What is Maslow’s Hierarchy of Needs, and how does it apply to business risks? In this episode, we will discuss why this powerful tool can help you understand the motivations of your employees and customers.
WWB 012: Maslow’s Hierarchy of Needs [Podcast]
07/02/2020 – 22 minutes 36 seconds
Highlights and Take-Aways
You may have heard of the “Hierarchy of Human Needs,” which was developed by a psychologist named Dr. Abraham Maslow in 1943. He believed that all of us are motivated by 5 types of things, and that each need must be met before moving onto the next—thus, the hierarchy.
Keep reading to find out what the 5 levels are, how you can apply this theory in your business to motivate employees, and how to create an environment in which your customers really want to buy from you.
Overview of Maslow’s Hierarchy
The Hierarchy of Needs is typically shown as a pyramid with five levels.
The bottom level includes our basic survival needs such as breathing, food, water, sleep, and homeostasis.
This includes physical security, employment or financial resources, family safety, good health, and protecting your property.
Also called Social Belonging or Love, this level includes things like friendship, family bonds, intimacy, colleagues, and membership in clubs, religious groups, or social circles.
This includes the need to be recognized, acknowledged for our abilities, and achieving goals. Dr. Maslow designated two levels for Esteem. The lower level included status, fame, and attention; and the higher level included competence, mastery, and independence.
The top level of the Hierarchy of Needs is the fulfillment of our ideals, the ability to be creative and make art and music. It can include discussions about morality, solving problems, overcoming prejudice, and achieving goals beyond our normal limitations.
Where Did It Come From?
The history of this tool is interesting. Dr. Maslow first came up with this concept as levels that must be met in order to move up to ascending ones. So if your physiological needs aren’t met with a lack of food, water, shelter, clothing, or sleep, you can’t move up to the higher levels (Safety, Belonging, Esteem, Self-Actualization). But as we all learn if we have young children and experience a lack of sleep, or if you’ve gone without food or shelter, it is possible to move into other levels regardless of whether previous ones have been achieved.
Dr. Maslow later made adjustments to his original concept. He believed that the first two levels—Physiological and Safety—were Basic needs. He labeled the Belonging and Esteem as Psychological needs; and Self-Actualization was Self-Fulfillment or Transcendence—the belief that we can go beyond ourselves. This includes altruism, spirituality, and reaching an infinite and holistic level of human consciousness. (Source: Reason and Meaning)
We can also divide the Hierarchy into two sections. The first 4 levels (Physiological, Safety, Belonging, and Esteem) can be group into what Dr. Maslow called Deficiency Needs. He believed we are less motivated as these needs are met. But the top level (Self-Actualization) increases our motivation as it is met. So basically, we are more interested in achieving self-awareness and having a creative outlet as we achieve deeper understanding of ourselves.
Criticisms of the Hierarchy
Before we discuss how the theory of human needs applies to decision-making, I want to explain a couple of criticisms. The first is that it may not be as relevant in collectivist societies, where social and intellectual needs are not rewarded, or where the need for independent thought and individualistic choice is less important than the needs of the group.
Another criticism is the popular belief that this Hierarchy demonstrates that Esteem and Self-Actualization are only possible if the first 3 levels are fully met. Because of the complexity of the human experience, it’s not always possible to fully meet every previous level first; and it may not be necessary.
This image by Reality of Design shows the overlap between categories:
As you become more aware of the needs of your customers and employees, you will be better able to make decisions that are risk intelligent.
Applying the Hierarchy of Needs
That’s a very short summary of what Maslow’s Hierarchy is all about. But how do we apply it to business decision-making?
As I have discussed in previous episodes, risk management is complex but also fairly straightforward process of evaluating every possible way that things can go wrong, and recognizing the signals that something is going wrong before it causes harm. Risk management tools can help you create a plan to mitigate negative outcomes and identify advantages.
One of the best tools is with a feedback method, especially from Devil’s Advocate and Foundational Staff. I discussed this in episode 7 (Honeybee, Scorpion, and Nuclear Employees) and in episode 9 (Who are Your Devil’s Advocates?)
We can use these tools to understand how people are motivated. When Why do some employees choose to break your company rules? What makes them quit without warning? Why do customers refuse to follow your process? Why aren’t they satisfied with your services and products? Going back to the Hierarchy of Needs can help answer these questions.
I once taught a course called “How to Handle Difficult Patients.” One of the concepts in my course, and one that really helped me while I was working in healthcare management, is to consider which areas of the Hierarchy of Needs aren’t being fulfilled when a person is dissatisfied.
Evaluating Customer Needs: An Example
Let’s use an example. A customer named James comes into your store, and he’s very upset. He has ordered something, and there was something wrong with it (wrong size, delivered late, didn’t fulfill his expectations). He is frustrated, and he demands a refund. The first thing your staff would try to do is apologize and try to “right the wrong.” You probably have a process for how this should happen; so you’ll go through steps to remedy the customer’s unhappiness by trying to understand how it happened, how to correct it, and what would make customer feel satisfied.
But let’s say that James isn’t willing to let the matter go. He’s not interested in just getting a refund, he also wants to keep arguing. What James may not be saying is that he is intent on making sure that other customers don’t go through the same experience, and he is attempting to call attention to a broken process (the Honeybee or possibly Scorpion type of customer).
At this point, the challenge is to fully understand hidden motivations that may not be obvious, and to create an experience where the customer experience is positive. Even if she or he is unreasonable in the moment, the customer may be attempting to communicate a need that can be resolved to their satisfaction. Whether or not the problem originated with factors you and your company can control, customers will remember the experience; and they will blame your company if they don’t perceive that you have properly responded to the problem.
The concept of customer satisfaction is demonstrated in Dr. Fredrick Herzberg’s Motivation-Hygiene Theory. Getting a sense of the psychological and environmental factors behind why people make decisions can help you to develop systems to fulfill needs and decrease the risk of meltdowns—of being blamed unnecessarily, or named in an angry Twitter or Facebook post, or with word-of-mouth warnings that your company is unreasonable, unethical, and unfriendly toward customers.
Needs, Fears, and Feelings
We can understand this more fully by understanding basic fears (which I’ll get into in the next episode) as well as the feelings behind each of the 5 Needs.
Here is a combination of Maslow’s Hierarchy of Needs with the 5 Basic Fears and associated Feelings.
Let’s explore each of these levels more closely. Starting at the bottom of the pyramid:
The feeling behind this is
“I will cease to exist.”
They fear extinction and not being able to survive, such as having enough food, water, and oxygen; the tools for survival; shelter; and the absence of pain.
Behind this is the feeling that
“I’ll be invaded.”
The associated fear is Mutilation, or things hurting us outside our control. It can include attacks by others, bugs crawling on us, or medical trauma where things happen without your consent.
Safety can include:
- Physical safety
- Emotional safety
- Financial safety
- Good health
- Protection from illness, accidents, and other threats
Trauma is experienced by 70% of all humans at least once in their lifetime; and 30% have gone through 4 or more traumatic events (source: Journal of Psychological Medicine).
Trauma occurs in a number of situations, including:
- Domestic violence
- Transgenerational trauma
- Childhood abuse
- Institutional racism
- Food insecurity
- Economic crisis
Even one traumatic experience can lead to Post-Traumatic Stress Disorder (PTSD), where decision-making is impaired because of an inability for the brain to process information and recognize safety, even if the situation normalized. This is an important aspect to consider when you’re trying to understand why your employees or customers make decisions that don’t make sense to you. They may feel a lack of safety even if the situation appears fine.
From a risk management point of view, your sales process should take into consideration how people will feel safe when they buy services or products from your business. We make decisions based on our perception of the world; and when that is affected by past trauma, our decisions can be based in a fear response. Companies that understand this impact on their customers’ decisions, and even their employees’ actions, are more likely to design an effective work environment and buying experience. By considering how others perceive your company, you can develop a strong brand and culture.
The feeling here is
“I’ll get rejected! I won’t belong. I’ll be kicked out.”
Behind our need for Belonging is the fear is Separation.
In this need, people desire to not feel neglected or ostracized. In your business, you can develop a supportive environment where you communicate an understanding of the pain your Ideal Customers experience and how your company can solve the problem. You can bridge the gap between their pain point and need to belong to a group, and the solution you offer.
This is a trick that many business owners use, but some of them do it in a detrimental way. Episode 5, Which Business Models are Predatory, I talked about how some companies take advantage of people because the model leads to destructive behavior. Consider attracting customers by demonstrating the value you can provide.
In this need, we may think
“I’ll be humiliated. They will make fun of me. I’ll be found out as a fraud. I won’t be recognized for my accomplishments!”
The need for Esteem means that we strive to be seen. The main fear is Ego Death, which means that our belief in ourselves will be taken away. We all have want people to notice what we contribute, and also to be recognized for who we are. This includes the need to be recognized, acknowledged for our abilities, and achieving goals.
Dr. Maslow designated two levels for Esteem. The lower level included status, fame, and attention; and the higher level included competence, mastery, and independence.
It’s really nice when companies really listen to their customers’ needs and make sure she or he gets the most value from their purchase. Consider how you can “see” your customers more clearly.
The top level of the Hierarchy of Needs is the fulfillment of our ideals, the ability to be creative and make art and music.
Our fear is
“I won’t be myself.”
At its core, we’re afraid of a loss of autonomy—the need to be separate and independent.
Self-Actualization can also include discussions about morality, solving problems, overcoming prejudice, and achieving goals beyond our normal limitations.
Again, this may apply differently, depending on whether your society is more collectivist rather than individualistic. Yet we all need the freedom to think our own thoughts and to be autonomous in the choice to do things. We shouldn’t be forced into decisions.
When customers find your products or services, they don’t want to feel forced into making a purchase. They want to consider all options, but of course you’ll want them to buy yours. So the trick is to create a solution that makes it obvious their situation will be improved.
Motivating Employees By Understanding Needs
We’ve just reviewed Maslow’s Hierarchy of Needs:
When trying to motivate your employees, the best thing you can do is consider how each of these needs affect their decisions. If your staff are routinely leaving early or coming in late despite a clear policy for punctuality, there is something going behind the scenes.
Employees who don’t follow rules are motivated by some internal or outside force that benefits them in some way. Rather than swift punishment, it might be good to analyze the motivations behind the choices.
Rules that aren’t being followed by a significant percentage indicates that there are unmet needs. Maybe your expectations for a strict clock-in/clock-out policy is too strict. Maybe your employees have appointments or family members they care for, and the current schedule is too rigid. There could be many reasons why people go against your policies and procedures, so examining their motivations and needs can be really helpful. Then you can make adjustments for better outcomes.
Humans are complicated. Your employees have so much more to offer than just the tasks they are assigned. When given a chance, your employees can provide amazing feedback on the strategic growth opportunities in your company. It is likely they will come up with ideas that you wouldn’t otherwise hear.
Earlier, I mentioned that customers make their purchasing decisions based on the environment and culture you create, and the buying process you have set up. Without even knowing it, you may have set up some barriers that could affect customer engagement and attrition. Consider the needs of your buyers, and look for ways to adjust your customer onboarding process, marketing and sales methods, and your customer management process (how you meet their needs after the purchase is complete). Keeping customers engaged is cheaper and more effective than trying to acquire new customers later.
I hope you have enjoyed this overview of Maslow’s Hierarchy. If you have a question you’d like answered on an upcoming show, record your message at https://anchor.fm/laconteconsulting/message
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