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Chip Conley: emotional equations for leadership in uncertain times

Written by: on  October 3, 2011

Chip Conley

EQ leadership interview with our labmate, Chip Conley: Founder of Joie de Vivre, a hotel and restaurant company with HQ in San Francisco that employs 2,500 people.

Our infatuation with Chip started last year when Andy called me up, sounding like he’d just downed a Red Bull, saying he’d found a leadership style that just vibed – one driven by our human hunger for meaning. We watched his TED talk and read his book PEAK – ‘How Great Companies Get Their Mojo From Maslow’ and decided we needed to make what he stood for the key leadership element in our periodic table of workplace elements.

Don’t let the collared shirt fool you, Chip’s an innovative rebel who, among many things, can be found speaking shirtless at Burning Man or raising millions for inner city families in the bay area. He was recently voted ‘Most innovative CEO’ in the Bay Area by The San Francisco Business Times and uses insights gleaned from Abraham Maslow and Viktor Frankl to empower his employees. This leadership style increases employee retention and morale, naturally improves customer service and lays a bedrock of trust as the company grows.

Two months ago I stopped by Chip’s buzzing San Fran office and picked his brain on the emotional equations he uses to turn bad situations positive and lead through these challenging times: 9 min vid can be viewed here if you can’t see it below.

Rough Interview Transcript:

1. How does a leader keep a workplace calm in these times of uncertainty?

 

So part of the reason why there is so much direst and anxiety in the workplace is because there is a lot of uncertainty. One of my favorite emotional equations is: Anxiety = Uncertainty x Powerlessness

anxiety = uncertainty x powerlessness

Well the number one thing I can advise people to do is to communicate. In the absence of fact or communication people have a tendency to imagine the worst – that’s what makes them anxious. Communicating, being transparent, building trust – because trust is foundational in all relationships and confidence is built on top of trust.

So first you have to build the trust, and trust requires communication. Even if you’re going to give bad news, it’s better to communicate and build trust than allowing the gaping hole of mystery.

 

2. How should a leader communicate when downsizing?

During layoffs there are two key constituencies, the people getting laid off and those staying behind. For those getting laid off, the first and foremost thing to do is to show respect. People remember two things when getting laid off:

  • a) Did the person do it in a gracious way; did they make me feel respected?
  • b) Did I get some kind of severance that gives me a sense of safety and security?

I’m a big fan of Maslow’s hierarchy of needs. The base of your pyramid needs to be secure. If you feel respected in the process of getting laid off and your basic needs are at least moderately met, it won’t be as painful.

As for those who are left behind, they need to feel that there is some level of transparency to understanding why this is happening. Is this the first of many layoffs to come? What confirmation can leaders give us that there will not be another round of layoffs in two weeks or two months? And what can we do within the organization to improve things such that layoffs are less likely in the future?

That kind of communication will help people have more power, more sense of an influence.

If Anxiety = Uncertainty x Powerlessness, the certainty comes from communication and the powerlessness can be solved by actually having people feel like they have some level of influence in the organisation to make things better.

 

3. What is the main emotional equation that helps you lead?

Wow. So there are a lot of equations. In my new book (which is coming out in January) I’ve got all kinds of equations. The one that helped me two or three years ago in the worst of times was: Despair = Suffering – Meaning

despair = suffering - meaning

Suffering is to some degree a constant in life. If you are a Buddhist, that’s a noble truth of Buddhism. If you are a CEO or a leader in a recession it’s just a part of the way things are. Suffering is ever present; meaning, on the other hand, is a variable. In this management algebra, the more meaning you give something, the less despair you have.

When you are going through really difficult times, yourself and those you work with, keep in mind that as a leader you are the emotional thermostat for the group. Where ever you set your emotions, that’s where the group is going to end up. That’s true in your family, true of a CEO, true of the leader of a country, true of a leader of a small department.

Being able to set that thermostat in the right place has a lot to do with how you find meaning in a difficult time. For me that meant asking myself almost daily, what did I learn today? In the worst of times we tend to be challenged the most and learn the most.

Winston Churchill: “When you’re going through hell, keep going” – well I’d say keep going and learn. Learn the lesson and be curious about what there is to be learned and what kind of meaning you’re going to get in the process.

 

4. How does a leader display emotional intelligence in a stressed workplace?

Let me use an example of an emotionally intelligent CEO who a couple years ago, in the worst of times, was able to help his company jump to new heights.

Alan Mulally as the CEO of Ford made a major effort to not take a bunker mentality. This is what happens when CEOs tend to be in the most stressful of times. They spend more time in their offices, behind closed doors, talking to people about how to solve things and they use lots of war metaphors. Alan Mulally did the opposite; he spent a lot of time out in the field, spent a lot of time talking about the vision of where Ford was going and he helped Ford as an organisation rise to the occasion.

I recently wrote a blog about the ten most emotionally intelligent CEOs in America (of fortune 500 companies) and he was at the top of the list. It’s partly because he’s been able to show his emotional intelligence and his ability to use emotional equations as a means of understanding how to create an environment of great psycho-hygiene, which basically means how do we as people in an organisation cleanse ourselves when we are going through difficult times. Most companies and most organisations feel like sweat boxes and there’s not a whole lot of psycho-hygiene going on.. we all know what happens when you are in a sweat box; it’s where things get smelly.

 

5. Why should leaders improve their EQ?

I was a CEO for almost 24 years and during that time I thought I had to be a superhuman in order to be a CEO and what I came to learn over time is that it wasn’t about being a superhuman, it was about being a super human. It was about understanding my emotions and the emotions of others. It’s about having good external antenna and good internal antenna.

So, why is that important that leaders are emotionally intelligent? Well Daniel Goleman, who wrote the book emotional intelligence, has shown that two thirds of the success of leaders has to do with their EQ, not their IQ or level of experience.

Secondly, Matthew Lieberman, a neuroscientist, has proven that when people are trying to make decisions at a point of emotional reactivity, when they’re most stirred up, they lose ten to fifteen points of IQ during that time. So the truth is that we get dumb when we make decisions without being thoughtful about what’s going on through us. Just labelling an emotion and turning it into an equation is one way to do that.

Finally, emotions are contagious. We know that. The flu is contagious and so is the fear. In the Petri dish of an organisation, fear spreads very quickly. So if you know emotions are contagious, and we know that 50 to 70 percent of the emotional content of how a group feels about their group has to do about how they feel about their leader, so the leader is the emotional thermostat for the group. What this says to us is that how we show up with our emotions as leaders has an enormous impact on everybody around us, and our effectiveness as a leader.

xxxx End of Transcript xxxx

We’re very proud to have Chip as one of our Labmates. You can check out more about him on ChipConley.com, follow him on twitter @ChipConley and if you would like to buy his book on Emotional Equations, you can order a copy on Amazon.

Interview by Enviable Workplace’s Filip Matous:

 

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  • Thanks for posting this Filip – really interesting. I love Chip Conley and I think quoted him in my book a couple of years back. Just one caveat I’d add on the communication issue – yes, communicate, of course! But be very careful, as a leader, how you communicate uncertainty – i.e., remain relatively strong at all time – if you are panicking, don’t say, hey everyone, I’m panicking! Instead say, things are difficult now, but they will be fine in the end. That signal of strength at all times is very important.

  • Yeah I hear you, could be scary indeed as an employee to hear the captain admitting that the ship’s goin’ down! Just as you said, admit things are difficult now and then focus on how things will get better. 

    I had a boss do that to me a few years ago when a project was not going as planned and the challenge and confidence it gave me helped me push through. However, I’ve had the opposite, a leader that didn’t admit things were going to pieces – and that made me far more nervous.

  • Laura T

    Chips book has been featured in todays Weekend Guardian, it’s been great to watch Filips video again. What an inspiring guy!