As an Entrepreneur and NYTimes Best-Selling Author, Chip Conley talks about how your emotions as a leader are contagious, candid confidence, and his belief that a great leader is a kind of servant leader.
Every few weeks as part of The Heartbeat, I ask one question to a founder, CEO, or business owner I respect about their biggest leadership lesson learned. This week, I interview Chip Conley, an Entrepreneur and NYTimes Best-Selling Author.
Have you been enjoying these Heartbeat episodes, lately? If so, it’d mean the world to me if you wrote us a review in iTunes. The more reviews we have, the more we’re able to share all our lessons from leaders. Thank you! <3
CLAIRE: Hey everyone. I’m Claire Lew and I’m the CEO of Know Your Team, we’re software that helps leaders avoid becoming a bad boss. And today, I am so honored to have an absolute expert on leadership. Today, I have Chip Conley who is a New York Times bestselling author, an incredible entrepreneur who started a boutique hotel company, Joie de Vivre, I believe maybe 24-some years ago.
CHIP: Thirty two, 33 years.
CLAIRE: Oh, 32. Eventually sold it and really was an absolute standard for hospitality very much in the industry. And then, more recently was Airbnb’s Head of Global Partnerships, I believe.
CHIP: Global Hospitality and Strategy.
CLAIRE: Long title. And no doubt, living up to it. And most recently though, the reason I had reached out actually to Chip is because he wrote this incredible book called Wisdom at Work which you’ll notice I’ve got like a million little sticky notes in it because I was so taken by it. It talks about the makings of a modern elder in the workplace and the differences in generations in the workforce. And was really inspired reading it, thought about just sort of my own personal growth about my parents. And so happened to see Chip speak specifically about this topic and the book in San Francisco and so begged to have him on the podcast and here he is today.
CHIP: I’m honored to be here, Claire. Thank you. It’s great to be here.
CLAIRE: Awesome. Chip, here’s how this works. I’ve got one question that I’m going to ask you about leadership. So, you’re ready?
CHIP: Yep. Go for it.
CLAIRE: All right, let’s do this. The question that I’ve been asking leaders who I respect and admire is what’s one thing or several things that you wish you would’ve learned earlier as a leader?
CHIP: I think this is true of many of us who have had some years behind us as a leader. I don’t think we realize as we grow into our leadership that the more senior you are in a group or an organization, the more contagious your emotions are. This is, I think, particularly true in young companies where the power, you know, moves to a 25 year old or a 32 year old much faster than it did in the past. Whatever you bring to work with you, whether it’s anxiety or anger or dismissiveness or judgment, it’s sort of writ large. It becomes something that as you get more senior, people almost are looking for signals from you. So, they sometimes make a story in their own head about what it is that they think is going on in your head. And so, this is why being an authentic leader and pretty much what you see is what you get is helpful.
First of all, it takes away the gossip and the storytelling of like, what’s really going on here? But also, I think it helps you understand as that leader that whatever you’re putting into the workplace is going to get contagious. It’s going to become viral and it’s going to grow. Therefore, understanding that vulnerability and authenticity is how you’re going to operate helps create a workplace where people are more likely to be authentic as well.
CLAIRE: I’m smiling over here for so many reasons. One, this analogy of or the description of emotions as being contagious, I think we often don’t think of that. We think, the things that are going inside my head, the struggles, the concerns, the anxiety or whatever, that’s about me. That has nothing to do with my team. But to your point, it sort of seeps through, no matter how much you might try to disguise it, you can’t disguise it. You might argue or…
CHIP: I would also argue the higher you are in leadership, it may not even be an issue of disguising it. It may be an issue of people making stories up thinking that’s what’s going on when in fact it’s not even accurate. So, there’s one piece which is you don’t know the effect of the nonverbal emotional cues you’re putting out there.
CLAIRE: Ah, yeah.
CHIP: And that is the obvious one in terms of like, you come into work and everybody’s sort of excited to see you and you don’t notice anybody. No eye contact. There’s clearly something on your mind. You go [inaudible]. So, everybody notes that. Now, that’s an obvious one and that can be contagious, “What’s going on?”
But what’s more actually interesting is the more you leave it up to other people’s imagination about what is going on for you, the more likely there’ll be storytelling. I’m not saying that there won’t be saying telling anyway. There’ll be story telling anyway, but before you give some authentic clues about what is going on for you, the more it takes the wind out of the sales of the gossip and the kinds of storytelling that people go through trying to understand what’s going on with their parent. Because a lot of this has to do with how people take someone in leadership and put them up on a pedestal like they do a parent. And I’m not saying all of this is just purely parent-child relationship stuff. It’s not only that. But it has a lot to do with just people who are perceived as the person who defines culture and behavior in a position.
CLAIRE: I think what’s so common is that we, as humans, we just want to make sense of things. The things just have to make sense to us in some way. That is why the stories exist. It’s why the narratives exist. It’s why the assumptions creep in. And to your point, if we as leaders aren’t intentional and explicit helping people make sense of the things, and it’s hard to help people make sense of the things when we don’t even know oftentimes what we’re putting off. To your point being, being more revealing. It’s interesting to hear how that can eliminate gossip. I’m curious for you, Chip, when in your career has this happened? When were you unintentionally admitting those emotions or you had the grimace on? Have you sort of gotten gone through these little mini wars yourself?
CHIP: This will be a story in three acts. The first act is when I had no clue. I’ll tell you a story when I was two and a half years into running my hotel company. We only had one hotel and we had an earthquake in San Francisco in October 1989. In an earthquake, the city in flames, there’s a lot going on. A number of people died in The Bay, the Bay Bridge collapsing. There was a lot of fear around the fact that if you’re in the hotel business, nobody was going to be coming to town. At that time, I know that as a 28-year old leader of the company, I had no clue how contagious my emotions were. And so, my level of fear around it was really amplified by the fact that I was the young CEO of this little company. It was only months later that I found out from some of the team that my living in fear and having it show up in all kinds of ways, including being testy with people, I’m generally a pretty friendly guy, meant that it didn’t help the situation at all. It made the situation worse.
Act Two is many years later in the dot-com bust. I started the company in 1987. First act is 1989 October. Now accelerate to 2001 and 2003. We’re the biggest hotel here in the Bay Area. The biggest independent hotelier with 21 hotels around the San Francisco Bay Area, and most of them in San Francisco. And we have the dot-com bust. And so, what I actually got right this time is instead of sort of going into my bunker mentality, which a lot of times leaders do when they’re actually really in a troubled place, they try to actually sort of hold themselves up in a room with people and it’s very private. Everything’s a secret. And so, I didn’t do that. Instead, I was very open and public and I was, as one person called me, a vulnerable visionary.
During that time, I was pretty authentic about how serious this was to the hotel market in our region, to us, as a company, we were the largest hotelier and all of our hotels were in that region. So, we were vulnerable, but I actually created a very visionary idea with my senior leadership team of how we were going to get through that time. And we were really authentic about it. And that period from 2001 to 2006, we tripled in size during a time where most of our competitors had bankruptcies and foreclosures. And it had a lot to do with what I wrote about in my book, Peak: How Great Companies Get Their Mojo from Maslow. How do you apply Maslow’s Hierarchy of Needs to an organizational setting? And so, I can say that time, I was damn good. I mean, I really was.
CLAIRE: It worked.
CHIP: But I was very thoughtful about it. It was something I knew I needed to show up that way.
Now Act Three. So basically, Act One and Act Three, we’re not very good. Act Two, I was good. Act Three, which was the great recession, unlike the dot-com bust where I sort of felt like we, as a team, were gladiators going through a difficult time. What I felt in the great recession was I was a prisoner. I was in a jail. And it was a jail of my own making in the sense that yes, the financial situation was more dire than it was during the dot-com bust and we had more hotels. We had a thousand employees during the dot-com bust. We had 3,500 employees during the great recession. And we had just opened a lot of hotels. But actually the situation was not so much different, but my perspective was. I didn’t want to be CEO of the company anymore. So, that was 22, 23 years into being CEO of the company. Ultimately, I sold the company in 2010. But 2008, 2009 were really rough years because I knew I was supposed to be putting a smile on my face. I knew I was a vulnerable visionary. And in fact, I had a hard time hiding my sense of wanting to just go away. And then ultimately, I had a really hard time with the idea that I had to be quite private about the fact that we were going to sell the company to a private equity firm. So, it was a really hard time. I wouldn’t wish that on anybody else or on myself again. So, I think I’ve learned my lesson along the way. The good news is that a lot of those people have seen me, there’s a few people who’ve actually been with me on all three of those eras during the course of now, what is 32, 33 years later from when I started the company.
CLAIRE: Incredible. Thank you for sharing that. I feel like in many ways, you are exemplifying right now being a vulnerable visionary by not just showing the highlight where you could have very easily just told me Act Two. You could have very easily just been like, “Claire, here’s where I really nailed it. Here’s when I was really vulnerable. Here’s how as authentic as a leader, we rallied together and we’re successful,” and you chose to share three stories, two out of three being not as positive. So, it’s in many ways really walking the talk here, Chip. But I do want to zoom in though on the act two, like this idea of a vulnerable visionary, just very tactically for people who are maybe even uncomfortable by the word vulnerable. So many managers and leaders, I’m sure you’ve met and encountered who are like, “Maybe that works for you, Chip. Maybe that’s a good style for you, but that doesn’t work for me.” Or like, “It just isn’t my style.” What would you say to that? What advice would you have for someone who’s trying to wrap their head around it?
CHIP: I don’t think everybody has to be a vulnerable visionary. So, let’s use different words to maybe describe this. So the visionary piece was confidence. You had to have some confidence. If you were lacking confidence as a leader about how you’re going to get through this, that’s not a good feeling to be working with an organization where the leader is clearly lacking confidence. So, that’s a different way of saying visionary. The vulnerable side is being candid. Maybe it’s just candid confidence.
CLAIRE: Got it.
CHIP: Candid confidence, another alliteration!
CLAIRE: I was going to say, “You’re good with these.”
CHIP: Candid confidence might be less extreme in terms of vulnerable visionary. Vulnerable and visionary, wow, those are so different. But candid just means you’re doing your best to actually over communicate and help people to understand where things are.
And so, that level of candor is really important during anxiety producing times because what happens is during stressful times, we tend to go to the bottom of Maslow’s pyramid, meaning we go to physiological and safety needs, we go to the survival needs. And when you’re in survival needs mode, it isn’t very good for anybody in the organization. It means not only is the contagion of anxiety and fear there, but it also means people are less likely to be creative or innovative, less likely to think long-term, less likely to actually look at what’s best for the organization as opposed to what’s best for them personally. As such, there is attacks on the organization. Attacks that actually means less creativity, less innovation, frankly less happiness that has a long-term effect on the organization moving forward. And if you don’t recognize that, you may not actually be the leader of that company three or four years from now when the results of that start to become very clear in performance for the organization. It may even take less than three or four years. But usually, it takes a while.
I’m a big believer that if you have a toxic culture which leaves happy employees, which generally leads to, in a service industry especially, unhappy customers, which leads to market share being lost, which means profitability and sustainability as a company starts to go away. That virtuous circle, which the one I just described as the opposite of a virtuous circle, toxic circle, that sometimes takes some time from when the culture starts to get spoiled to when market share and profitability, start to actually fall off substantially in that period of time. And this is why if you’re buying a business, you have to be very careful about, “OK, wow, the numbers look really great.” If all you’re looking at is the financials, what you may have is a company that has been exceptionally thrifty toward its employees and customers to actually mask something. And so, the numbers look great and then you come in and realize, “Oh my God, we’re in a tailspin. I didn’t even realize.” And so, that’s why culture is important. This is why what I call Karmic Capitalism is important. What goes around comes around. It sometimes takes a while for it to come around.
CLAIRE: Yes. Do you think that that loop is true, not just in terms for companies, but in terms for individuals as leaders and for why leaders actually have such a hard time really fixing and doing something about their blind spots? Is it because the consequences of not being transparent, not treating employees with force back, you don’t maybe see those necessarily on the balance sheet until a few years out? What do you think accounts for that? Do you think that loop is the same or different?
CHIP: Yeah, I think it’s true. It’s more of a human thing than even a leader thing.
It’s hard to acknowledge what we didn’t do well, hard to admit it, hard to be in a place of looking vulnerable like that. And where it’s more complicated from a leader’s perspective is if you already say what your blind spot is, then everybody starts looking for it. So, they start looking for other blind spots you might have. So there’s an element of you’re damned if you do, damned if you don’t.
If you’re sort of in a very Trump-ian kind of way, admit it. I’m not here to say good or bad things about him, but his style of leadership is a specific style, which is you don’t admit any fault because there’s an element of, “They’re going to say what they say anyway, so I’m not going to give them any ammunition.” That’s one path, the exact opposite of the path I’m on. I think that path ultimately creates a very inauthentic leadership team and workplace because everybody’s hiding something and there’s a sense that people have blind spots left and right. The flip side of it is what’s something that’s closer to what I do that could be problematic as well. What if someone is constantly being the vulnerable or the candid without being the visionary or the confident, you do get to a place where you just sort of feel like you’re in a personal growth therapy workshop as a leader of the company or in like you’re in therapy. And that doesn’t feel good for a lot of people either. It’s a little too much information. I really want somebody who’s a role model I want to live up to and this person always seems to be getting in their own way.
And for some people, I’m a relatively deep person. I tend to look at things deeply and that’s just how I am. There’s a good and a bad side to that. If you’re someone who’s just generally more shallow in the way you live your life in the world, you really don’t want to live with a leader who’s sort of taking you there because it’s not necessarily where you want to go. And I’m not saying that’s true for everybody because as someone that’s generally open, I have absolutely had people in my company who don’t fit this profile, who over time, found it was quite liberating to actually be a lot more open and direct in how they presented themselves to the world, especially to their teams. Because in some ways, there’s attacks on your nervous system when you’re in this sort of camouflage kind of way of trying to look like something that is maybe not what you were feeling inside.
CLAIRE: Absolutely. I think not only is attacks to sort of never admitting any fault, but I think for some people who might not always be comfortable with sharing things all the time, all of a sudden they might feel like they’re bearing their soul every single time they have to share like company performance or financials or they try to be a little bit more transparent with the company if that’s outside their norm. I think what I find really worth noting and for all our audience who are listening and watching though, is that in any way that you want to think about it, on the spectrum of sharing absolutely nothing and all the Trump and sharing absolutely everything, all the therapy session, is that just in general though, people like you were saying, people need to have that hierarchy of needs fulfilled. And so, in order to create a safe environment or for people to understand what’s going on, you have to give them information. You have to give them context. You have to give them tools for making sense of, “Oh my gosh, the market and competitors and this person.” “This company raised a bunch of money,” or, “They’re hiring all these people,” and making sense of that. I mean, that’s ultimately the leader’s job. And so, the degree onto which you’re on that spectrum, I just really appreciate this idea of you have to share the information in some way.
CHIP: I think that some people would say no that you don’t have to. There’s an argument out there that I disagree with, but that some people might espouse, which is don’t give them something they can’t handle. And in some ways, where it comes from is this place of like these people are children or they’re not responsible or they’re going to use this information mistakenly or wrongly.
CLAIRE: Or it overburdens them.
CHIP: There’s an element of like, “They’re on an assembly line. Let’s just let them just do their assembly line jobs.” There’s a spirit of a robotic perspective, which is don’t distract them. This could be distracting. The mistake in that is to think that people really are robots, that the conversations are not going on.
CHIP: The conversations generally are going on. It is impacting engagement. It is impacting satisfaction both for employees and for customers. I think that there’s an element of when you want someone to act like a robot and then you wonder six months later why they have no engagement or there’s no creativity, it’s like, “Well, you wanted them to be a robot.” No wonder why people don’t come up with innovative new ideas or problem solve because you’ve asked them to be a robot.
CLAIRE: Absolutely. It’s like the assumption that you assert on other people is what you’re going to get in return. If that’s what you believe, then that’s what people will give. They’re not going to give you anything more.
CHIP: Yup, exactly.
CLAIRE: Chip, I want to be respectful of your time here because I truly could ask you a million questions. I have so many. I can talk to you for hours. But one thing I did want to end on is, you were asked by the CEO of Airbnb, Brian Chesky, to be in this role that they never had had before – the Global Head of Hospitality. And you entered this company, never having been in a tech startup before and very much being a mentor and advisor to so many leaders in that company. What was the thing that you found yourself repeating the most to new managers, senior managers, to Brian? Were they sort of different messages? What did you find yourself being like, “Oh wow, here’s the thing that’s very obvious to me that clearly isn’t obvious to so many of these leaders.” What might that have been?
CHIP: I think probably the predominant, usually it lead to something around psychology or the human condition or understanding people. Emotional intelligence, let’s call it. I think often it would be how will your team respond to that? What will be the perspective of your team on this? And it related to how is — I believe that a great leader is sort of a servant leader. And I hate the term servant leader. It seems very US civil war times, slaves in the south. Servant leadership’s basic premise is actually quite positive, which is the higher you are in an organization, the more you’re there to serve those who are lower in the organization and doing frankly a lot of the core functions in the organization.
So, the thing that I would see often with young leaders is a sense that they felt like they had to do it all themselves. My job at age 27 with a bunch of director at 23 and 24 is to be the wise one and figure it all out. And often, the best way to try to solve something was not to try to do it alone in that sort of John Wayne kind of way, but it was instead like individualism. It was really actually how do you engage your team in a conversation about this so that they actually feel like their fingerprints are on the answer you come up with as well. Sometimes, there’s a risk in that in terms of anarchy and democratic decision making and nobody gets anything done. That is a risk. And sometimes, there’s a risk that the person really wants to make all the decisions themselves. They love the fact that there’s the autonomy that they want to have. And so, that’s worth considering as well. But more often than not, bringing it up at least to some of your senior leaders to sort of get them engaged in helping to create the solution, it comes back to a basic fundamental in life, which is if you weren’t part of creating the solution, you’re not going to be very good at executing it. So generally, people like to execute a plan that they have their fingerprints on.
CLAIRE: Absolutely. What an incredible takeaway of understanding. If you want performance, if you want great execution, the buy in has to be there. The actual participation, the co-creation has to be there. And to your point, is there a potential for things to be sort of side railed or for there to be a loud room with a lot of voices? Absolutely. But in many ways, that’s the role of leader to navigate and finding ways to pull all the threads together in some way that’s productive.
CHIP: And finally, I think having a good, strong, unified solution that may not be as perfect as your own but have everybody aligned around it and then executing on it is probably going to be more successful than the brilliant idea you had that nobody else really felt to any ownership over and therefore didn’t execute on it with a sense of agency or ownership.
CLAIRE: Absolutely. That alignment is everything. Chip, thank you so much for all the gold that you’ve shared with us today. I know so many folks who are listening and watching could not be more grateful. So, thanks again.
CLAIRE: Yes. Please check out the website. Definitely pick up the book. I learned so much. I just like blazed through it. It was so good. So, thank you so much again, Chip. Appreciate everything.
CHIP: Thank you, Claire.