Erik Jaques meets Chip Conley, executive chairman and chief creative officer, Joie de Vivre Hospitality
Back in 2001, Chip Conley, the CEO of the idiosyncratic – and highly successful – San Francisco boutique hotel chain Joie de Vivre, cut a forlorn figure.
Trouble was brewing; the dot com hangover throb was proving difficult to shake off, the business-bruising fallout of 9/11 and its war-triggering aftermath, the onset of a recession. Things were not looking good. In fact, Conley now admits, Joie de Vivre was well on course for potential oblivion.
Struggling to keep the overbearing sense of dread at bay, Conley sought refuge in a bookstore – maybe a pile of palliative self-help books could help? Putting aside his diffidence for a moment, he picked up a volume of the writings of the 20th-century American psychologist Abraham Maslow. Conley has not looked back since.
Physiology, safety, love and belonging, esteem, self-actualization, self-transcendence – what if the pyramidal ‘hierarchy of needs’ concept could be thoroughly transplanted to a business model, he wondered. What if this motivation-stoking philosophy could be applied to the higher needs of employees, customers and investors?
Since asking, and acting, on those questions, Joie de Vivre Hospitality (the parent company for all aspects of the business) has evolved into a 3,500-man operation presiding over 30 hotels (making it the second largest boutique chain in California and the second largest in America), 20 restaurants and five spas.
Annual revenue stands at around $240M, and there are aggressive expansion plans on the horizon – particularly since Hyatt scion John Pritzker’s Geolo Capital gained a majority stake in June 2010 (a move that saw Conley move to the post of executive chairman and chief creative officer).
Reportedly Geolo has established an investment fund of between $300M to $500M over the next five years. New hotels have already been earmarked outside the traditional Golden State comfort zone to take in Chicago, Phoenix and Manhattan. There is talk of going global.
Meanwhile, Conley has emerged as something of a guru for transformational, motivational business insight, channelling his thoughts into a series of best-selling books, the most famous being Peak: How Great Companies Get their Mojo from Maslow (the most vocal descendant of his bookstore epiphany). He certainly looks and sounds the part with his close-cropped hair, sculpted soul patch and a disposition sunnier than his home State.
“It is all about understanding people,” Conley explains.
“People’s basic motivation at the bottom of the pyramid basically is money – make enough to make a living. That’s not the primary reason people leave their job. They leave because they do not feel recognized.
“I’m a big believer in the idea that the goal of a leader is to focus on the highest needs of your employees, your customers, your investors and to really understand what those needs are.”
For Joie de Vivre staff this means taking on responsibilities and ownership. This means all staff come together each year and contribute to the hotel chain’s strategy in a “significant” and “intimate” way. It means there are cultural ambassadors who help define the hotel’s mien and feel.
Among its initiatives are an overt welcoming of lesbian, gay, bi and transgender couples (Conley himself is out and proud), more dog-friendly hotels than any other hotel group and a slew of benevolent charity programmes.
There is also an uncompromising approach to environmental awareness: the Green Dreams programme, which has been a company touchstone from the very beginning.
“People who are 40 or younger just expect you to be sustainable in your business practices. It is becoming an essential part of what people expect from you. And that’s true of the employees too,” says Conley.
“It creates more of an emotional response from the customer and they respect it.”
Conley’s emotive approach is unabashedly pitched as “service from the heart”. “If I’m getting it right I am channelling a message that is bigger than me,” Conley elaborates.
“The most poignant message I have is that the most neglected fact in business is that we’re all human and it is very easy to forget that. I like to remind people of that.”
If it all sounds a bit hippie-ish and touchy-feely then, well, that is because it is. But then Conley has rarely tended towards the conventional.
Fascinated by Walt Disney (and growing up in the shadow of Disneyland itself), he has always been interested in the notion of creating “immersive worlds”.
Outside of work he counts artists, writers and “crazy weird people” as his friends and instead of a stoic executive-friendly round of golf he is more likely to be getting freaky at offbeat events like the Burning Man Festival, which he attends every year. Unfettered expression is clearly a key part of the Conley business mantra.
“Creativity is essential,” he argues. “Innovation is just a form of curiosity and creativity. Being able to be innovative comes from a fountain of curiosity and creativity. It means that you sometimes have to be willing to make mistakes. It means you have to ask the questions other people aren’t asking.”
Conley didn’t start out in the hotel industry. After gaining an MBA from Stanford he ventured into the world of commercial real estate developments on behalf of Morgan Stanley in New York, though he was quickly disillusioned. He grimly recalls this period of his life as “more of a job than a calling”.
The upside was that he learned how to buy and sell things and, most importantly, how to renovate buildings.
In 1987, at the age of 26, he bought his first hotel – a run-down, by-the-hour “no-tell motel” in San Francisco’s Tenderloin District. As he set about getting rid of the stench of vice and mould, he alighted on a novel design concept: apply the model of magazine publishing to the hotel industry.
Good magazines have strong voices, are lifestyle oriented and communicate directly to their readership. They can transport people from the mundanity of everyday life. A hotel, he surmised, could and should do the same.
To wit, the grubby motel became the now-legendary Phoenix, a rock’n’roll joint based on the ethos of the Rolling Stones. Each Joie de Vivre local followed the same template, taking initiation inspiration from a publication and aspiring to meet five words that define its personality.
For example, the Vitale in the Embarcadero section of San Francisco, which became the first new hotel in the State post-9/11 – is an amalgam of Dwell and Real Simple and predicated on design principles that evoke a sense of the “modern, urbane, fresh, natural and nurturing”.
Other notable hotels in the portfolio include the Avante in Silicon Valley, which is annexed by Google for 12,000 goodnights a year (Conley quips they should just buy the place).
“Our hotel experience is about identity refreshment,” Conley enthuses.
“When somebody goes there it feels like the hotel is a reflection or extension of who they are on an aspirational basis. If a boutique hotel gets it right the words you’d use to describe it would be words you’d use to describe yourself on a good day. You are what you eat. We are where you sleep.”
The ability to broadcast a strong, distinctive voice has helped Joie de Vivre combat the bane of the hospitality industry – big commission-grabbing websites like Expedia or Travelocity. As a result, the company’s hugely interactive website is more than just a sterile shop window, and includes neat features like personality tests and Yvette and virtual hotel “matchmaker”.
While Joie de Vivre has not been entirely immune from the most recent recession – 5% of the staff had to be laid off, largely due to the downturn coinciding with a series of capital-intensive hotel launches, Conley remains characteristically bullish about the future.
“I love doing things that haven’t been done before,” he says.
“I love creating new ideas for hotels that haven’t been done before. I love making people happy.
“I love writing about this stuff and helping create a movement – what I call karmic capitalism. What goes around comes around in business.”