Giving Intangible Experiences In Hospitality with Chip Conley | Ep. 160

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Giving Intangible Experiences In Hospitality with Chip Conley

On this episode, we are in for a treat as I’m thrilled to welcome one of my biggest mentors from afar. The one and only, Chip Conley. Chip has a storied career in the hospitality industry and he’s disrupted the hotel industry twice in his career. First, with his company Joie de Vivre that he founded at the age of 26 and turned into the second largest boutique hotel brand in the world. Then later when he joined Airbnb as the Head of Global Hospitality and Strategy. Chip is a bestselling author of Emotional Equations, The Rebel Rules and Peak: How Great Companies Get Their Mojo from Maslow. The latter which dramatically changed my perception of what matters most in business. His latest book, Wisdom at Work is a game changer. Chip, your wisdom has made a huge impact on my life and I’m honored to have you on the show.

Jesse, I’m proud to be with the man in yellow.

You’ve done a lot in the industry and there are so many comparisons between the baseball industry and the experience that we create for fans and also, what you create for guests that come into hotels. At 26 years old, you started this boutique hotel and you became a self-proclaimed rebel. Can you share what you did and how you built it to be different than your typical hotel brands?

Starting with the name of the company. It’s a very fractured challenging name. It’s a French phrase for the joy of life and one of my beliefs when I started the company at age 26 is that our name should also be the mission. The mission of our company was to create a joy of life for our employees and our customers. For 24 years, that’s what we did with me as the Founder and CEO. We created 52 boutique hotels. The hotel industry is like many other industries. The initial approach to how hotels focused on what the customer needed was at the bottom of Maslow’s pyramid. Let’s get the basics. Make sure it’s clean and predictable and comfortable bed and it feels safe, etc. The Marriotts and the Hiltons of the world had never been introduced to Maslow. I had never imagined that their guest wanted something more than just the predictability and in fact, they wanted that experience. Eleven years after I started Joie de Vivre a book called The Experience Economy came out by Pine and Gilmore. They gave a bunch of words and it helped to take what was in my mind but put it into words in the form of a book.

The basic premise is that over time the key differentiator for any business, especially if you’re in the service industry, is not getting the basics right. That’s the ground rules or the penny ante stuff you have to do just to be at the table. What differentiates things is the experience, the intangible stuff that is at the top of the pyramid in my book, Peak. Whether that’s the employee side of things and it’s moving employee at the pyramid from money to recognition to meaning. Whether it’s on the customer side and moving customer off the pyramid from meeting their expectations to their desires to even their unrecognized needs. What I got quickly was that the hotels where we were most effective and most successful were the ones that were delivering on unique intangible experiences that people could never have gotten at Marriott or Hilton. That’s what made Joie de Vivre a successful company.

We map the experience in our ballparks and we have our parking penguins. People dressed up as penguins parking the cars. Then we have our players out greeting the fans and we have a pep band. We try to map the entire experience and how they come into our ballpark and how they leave. You had very unique ideas with your hotels. Could you share a little bit of the mapping experience on how you did that?

My first hotel is 26 years old. It’s a broken-down motel in a bad part of San Francisco. I knew that the customer we were going to go after were creative artists, maybe musicians, film crews and people like that. The first time we had a meeting to talk about it was at this 1950s motel that was a pay by the hour motel with full prostitutes. I was like, “That’s not the market we’re going to go after.” It’s a place called the Phoenix. The first meeting didn’t go very well. Our leadership team had no idea. There was no sense of unity around what we were trying to create. For the second meeting, I asked everybody to show up with a magazine that defined the personality of this hotel. I don’t know why I came up with it. In the moment I said, “We’ve got to find a way to align ourselves.” Boutique hotels and magazines have a lot in common. They’re very niche-oriented and lifestyle-oriented. The next meeting, seven people came to the meeting and five of them came with a Rolling Stone magazine. All of a sudden, I was like, “That’s interesting.” Even though at the first meeting we were all at odds, the second meeting somehow there was a bit of unity that was brought there. We said, “Each time we create a hotel, let’s imagine a magazine that’s the touchstone for the personality of the soul of that hotel.” That comes up with five adjectives that define that magazine that can also apply to the hotel.

The first hotel, the Phoenix, based upon the Rolling Stone magazine, was funky, irreverent, adventurous, cool and young at heart. Everything we did in creating that hotel had to come back to those five adjectives. It could be the guest rooms. It could be the unique services we offer. It can be the funky, irreverent staff at the front desk of the hotel. It can be the hotel restaurant or the bar, etc. This is a beautiful way for 52 boutique hotels for each one of them to have a unique personality. The magic of this was not so much that it helped us create a very holistic concept for a hotel. What we came to realize is that people who fell in love with the hotel, were people who would use those five adjectives to describe themselves on a good day.

In essence, we were not just in the hotel business, we were in the identity refreshment business because the people who love the Phoenix were people who thought of themselves as funky, irreverent and adventurous. By staying at that hotel, it allowed those words to rub off on them and they thought they were more aspirationally living in those words. Not all of our hotels are Rolling Stone magazine. We only have one that’s a Rolling Stone magazine. We have hotels that are based upon a Surfing Magazine or the New Yorker Magazine. We have one in San Francisco which is real simple meets Dwell magazine. Each time it was a different magazine and five adjectives and a different core psychographic of people we are going after. It’s part of the reason we became so successful.

It’s amazing because you said the identity business based on your 52 total hotels at one point. You’re probably hitting most of the identities. I think about entrepreneurs and even myself in a sense that we all often try to be everything to everyone. We’re a ballpark. We are a rebel. We do things different. We break the rules but then that will turn away a lot of people. Have you seen when working with other companies when you are speaking around the country, are they able to all find this magazine or are this specific identity and adjectives that fit their brand or who they’re going after?

It varies. There are some brands out there that have a singular concept and then just replicate it over and over again and that’s fine. There’s nothing wrong with that. It’s a lot simpler to do it that way but I do think that the larger you get, the more you can’t be as niche-oriented. I do know that the concept behind my book, Peak, with the subtitle being How Great Companies Get Their Mojo from Maslow. That’s Maslow’s Hierarchy of Needs, the famous psychology theory. That book has been a hit across all industries all continents and I’ve spoken at about any kind of conference. It does suggest that the premise of having a hierarchy of priorities of what an employee or a customer is looking for is true across almost all businesses.

I do want to get into the hierarchies and your experience with Airbnb. Something I noticed about you is you have this above and beyond mindset. The first book I read that had a suggested reading at the end of each chapter, which I did add to my book. I thought that was brilliant and then in Wisdom at Work, pages of resources. It seems that you’re always trying to add value and I’m sure you learn and develop this when you were working the hotel business. How do you develop this above and beyond mindset or what did you see in your own life to do this with everything?

It comes down to how do you cultivate and harvest empathy for your customer. Let’s speak about my books. Rather than having in the back of the book a bibliography or something like footnotes, what I felt was that when someone finished reading a chapter, they want to know more about that subject. In the book, Peak, it was like, “These are very discrete and different chapters. A chapter on compensation for employees versus recognition versus meaning. Why not have books at the end of each chapter that addresses that?” It was empathizing with what a person is going to feel at the end of a chapter and that was pretty simple.

Similarly, in a hotel environment, how do you get inside the heart and head of your customer in such a way to understand what it is that’s most on their mind. We would do exercises with our employees on this. We’d say, “Within the first five minutes that a guest arrives at our hotel, what are the variety of conflicting messages that they have that say, ‘Yes, I made a good decision by staying here or no I didn’t?”’ Then by going through that exercise with our employees and then bringing customers into the room after doing that exercise and having them tell us, helped us to get our employees to a place where they were actually coming up with most of the innovations in the company. It was not me because they were the ones who could see in real time what customers were struggling with or delighted by.

What do you mean by conflicting messages?

The first hotel Phoenix was in a tough neighborhood and I’ve owned it now for many years. When you arrive, one message can be like, “I picked the wrong neighborhood or I don’t feel safe or I feel worn out just getting here.” Those are some of the negative messages. On the other hand, the positive message could be, “I feel like I’ve come home because the staff here is incredibly friendly. Some of the hotels have a more formal approach to service and this is definitely not that.” On the wall in the lobby are all these cool Phoenix t-shirts and Phoenix mugs and all kinds of interesting stuff. Literally, an adult coloring book that tells the history of the place that’s like, “This place is more fun.”

All of a sudden that’s the confronting message on the positive side. It was like, “Yes, I am certain this is almost this oasis of creativity in the middle of a war zone.” What that means for the staff is to be really clear about how to help these customers understand how to negotiate, where to go in the neighborhood, and where not to go so that they can get their basic safety needs met and then talk about what’s going on within this one acre of paradise which is what the hotel is. People can say, “Outside the doors of the hotel, the hotel can’t do much to fix all that, but what they can do is create this cool crossroads of a creative.” We have swimming pool, a cool poolside café, bar, restaurant and different arts from different artists in San Francisco in every single room. There’s an element that once you get over your initial resistance, then you are able to get to the next level of the pyramid.

When you’re getting people to come to your places, we think of the feeling of escape. It’s an escape that they’re getting out of their regular world. It’s like you’re creating this on every single attention to detail. I love The Experience Economy by Joseph Pine, but I also think now we’re in the emotion economy. How often do you teach or work with people on how you make people feel? Is there a practical exercise that teaches like you are focusing on the feelings? Something that we’ve created is we think about happy tears. I had a young eight-year-old kid, Cameron. I gave him a signed bat and he was going nuts and started crying. He said, “Don’t worry, these are happy tears. This is the best day of my life.” We think about that emotion. When you get happy tears, is there anything more powerful than that? It’s tough to teach. I wonder how much does emotion play into teaching hospitality?

I loved back in the day when I was actively involved running the business that we would have Joie de Vivre University. We taught all kinds of classes for our employees. One of the classes that we taught was about understanding the customer. An element to that was helping our employees talk about an experience that brought happy tears to them, “Tell us about an experience you had where you were blown away by how a business made you feel? What happened? How did you feel? What was your level of loyalty afterward?” Similarly, talk about an experience where a company or a business you’re doing business with or buying from infuriated you. It made you angry. By letting your employees, go through their experience of what does it mean to be a customer, it helps them build the bridge to how to be more empathetic towards your own customers.

Do you have things that come to your mind? I’m big into stories. I’m sure you taught this a lot. Stories is how you can teach a lesson. Are there any moments that come to your mind that brought tears to your eyes that you felt you were making an impact or it could be one of your employees or team members? A story that you are so proud of either at your first company or with Airbnb that brought tears to someone. It could have been yours or one of the employees.

I was in Rome, Italy with Airbnb. At Airbnb, I was in charge of a lot. One of the things I was in charge is all the hosts globally. When I was going to go stay in some hosts’ homes somewhere in the world, they knew who I was. I had done an interview with CNN the prior week. I had said, “I love Airbnb but I’m also a hotelier at night. Occasionally, I miss room service in my Airbnbs wherever I stay in the world. I love home sharing but sometimes you just want to stay at home and have the food brought to you in your room or in your apartment.” About a week later, I’m in Rome Italy, checking into a nice apartment in the middle of the city next to the Vatican.

The host, Paolo, when I arrived he said, “We can’t offer you room service, Chip. Here are some menus from some local Italian restaurants that deliver but I can offer you Rumi service.” He pulled out an Italian book of poetry by the famous Persian poet from 50 or 70 years ago, Rumi, who is the number one selling poet in the US now even though he died 50 or 70 years ago. He said, “I can’t offer you room service, but I can offer you Rumi service. This is a book of Rumi poetry in Italian. You’re welcome to take it with you.” I was like, “You did two things. Number one is you knew based from that CNN interview I did that I do miss room service and you’ve given me some actual menus of the local restaurant that will deliver. You also have done some research on me to know that I love Rumi poetry.” I’ll never forget that and of course, I talked about that a lot. It was word of mouth. Generally, the idea is what used to be voice-to-voice is now through the digital world. It can go virtual and it can go viral very quickly when somebody has a great or a bad experience.

As I heard from Darren Ross with the Magic Castle Hotel, “Listen carefully but respond creatively.” If you listen to these things, it’s how do you respond. “They got something going on this weekend.” What are you going to do to make it better? It’s a simple gesture. He didn’t go tremendously out of his way but he showed that he cared. What about the craziest thing you’ve done for a customer or something that stood out? I’ve called this segment crazy train because I think of things that are absolutely crazy. Anything that you’ve done or had your team do that’s a little over the top.

Someone had their wedding ring and a bunch of valuable things that they left in a hotel room on their way back to Hong Kong. This person was so traumatized. They’ve never traveled internationally and they left an important bag in the hotel. They took their suitcase but they forgot this bag, which frankly had family heirlooms and things that they were so scared that it would get lost. We sent an employee on a plane to Hong Kong with it to hand deliver the bag back to this guest who we had never had as a guest before. The guest did pay for the flight otherwise there are some things that don’t make a whole lot of sense.

Nordstrom is famous for the fact that if you return something into Nordstrom, they always take it. Someone returned an actual tire to Nordstrom. Nordstrom doesn’t sell tires and he said, “Will you take this?” and they said, “Sure.” That’s a folklore story that helped Nordstrom build its reputation for great service. The truth is it’s also a stupid story because Nordstrom doesn’t sell tires. They don’t want their employees taking back things. Similarly, I doubt I would have sent our employee to Hong Kong if the guest had said, “I’m not going to pay for the flight.” To basically take an employee and take three days out of their life to do the roundtrip travel to hand deliver it to this person in Hong Kong made a huge difference. It turns out that the guest was somebody who is very influential in the Asian travel market and all of a sudden that hotel ended up getting a lot more Asian guests traveling and staying at that hotel.

My staffs were all 22 to 27 years old and they said, “Jesse, I could come on stage and share the stories you share over and over again.” I was like, “Great.” That confirms our culture and who we are and what we stand for and people resonate with stories. I know you have tons of them but we’ve actually started creating a story bank. All the stories that happened every year, we call them Fans First Moments and we write them down and we record videos and interview our staff telling them. That’s how we educate our new people coming in. I’m sure you’ve done lots of that. That’s given a little preface on why I’m so fascinated by stories. We got to go into the employee experience and your turn as a mentor with Airbnb. You did it all and I’ve heard fascinating stories about Airbnb and all those events and festivals and your love for that. Going back to what you created in Peak, the pyramid of money, recognition, and meaning, share how that came full circle working at Airbnb. How do you drive people towards meaning and how did your meaning change as you went to Airbnb?

It was an interesting process to go from being a hotelier. I sold the management company and brand of Joie de Vivre in 2010 to John Pritzker, his father started Hyatt. It was a couple of years later that I joined Airbnb. I still own some real estate. I own some hotels. I am still with partners with about twenty hotels and now only nine. I’m still a hotelier while also going and becoming the mentor to the founders of Airbnb and becoming head of Global Hospitality and Strategy. What I had to get used to was the idea that in a hotel, it was our employees providing the service.

At Airbnb, it was these micro-entrepreneurs who were hosts in 191 countries. All of our hotels are in California. Most of our hotels are in Northern California. We are a very geographically-centric company so I get to know our employees well. At Airbnb, there are millions of hosts around the world and I was never going to meet them all. I couldn’t go one-on-one and they work with our employees. It is a different model but it allowed me to take the peak model that I used at Joie de Vivre and apply it to the Airbnb host. That was money, recognition and meaning. The baseline for hosts was they wanted to make sure they were well-compensated and doing well on it. For some hosts, that was not the reason they were doing it.

The reason they’re doing it is that they love the social connection they were making with their guests. That was a step above that. The meaning piece was the intrinsic motivation you get when you feel you’ve turned a stranger into a friend. What we did is we started to use the peak model and apply it to the incentives and motivations of Airbnb hosts around the world. We created the Superhost Program, which is a program that allows our best hosts in the world to feel that they’re recognized once a quarter. We did a whole question of other things to improve the peer-to-peer review system so people can feel more sense of recognition. We told stories of the relationships people were able to make by either being a guest or a host on the platform. In some, it allowed us to use humanity as the operating model for how we did business. Airbnb now is the largest hospitality company in the world.

My wife owns two Airbnb and it’s not the money, it’s the connection of relationship that she gets to talk to people. She is like, “I just made her day.” She puts our fans first mentality. She always had surprises and she listens to what they’re celebrating. She asks and she puts an extra money into it how they’re greeted when they come in. What’s the note? What are the special giveaways? The food, the drinks, the wine to celebrate. She’s had gifts delivered and that means everything to her. What you’ve been set up is a system where they get to feel it. The more the reviews, the recognition where it feels you are making a difference which then provides meaning. When you look at the Airbnb, I’d love to know what makes it special from an employee perspective. There are a few things in your wisdom and word that you shared about how everyone had to teach something. You taught about your love of festivals and people taught different things. That’s a unique thing. It’s not just teaching something in the business, it is teaching something else that you know. What are some other unique things that you did with the employees and the founders that brought the culture together?

On the culture side, we created two things. One was the Airbnb Open, which was focused on our most active Airbnb hosts in the world. Within the company, we created something called 1Airbnb, which was a every two-year event. The last time we did have 3,200 employees from around the world from 22 offices come to San Francisco and have a four-day festival of how they got re-engaged and inspired by the company’s mission. It allowed us to have all of our employees to actively be involved in looking at the strategy from moving forward. Not everybody has 22 offices around the world. Just assume you have one office and you’ve got ten people in it. The idea that you can do an offsite retreat with all of your employees, not just the three top leaders, but everybody to talk about where you’re going and what you’re doing is important. There are two kinds of meaning. There’s meaning at work and there’s meaning in work. Meaning at work means you understand the purpose of the company and you feel very inspired by it. A social enterprise or a non-profit that has a great mission could do that. At Airbnb, it was our belong anywhere message to help that idea of taking down this sense of walls and boundaries for people so they can feel across borders closer to each other.

Then there’s meaning in work. Meaning in work means that the work that you’re doing on a daily basis inspires you and you can see the connection of the work you’re doing to the overall purpose of the organization. That’s the part that’s hard. It’s one thing to get excited about meaning at work, the purpose of the business. It’s another thing to connect your daily activities so that you can see how you’re influencing things. Let me give you an example of that. When we were in the depths of the dot-com bust in the Bay Area a bunch of years ago, one of the things we noticed is that many of our employees felt disconnected from our guest and what made our guests love their hotel. We had a monthly meeting where all of our employees in the hotel would come together. We decided to end that employee meeting each month with having one or two regular hotel guests who happened to be staying in that hotel at that time, come and tell their story for five minutes about why they love the Hotel Rex or the Galleria Park Hotel. What is it about that hotel?

We would instruct the guests in advance to at least bring up two to three names of specific people in the room that has done something that has helped that guest feel like, “This is my home away from home.” The idea of employees hearing why a guest loves their hotel and some of the specific activities that helped create that loyalty is a simple way and a freeway because it didn’t cost us anything to have a guest tell the story. It’s a freeway of your employees understanding your meaning in work. Understanding of how the work they do impact the overall success of the business and its purpose.

I’m trying to think of that even with us having our fans. We have 100,000 fans come to our games every year, picking a few, maybe quarterly or it could be one big event and just having them share with the group. That’s amazing because we can talk about all the emails and the letters that we get as the owners and the founders of the company. They don’t necessarily get to feel it unless someone’s there mentioning their name. I’m fascinated with Brian Chesky. He’s a very unique individual and how he learns and goes to the source. You work directly with him for many years. What made him different from most people you worked with?

When he approached me, I was not in a place where I had to work. I was lucky enough I had sold the company and I sold it at the bottom of the recession. It wasn’t as big of a payout as it could have been if I waited three or four more years but I was ready to move on. When Brian reached out to me, I was touched by how curious he was. He had such a growth mindset. He wanted to learn. He would always go to whoever in the world he thought was the best person to learn from on that particular subject. At that time, Airbnb was perceived as being a small tech company that was fast growing. Nobody really called it the hospitality company. He wanted to look at how can he take his company and turn it from a tech company into a hospitality company. He sought me out.

More than anything, I loved the purpose of the company to trying to belong anywhere. I was impressed by how fast they are growing. I didn’t quite understand the business model completely. For me, I was still a hotel stalwart, but over the time I started to understand it especially if you’re staying for an extended stay. One of the things that people don’t understand is that, Airbnb, a large percentage of our roommates is people staying a week or longer. Often, if you are staying a week or longer, some of them are a month or longer, you don’t want to stay in a tiny little hotel room. You want to stay in a place that’s more personalized where you can live like a local and get to know people and the area better.

I would say that it was not the business plan that sold me on coming and joining Airbnb. It was Brian as a person. We spend the last years bound at the hip. Anybody who can understand the relationship between someone who’s like me, I was twenty years older than Brian. I was his mentor in-house but I also reported to Brian who was the CEO. He wants to understand what that relationship is like. There was a video from the Commonwealth Club in San Francisco where we were on stage with the moderator talking about that relationship and it’s quite eloquent in showing how that relationship across generations can work.

He’s the founder of one of the biggest and most successful companies. He can knock on doors and call Warren Buffett and get a two-hour meeting and call you and get it. With your book, Wisdom at Work, it shares the process of what you called modern elder from evolving to learning to collaborate and counseling. I’m thinking about myself and young people that maybe don’t have the name or the clout of a Brian Chesky. How would they go about finding a modern elder or a mentor to help them? What would you suggest?

Brian Chesky was not always successful. He started the company with his co-founder at the age of 26. He was going out and talking to people before Airbnb had any kind of name. Some of it is he was just being shameless. Not feeling hesitant about going or at least making to ask. Part of it also is you just feel the enthusiasm of someone. I would say for people, look to someone out there who you see is wise and you admire, who’s a role model. It’s quite often that that person’s going to be extremely busy. Differentiate yourself a little bit. Just as what you did with me. I’m a very busy person but whether it’s the videos you’ve sent me or telling me the story of your business and how you’re a storyteller. For other small entrepreneurs, all of that gives me the sense that I want to give back. I want to give back to you and then you give back to someone else’s. That’s what I call karmic capitalism. What goes around comes around.

I feel that karmic debt to the young entrepreneurs of the world partly because when I was a young entrepreneur, I reached out to getting Herb Kelleher who is one of the Cofounder and CEO of Southwest Airlines. He’s the CEO for 37 years and I would write him letters. It was like a pen pal relationship because this is way before cell phones or before computers, internet or email, etc. I would write and three or four weeks later I get a letter back from him and he was my mentor by pen pal. For many people, we realized part of our opportunity to learn how we got wise is sharing it with someone else. The best teachers are great learners.

When I get reached out to a young sports management agents or people getting in the business, I have more joy in helping and teaching them and seeing light bulbs go off than almost anything. That’s where you talk about wisdom at work. Getting to the counsel phase where you’re helping one. You probably had as much joy seeing the growth in the young entrepreneurs at Airbnb maybe than you did at Joie de Vivre.

In Joie de Vivre, I can see the value to the business in me helping to give tutelage and also becoming an incubator for entrepreneurs. In Joie de Vivre, people would come and spend four or five years with us learning the business and go out and start their own company which is great. At Airbnb, because the age difference is so much greater, I was twice the age of the average employee there, it wasn’t exactly a parent-child relationship. I don’t think any of the people I was mentoring thought of me as their parent, but what they did feel, as one person said, “You’re my FM.” I said, “What’s an FM?” “You’re my future me. I aspire to be like you when I’m in my 50s.”

Generally speaking in American society, aging is not aspirational unless you’re twelve years old maybe. As a 25-year-old or a 45-year-old, you don’t aspire to age. The idea that people can look at me now at age 58 and say, “I want to be like him.” The thing that I got out of it was not just that I was getting back, but the truth is I was feeling the sense of mutual mentorship. For example, I probably was best known at Airbnb for being what’s considered emotionally intelligent and how do you apply that into leadership skills. Of course, some of that I documented in many of my books like Peak. I was able to offer EQ but what got offered back to me by some of these Millennials who were so smart at the digital world is they gave me DQ, digital intelligence. It is almost a trade agreement, EQ for DQ. At age 52, I joined a tech company and I had zero experience in the tech world. I had to be the dumbest person in the room.

Simplicity is one of the core values of Airbnb and it’s a big thing that we believe in. If you were to simplify some advice for a young founder of a company interested in growing their people, how could you simplify that advice or mentorship?

There’s a great old statement which is, “Knowledge speaks and wisdom listens,” and the wisest animal in the forest is perceived as the owl. It’s partly because the owl has the most attuned listening skills. A lot of people think that by being wise, it means that you’re just spewing wisdom. You’re dispensing all your advice all the time. I personally found that as I’ve gotten older and wiser, sometimes it’s most important for me to listen well for what it is that this young person is looking for and needing. Not just listen to their story, but listen for their story because often there’s a theme or a thread throughout a bunch of disparate things they’re talking about. That gives you the ability to just see, what is the wisdom that you can offer back to this person? I talked about this in the book, Wisdom at Work: The Making of a Modern Elder. There are two roles of giving counsel. One is specifically performance-driven and it’s very much about specific skills. The other one’s development-driven which is speaking to facilitating awareness of them as a human, as a leader, and as a manager. Once you understand which counseling you’re giving, it helps to distinguish between whether you’re dispensing wisdom and skill and knowledge versus taking in their story and then asking good questions to them.

I’ve been grilling you some questions. You now become the host of Business Done Differently. This is flip the script. You are the host. You can ask me any question.

How did you choose yellow, first of all, and where did you get these suits made?

BrightColoredTuxedos.com, I was one of their only returning customers. That’s where I started and I bought those and now I own seven. The whole theme for us is that I believe what we’re doing is we’re putting on a show. If we’re putting on a show, we can’t be dressed like a regular person in a polo and in pants. You needed to be dressed like a showman and one of my biggest mentors is P.T. Barnum. I’ve read every book that he’s ever come out. It became who I was putting on a show and now I wear it every day. It’s my uniform. The great story you talk about culture. My staff went behind my back and got my sizings and got a tailor to custom fit a new yellow tuxedo for me and they presented it to me and said, “Jesse, I know you’re speaking around the country. We don’t want you to look like a clown anymore. Here is a better fitting yellow tuxedo.” I thank them but the reality was I still look like a clown in a yellow tuxedo but it was a very nice gesture.

It’s hard to forget. You put up a photo of you in Maverick. Helping Maverick understand my book. I put that out into the world partly because it was cute to see you and your son, but also because you look so goofy.

I’ve been called a lot of names but I believe everyone has something that makes them stand out. My book, Find Your Yellow Tux, is about amplifying yourself in finding that and standing out. I appreciate you go into the yellow. It’s what I’m known for and it’s my uniform. It’s how you show up in the world every day and I show up energy and that’s who I am. You spend so much time talking about questions and wisdom at work. I believe if you want better answers in business and life, you need to ask better questions. You shared how Eric Schmidt with Google said, “We run our company by questions, not answers.” What are some of the best questions you’re asking these days?

There is a form of asking questions called Appreciative Inquiry. The whole premise is how to use questions to open up curiosity toward interesting answers? You get the same situation, ask two different questions and completely change the energy in a room. You could say, “We’re losing market share. Who is to blame?” That could be the one path. I wouldn’t recommend that path. The second path is, “We’re losing market share. Our competitors seem to be doing better. What can we learn from them and what are some new ways we can think about the business to regain that market share?” Those are two very different approaches to how you ask a question. The first one shuts people down and it’s very focused on trying to figure out who’s to blame. Whereas the second says, “There’s a solution here. Let’s figure out how to solve this puzzle.” Questions are meant to help create discovery and create illumination that creates better conversations. I spent some time in the company and just listening to a leadership meeting. Just based on the questions that are being asked, I can tell you a lot about the culture of the company.

It’s solution-based questions and it’s not about who to blame, it’s about how to figure out the solution. Chip, some quick favorites. You’re a big festival guy, what’s your favorite festival?

I’m on the board of Burning Man. It’s hard for me to say another one.

We both read hundreds of thousands of books, but what’s a favorite book that stands out these days for you?

I’ve always loved Danny Meyer’s book, Setting the Table, which is one of the best books written about hospitalities. He is the best-known restauranteur in the US.

Favorite restaurant?

There used to be a restaurant in New York called Pure Foods. It’s a high-end healthy restaurant with a beautiful outdoor dining space in the backyard under a big tree. It was exactly what you wouldn’t expect in New York. Healthy food in a nature setting in the middle of New York. Unfortunately, it doesn’t exist anymore.

You’ve been to a lot of business conference. What is your favorite business conference? We have a lot of audience that try to learn and are curious. One that stands out for you.

I like C2 Conference, which is Creativity and Commerce in Montreal. It’s put on with Cirque du Soleil, so literally, you have a famous circus group helping to put on a business conference.

What’s one thing you’ve done to stand out in business and life?

Being a vulnerable visionary, which means that you are open to being emotionally present while at the same time the visionary piece means you are also confident. That combination works.

If you were to give advice to someone just coming up, what would you tell them to stand in business and life?

Richard Branson who wrote the foreword for my first book, The Rebel Rules, said to me, “When you’re starting a business, use the mantra, “I am the market, I am the market, I am market.” Only create a business that you would fall in love with yourself. That’s not exactly the best advice for some people because if you’re not the customer, how would you know? If you’re going to start a business, you ideally create a product that you’d fall in love with yourself.

What’s the best advice you’ve received?

That’s certainly from Herb Kelleher who said, “The customer comes second, the employee comes first.” In any service business, you’re going to start by making sure your team is completely respected and recognized. It’s hard for them to do that for your customers if they don’t feel it.

How do you want to be remembered?

I want to be remembered as somebody who proved that you can be a successful business leader but also be human at the same time.

The books, Wisdom at Work, Peak, Rebel Rules, Emotional Equations, you have made a huge impact on my life and I know thousands of other people. How else can people find out more from you?

Go to ChipConley.com and you’ll also read about my book as well as our Modern Elder Academy or on LinkedIn. I write articles occasionally so you’ll see a lot of my articles there.

Chip, thank you so much for being with us. I can’t tell you how much I enjoyed it.

Jesse, thank you.

Important Links:

• Chip Conley
• Joie de Vivre
• Emotional Equations
• The Rebel Rules
• Peak: How Great Companies Get Their Mojo from Maslow
• Wisdom at Work
• The Experience Economy
• Airbnb Open
• Commonwealth Club – Chip Conley and Brian Chesky: Modern Elders and Millennials at Work video
• Brian Chesky
• BrightColoredTuxedos.com
• Find Your Yellow Tux
• Setting the Table
• C2 Conference
• ChipConley.com
• Modern Elder Academy
• LinkedIn – Chip Conley

About Chip Conley