Many of you may be aware of Abraham Maslow's famous "Hierarchy of Needs" outlined in a research paper he published in 1943 titled “The Theory of Human Motivation”. It's something I only recently discovered, not having taken a psych 101 class in my brief (but glorious) collegiate career. For the uninitiated allow me to provide this brief but crude outline: the "HoN" essentially describes a pyramid consisting of several levels, with each level representing a stage of human motivation or needs. At the base level, you have basic physiological needs like food, water, shelter. Moving through the upper stages, you have higher order needs like security, self-esteem, friendship, accomplishment, and finally at the peak, "Self Actualization" or what is essentially the realization of your full human potential.

Maslow's Hierarchy of Need. Facebook is totally not even on there.

This work was a brilliant insight into human behavior in and of itself and is widely known and commented on even today. What I hadn't known was that Maslow applied this insight into the management and motivation of employees and business. Published in 1998, "Maslow on Management" was based on the man's written notes from 1961. Given that perspective, his insights as it applies to business today are truly startling in their relevance. Here are 5 gems I took away from my recent reading:

1. Enlightened Management (or “Theory Y” management) assumes people naturally tend toward Self-Actualization, that people are generally trustworthy, want to find greater meaning in their work, will naturally seek greater responsibility and accountability and naturally want to learn. Enlightened managers periodically analyze their assumptions about people, discuss and debate these assumptions in groups. These assumptions enlightened managers hold about people in general and their employees in particular, help form the organization in a very real way.

2. Enlightened economics re-defines "profit", "cost" and "price" in human-centric terms. Human potential and capability is not something that can be readily captured on a financial statement or report, yet all enterprise depends entirely on the capability of their employees and how well they work together. Managing any enterprise based solely on "base level economics" as he puts it, ignores the human factor entirely thus endangering long term performance of the company (which Maslow measures in decades if not centuries).

3. Synergy is paramount between employees and with the organization. Maslow studied the Blackfoot Indian tribe in Montana to observe highly synergistic cultures. He found some surprising commonalities with the most progressively run companies; an emphasis on generosity, perceived weakness in tribe or team members was recognized and accepted as part of the human condition, strong emphasis on personal responsibility, specific leadership roles as opposed to generally consolidated authority are some examples. Maslow also outlined management trends still very much in vogue today, such as the alignment of personal goals with goals of the organization.

4. “Theory Y” management is not only preferable, it's demonstrably more profitable. While Maslow himself never lived to experimentally prove this, Columbia University ran a study which tracked the relationship between HR practices and financial performance indicators. Over 495 companies were tracked for a period of 10 years. Below are some conclusions from the study:

1. Companies that share profits with employees have significantly better financial performance than those that do not. 
2. Companies that share information broadly and have wide intellectual involvement performed significantly ahead of autocratically run companies (AKA “Theory X” style management). 
3. Flexible work arrangements contributed to financial success.

5. Quality of Complaints: "The health or development of an organization can in theory can be judged by the rating of grumbles or complaints which it receives". That's just smack-me-in-the-face brilliant. He elaborates, saying that complaints in an organization will never stop, and indeed in a healthy organization that this is evidence of its employees higher order needs being fulfilled. Imagine at Google somewhere, some one is complaining about the freshness of the sushi in the cafeteria. Imagine how many things had to go right before that one thing could go wrong? This complaint about the sushi can and must be taken as positive feedback on all the other base and higher order needs of the employee being met I.e. His work is satisfying, he feels his wage is sufficient etc. - it's just the sushi! We should all have such problems...

I'm sure all the above sounds like some far out, Silicon Valley, dot com, bean bag type company to some, perhaps many of you out there. I for one can practically hearmy father rolling his eyes from 500 miles away. But Maslow was the real deal, not some spaced out, new age guru. He was celebrated in his time in both academic and business circles and is still widely cited today.

What struck me most in learning about this was A) how awesome this all sounds – I feel like it's and B) how rare this is in the real world, at least from my own, admittedly limited experience. Then again perhaps these attitudes lie beneath the surface, never explicitly stated. Perhaps they're subtly expressed through the myriad of day to day behaviors that encompass management of business and people.

Have you seen or experienced examples of "Enlightened Management"? Please share your thoughts in the comments below!