MASLOW'S HIERARCHY OF NEEDS
A business model to understand a company’s position and customers’ motivations
Abraham Maslow, an American psychologist, published his theory of human motivation in a paper in 1943. He focused on the human potential rather than the negative emotions and believed that behavior isn’t driven by external forces but rather internal ones which motivate us to do better and improve. His model is based on aspiration and a desire to improve.
Maslow’s theory of needs is based on five sequential levels. It is based on the theory that you have to move past one level of the pyramid before you can move to the next one.
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The most basic needs, those that sit at the bottom of the pyramid, are required for our physiological functioning. These are the need to eat, drink, have sex, stay warm, and sleep.
Once our basic needs are met, there is a desire for personal safety including health and well-being. Financial security is also part of this need.
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When we feel safe and secure, we are in a position to seek love, friendship and company. This is a tribal instinct; a need to belong. It is why people feel patriotic, join clubs and support sports teams.
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Moving up through the pyramid there is now a search for social recognition, status and respect. These are the values of esteem and they give a person a sense of value. There are two levels of esteem. A lower level yearns for respect from other people and could come from a desire for status and recognition. A higher level of esteem and self-confidence comes from an inner strength that follows the mastering of a skill.
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At the top of the hierarchy is self-actualisation. This is achieved when people reach their full potential. It is a poet and their poetry. It is an artist who is feted. At this level a person has achieved everything they are capable of achieving. Maslow claimed that only 2% of the population reach this level.
Consultants and business writers have embraced Maslow’s model and modified it to relate to organizations rather than individuals. The following diagram shows a pyramid developed by B2B International reflecting the hierarchical needs of businesses. It suggests that the needs of a company vary (as with humans) from survival to self actualisation and are dealt with by different departments within a company.
Maslow's hierarchy of needs is relevant to businesses in building a strong workforce. If all a company does is offer its workforce basic "survival" needs such as a salary and a place to hang their jacket, they will soon lose staff. Using Maslow's hierarchy a HR department could strengthen workforce engagement through encouraging staff to take part in social events. Awards to staff for good customer service could provide recognition and help build employee loyalty.
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In the same way, the hierarchy can be used to satisfy customers' needs. Offering a basic product is not enough. Customers want to feel they are in a relationship with their suppliers and that their importance is recognised. In many respects this is similar to Kotler's five product levels which starts with a core product and moves through various augmentations to arrive at a product with a strong brand aura.