieving all of this, and reaching sustained innovation is by no means easy. It starts at the top with the CEO. He or she is responsible for leading and setting forth many of the high level initiatives; mission, culture and vision and corporate governance. At the same time they need to be putting in place a leadership team that are able to plan, budget and execute those initiatives and then empower and hold them accountable for driving outcomes that accrue to the organization’s success.

Have a different view on Maslow’s hierarchy of needs for a business? I’m waiting to hear from you in the comments below.


— Hat tip to Ray Wang at Software Insider for his version of the business hierarchy of needs which helped me structure my thinking around the priorities.