EMPRENDEDORES
ENTREPRENEURS
CHIP CONLEY
founder of Joie de Vivre
2. june-july 2012
The Joy of
Living
He can boast having done the impossible: come back from the dead. Rebel
entrepreneur, founder of the Joie de
Vivre hotel chain, author of several
best-sellers and a much-admired
speaker, Chip Conley’s most critical
moment came in 2008. He had just
finished giving a speech in St. Louis. He
was still on the stage when he suddenly
passed out, and his heart stopped. “But
like the Phoenix,” he laughs, “I rose from
my own ashes.”
Conley, who has an outgoing personality, had barely received his MBA
from Stanford back in 1987, when he
started on the road to building one
of the most important hotel chains in
the entire United States. The Joie de
Vivre Hospitality empire reports annual
revenues of US$ 240 million, and is
made up of 35 boutique hotels, 20
restaurants and five Spas. Today Conley is considered an exemplary leader,
and the creator of an organization
that manages to get top performances out of its employees. While he no
longer holds the post of CEO, Conley
continues to be involved, as strategic
consultant for the firm.
With his rare combination of
emotional sensitivity, business vision,
creativity and generosity, he implemented a singular marketing strategy and a
people-oriented management style that
is much admired in the market and on
which he has written several books, for
one of which—The Rebel Rules—Virgin
Group founder Richard Branson wrote
the prolog.
But, how did he manage to turn a
broken down hotel in San Francisco
into one of the most distinguished
hotel chains in the USA? How did he
bring annual personnel rotation down
to 25%—half the industry average? And
how did he manage to get through
two economic crises that devastated
the travel market and come out better
positioned than ever?
It was practically out
of the blue that Chip
Conley founded Joie
de Vivre one of the
most successful
hotel chains in the
United States.
Widely recognized
as an exemplary
leader, his greatest
virtue has been
to have suffered
successive crises—
both economic and
personal—only to
come through them
strengthened.
by FRANCISCA POUILLER
Each Hotel, Its Own Brand
The creator of the multiple awardwinning Joie de Vivre speaks somewhat
parsimoniously. He receives us at his
home—a refuge that looks like a Buddhist
sanctuary, complete with altar and pond.
It is a sort of ashram, which obeys to perfection the lines of feng shui architecture.
There, he meditates, works and writes.
At 51, Conley appears to have found
his balance. He affectionately recalls the
opening of his first hotel. “I was working
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3.
ENTREPRENEURS
Three views of the
Hotel Vitale: terrace,
lobby and round
room.
in a real estate firm,” he says, “but I wasn’t
satisfied. I decided to use my knowledge in that field to find something that
would challenge me and imply greater
creativity. It was then that I bought a
broken down hotel in a bad area of San
Francisco. I refurbished it and christened
it the Phoenix.”
The Phoenix emerged from an
original proposal, something unheard
of up to then in the industry: It was
conceived for a niche market, and its
style and aesthetics reflected the rock
and roll culture. Two decades later, it
has become an emblematic hotel that
has lodged such music legends as David Bowie, Linda Ronstadt and Nirvana,
and is the first in the largest chain of
boutique hotels in California and the
second-largest in the United States.
So, why the name Joie de Vivre? “Because of our mission as a company,” says
Conley, “and also because, through our
4. june-july 2012
service, we create experiences that honor
the joy of living.”
Over the course of time, other hotels
joined the Phoenix, each with a different style and a personality of its own:
romantic, luxurious, sophisticated...
something for every taste.
The method employed to design the
brand identity of each establishment is a
curious one. First the firm seeks a magazine that best represents the experience
it wishes to offer its guests. Then, five
words are chosen to describe the hotel
and its essence. With these premises in
place, the development process begins.
A couple of examples: The inspiration
for the Phoenix came from Rolling Stone,
while the Rex emulated the literary and
intellectual class of The New Yorker.
Applying this simple strategy to each
hotel facilitates the process of making
thousands of decisions, from which
market the hotel will be oriented toward,
to what type of services it will offer its
customers.
Happy Employees
Since its founding, Joie de Vivre has
been growing strongly and steadily.
It was already well positioned in San
Francisco when, at the end of the
1990s, the dot com bubble burst. Later,
the terrorist attack on the Twin Towers
in 2001 and the pandemic SARS scare
just afterward dealt the travel industry a
severe blow. In short, the chain’s annual
revenues dropped from US$ 100 million to US$ 75 million.
But the decision of both Conley and
the company’s board of directors was
that the problem should only affect
them: They either cut their own salaries
or simply worked without pay, “in my
case,” says Conley, “for three years.” The
staff highly valued this sacrifice, since
despite the crisis, no one was laid off.
The Hotel
Phoenix, pool and
suite.
“
The name Joie de Vivre
reflects our mission as a
company, and we also chose it
because, through our service,
we create experiences that
honor the joy of living.
“
Troubled by so many problems, as
he was browsing the self-help shelves
of the bookstore one day, Conley came
across Abraham Maslow’s Toward a
Psychology of Being. And it was through
the “pyramid of needs”—a model that
proposes prioritizing human needs—that
the hotel chain owner found the inspiration to write Peak: How Great Companies Get their Mojo from Maslow. Says
Conley: “What Maslow says, basically, is
that people aspire to ‘self-realization’, and
that when they achieve it, they have extreme experiences or peaks. So I got to
thinking that if I could generate a work
environment in which the staff could
live this kind of experiences, I would
end up having a very high-performance
organization. It has been demonstrated
that happy employees generate happier
customers, which, in turn, leads to
growth and higher profitability for the
company.”
What kind of experiences can explain
the excellent performance levels of those
who work for Joie de Vivre? “We offer to
let them enjoy the rooms free of charge
a couple of nights every three months.
It’s a simple thing, but very few hotels
do it. We also have the biggest Spa in
San Francisco, the Kabuki, and they’re
welcome to use it for half price. We also
give them a month of paid vacation
every three years.” It was thanks to this
human resources policy that Joie de
Vivre was able to not only recover, but to
triple its annual revenues between 2001
and 2008.
From CEO to Emotional Chief
“We’re living in an age that demands
that we not only be executive bosses,
but also emotional bosses,” says Conley.
And four years ago, after more than two
decades at the head of the company,
he decided it was time for a change. “I
realized that I no longer wanted to be
CEO. Two years later, I sold the majority
share package of the company and
went through a period of transition—
from CEO to emotional chief. I still stay
in very close contact. I still own part of
it, but I’m no longer involved in the day
to day.” The Joie de Vivre chain was
acquired by Geolo Capital, and in October of 2011, it merged with Thompson
Hotels, one of whose founders became
CEO of the new company.
Be that as it may, the firm’s culture
in this new stage is just as vibrant and
enthusiastic as the one promoted by its
creator. “A company has the culture it deserves,” says Conley. “If the leaders think
of their employees as untrustworthy,
the employees won’t be trusting either,
and this will generate an atmosphere
of friction. And at the end of the day,
the one who feels this discontent is the
customer. My strategy is long term. I call
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5.
ENTREPRENEURS
Emotional Equations
In 2008, even as he was giving talks about the importance
of self-realization and while he continued to open new
hotels, Chip Conley’s discontent was increasing more all
the time. A number of personal tragedies plagued him—the
end of a long love relationship, his son’s going to prison “for
something he didn’t do,” the suicides of five close friends—
and these things together with the economic crisis that
shook the United States drove him into deep depression.
“After twenty years at the helm of the company I’d founded,” Conley recalls. “I felt there was no room for creativity.
My duties had become bureaucratic and, besides, I’d had
a health problem that almost killed me. It was like divine
intervention. A wake-up call telling me I was on Earth to do
something more.”
At that time of anxiety and desperation, when “everything
that could go wrong went wrong,” another “Jewish psychologist” (besides Maslow) offered him the tools he needed to
get his head above water again. He found himself reading
Man’s Search for Meaning, by Victor Frankl, who, in that book,
posits that the best motivator is to find the meaning in things.
Based on that idea, Conley worked out an equation that he
repeated every day: “Desperation equals suffering minus
meaning.” Since suffering, according to Buddhism, is a constant in life, Conley started considering meaning a variable,
and concentrated on increasing the meaning in his life as a
means of minimizing desperation. “What can I learn from this
situation?” he asked himself constantly.
Parallel to this, he decided to enter into the study of emotions. He traveled with a United Nations delegation to Bhutan, a small country located between India and China. There,
King Jigme Singye Wangchuck, who governed the country
it ‘karmic capitalism’, because karma lasts
all your life, and I think the same is true
of reputation.”
Without a doubt, it was worth waiting for the results of that strategy: In
2011, for the sixth consecutive year, the
San Francisco Business Times and the
Silicon Valley/San José Business Journal
distinguished Joie de Vivre as one of
the ten best companies to work for in
the San Francisco Bay Area. Also in 2011,
Market Metrix ranked it number one in
customer service, surpassing Marriott, Hilton, Hyatt and Sheraton, among
other hotel chains.
But Conley isn’t the type of man
to rest on his laurels, and he is always
making an effort to go beyond his own
limits. “The business world has a funda-
6. june-july 2012
from 1972 through 2006, had coined the term “Gross Domestic Happiness”—as opposed to the Gross Domestic Product—
used to define the development model for the country, and
which was the bottom line for cultural and social awareness,
as summarized in three values: happiness, gender equality
and preservation of the environment. “I met with the prime
minister,” Conley recalls, “and came back with an equation for
happiness: Happiness equals wanting what you have, divided
by having what you want. In other words, the gratitude you
feel for what you have over the search for what you want to
have. There’s nothing wrong with setting goals and trying to
reach them,” he adds, “as long as we balance that with what
we already have, feel thankful for that, and show it.”
And so it was that more emotional equations took shape:
the anxiety equation, the happiness equation, the regret
equation, the curiosity equation. These formulas, which have
an academic basis, helped Conley understand and articulate
what was happening to him inside, and to focus on the variables he could cope with, instead of continuously struggling
with the constants over which he had no control, such as the
economic crisis or death.
His 2012 book, Emotional Equations, is on the New York
Times bestseller list and has numerous followers. Among
these is Management Professor Robert Sutton, who says: “I’m
not sure I’ve ever seen another book like this in my life. When
I started reading it, I couldn’t figure out whether it was a
self-help manual or a business manual. By the end, I realized
it was both. And in Chip’s case, the key to his success as a
leader and mentor is that he has been able to cope with his
emotions and channel them properly.”
mental role to play in society,” he says.
“We’ve been distinguished for our strong
policy on respect for the environment
and for helping the communities where
our hotels are. One of the criteria when
it comes to evaluating general managers, for example, isn’t just measuring
how much money their hotel operations
generated, but also, how much they
donated to non-profit organizations.”
Beyond the successes he has accumulated and the personal satisfactions
he has had, Conley likes to consider
himself a rebel. And whenever he feels
that his life is getting too dull, he likes
to go back to his roots, find something
that makes sense, and advance. “All
entrepreneurs have to be aware of the
vehicle that their company implies
for them. A company can be a means
of making money, achieving fame or
changing the world. My goal was to
create opportunities to celebrate life,
bearing in mind both customers and
employees.” Mission accomplished. z
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Francisca Pouiller forms part of the WOBI Multimedia Contents production team.