not your average ceo. business book guru and hotel pioneer chip conley helps his employees find true meaning in their work. and protecting your business against angry tweeters. mark haynecker minds the internet looking for your worst customers. they're in conversation with our reporters, jon fortt of "fortune" and kim nicholas of" forbes," this week on "press:

here." >> good morning, everyone. i'm scott mcgrew. we're going to talk this morning about that thing that so alluded mick jagger, satisfaction. in this case, the satisfaction in business. how, of course, to satisfy the customer, but before you can do that, you have to satisfy your employees. the hotel business is tough by anyone's standards. your customers are price-sensitive. what you sell is largely a commodity, infinitely repeatable by any number of chains. and a large portion of your employees work very repetitive, not terribly rewarding jobs. nearly one-third of the employees at this hotel chain clean toilets for a living, points out hotel founder chip conley. yet, his san francisco-centric chain of boutique hotels have not just survived the dot-com downturn, 9/11 and the latest disastrous california economic

crisis, they've actually thrived. conley has become a business guru and author of three books. his most popular, "how great companies get their mojo from maslow." it explains how to recession-proof your business by recognizing your employees' hierarchy of needs. chip conley puts the joy of life in his company, which he started at age 26. and in which he sold a majority stake just recently. joined by jon fortt of "fortune," kim mcnicholas of "forbes." start with the deal. this is very recent where you had the chain of hotels and you made a major, major deal. >> yeah, you know, in bad sides, there's two sides of the coin, the opportunity side of the coin and the adversity side of the coin. and we saw we had two once in a

lifetime downturns in the last decade, the dot-combust in the bay area and this one, which is worldwide. i've seen a lot of adversity, but in this downturn, i can see an awful lot of opportunity ahead, and we wanted to connect with a big capital source that would allow us to grow nationally and acquire a bunch of hotels probably at a big discount over the next two or three years. >> what does that mean, though, for you personally? are you the head of this company? >> still the head and the ceo. i've been the ceo for 23 1/2 years. >> so, it's a lot of capital? >> it is a lot of capital. i will probably at some point, i'll go a little higher to a chairman role at some point, but mainly, it allows us as a company to build out our infrastructure and build nationally. >> so, you're going to keep that capital and keep bringing back into more boutique hotels across the united states. >> correct. i've been very disciplined about just saying we're only at first a san francisco company, then a bay area company, and now a california company. we operate more hotels, independent hotels in the state

of california than anybody else, by far. actually, there's not even a close second. but now with 33 hotels, we're going to actually move beyond that and say let's export the california hospitality experience elsewhere. >> why did you go into this business? i mean, most cases -- >> good question. >> who are looking tomorrow entrepreneurs, not i want to open up a boutique hotel chain. >> right. >> why did you do that? >> so, i grew up in southern california near disneyland and i was fascinated by disneyland as the entertainment/hospitality experience there. i went to stanford undergrad, stanford business school, and a couple years as a real estate developer and i was not very happy. each of us have a job, a career or a calling, and i had a job, and i didn't want to have a job. i figured, i worked that many hours, i wanted to have a calling. what i really liked about real estate was it was entrepreneurial, but i wanted something a little more creative. so, at age 26, i wrote a business plan to create a

boutique hotel company in the mid-1980s, and i had no hotel experience at all, but i loved hotels. and i found a motel in the tenderloin that was in bad shape, a pay by the hour place. >> find one in good shape. well, you can now. >> long story short, that's how i got started it was the creativity of the business that attracted me. >> as you expand -- and i asked the same of the head of virgin american airlines, who said i've got a boutique airline. but the bigger you get, the more people you bring in, the more diluted the idea becomes, that you can't be a tiny family of doing it exactly the same way across the world. >> yes and no. yes and no. in the airline business, one of the best examples of a company that got -- that created a stronger culture as they got bigger is southwest airlines. as southwest airlines got bigger -- if southwest airlines knew they were going to be a national company, they would never have called themselves southwest airlines. >> right.

>> but the reality is, as they got bigger, their culture got stronger. apple has a very strong culture. i mean, not always -- for some people's taste, it's not exactly right, but the reality is that there is still a really great sense of -- >> you know that's a big risk, though. i mean, that's got to be one of your biggest challenges, that you -- >> this is the biggest risk of any company that grows, is that intangible of culture actually gets diluted with time, and it actually -- what was that spark and that magic that brought people, i call it the mojo of the company, that gets lost. >> so, where do you retain that? do you retain it at the hiring stage? do you kind of enforce the culture as people have more experience, employees? do you do it at every stage? >> first of all, you have to manage around it. here's one of the biggest problems about leadership and management, business management in the 21st century, is in the 20th century, we were taught to manage what we can measure. and that's good advice. you manage what you can measure.

you create metrics to determine whether you're getting it right. the thing is, managing 30 years ago, you could manage around profitability and cash flow and market share and things that were more obvious. today, we actually have to create some new metrics. we have to create new metrics about how do you measure culture, how do you measure an innovation culture, how do you measure customer satisfaction, employee satisfaction? because frankly, great companies with a great culture drive employee satisfaction, which drives customer loyalty, which drives profitability, but those first three things, culture, employee satisfaction and customer satisfaction are intangible, whereas profitability is a tange yinl. >> let's touch on the employee satisfaction. you've written in your book, just like maslow, you start with compensation. you've got to pay people, but that's easily competitive. you can reward and recognize people, but then there's something beyond that where you complete them and you make their life have a purpose. >> right. >> how does the front desk

manager or -- >> or a housekeeper. >> or a housekeeper, midnight to 8:00 a.m., complete their meaning in life as -- it doesn't sound like a job that completes meaning in life. >> well, let's be honest and sober that not everybody who actually cleans toilets for a living finds it a calling. in fact, if 20% of our employees find being a housekeeper as a calling, we're probably five times better than the average company. so, we don't try to delude people into thinking they're actually going to be doing work that most people wouldn't want to do, but you can create a sense of community and you can give people the sense that they're appreciated and recognized for who they are and what they do best. and some of the examples of things we do are we get our housekeepers together once a year and we get them all together, all of the house keepers in the company come together and we have a housekeeping discussion and a day long session of trainings

and fun and great meals, and we actually get together in small groups and ask them, if a martian came down here from mars and saw what you did for people in a hotel, what would they call you if they didn't call you a housekeeper or a maid? and they come up with all kinds of stuff like we're the mom away from home or the clutter-busters or the peace of mind police. >> what is the meaning of your job. >> exactly. because the meaning of your job -- ultimately, if you want people to actually really appreciate what they're doing, help them move from the task to the purpose and the impact. and what moo leaders don't do is help the employees see the impact of what they do. they don't tell employees, listen, here are five customer letters of people who love their experience, and most employees never see that. >> chip, we'll take a quick break and do a commercial break. when we come back with chip conley of joie de vivre hotels in just a minute.

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welcome back to "press: here." my guest is chip conley and kim mcnicholas has the question that he doesn't want to guess. the question everyone wants to ask. go ahead. >> we know you're a successful boutique hotel owner, but your success doesn't com wehout a little bit of controversy. you had some burning man pictures up on facebook, and what's interesting is at the time, you were also creating a social media policy for your employees. how does that become a conflict for you? >> well, it wasn't a conflict for me. >> for the employees. conflict of interest. >> long story short, it was on a friday afternoon -- i'm a ceo, and our president came in and talked with me, said i have something i need to tell you, and i thought it was something like she's leaving the company.

she was like, it's your pictures. people are sending them to each other, because some of our employees are your facebook friends. and you came back from burning man, which is a big arts festival in the desert, and you have pictures of you in a tutu without a shirt on. and people find that shocking. and i said, okay, well, i was shocked by that. i was like, oh, wow, i'm just me. i'm just who i am. so, that night i went to a dinner, actually, and there was a "fortune" reporter actually at the dinner and there was a bunch of social media presidents, and we had wine and the interview format. they said, well, tell us about your life right now and i told them, well, just today, this happened. the "fortune" reporter said i want to talk to you. so, we ended up doing a story talking about the issue of a ceo having a social media policy for all employees, including the ceo, but where do you cross the line? when does an employee cross the line in terms of doing something that could be detrimental to the company? now, clearly, an employee in the company showing pictures of themselves, you know, in a tutu

at burning man isn't going to actually cross the line, but does it cross the line that the ceo does? and so, we got a lot of feedback from people around the world, and generally, 80% of them said, listen, ceos should be people, too, they should be more authentic, we like you -- >> you say clearly, as if any company would be fine with an employee topless in a tutu -- >> and i can think of several -- >> if scott did that -- >> you haven't seen my burning man pictures, though. >> you were surprised, though. you just thought of yourself as you and -- >> i am me, yeah. >> and you didn't realize your employees thought of you maybe more as a father figure or -- >> that was the issue. they like chip, but if it's chip as a ceo, is this appropriate? so, there's a bit of internal conflict as to how people felt about that. at the end of the day, i left the pictures up. employees, even some who were initially like, ooh, that's a little -- they liked it. they liked the fact that as a company, we're authentic and we try to be ourselves, and that's basically one of our core

values. >> but at one point, you did say i see their point of view and at one point, you told your pr person, maybe i should. what was that point where you said, no, wait a minute, screw this. i'm not doing it, i'm leaving them there? >> well, it was a couple employees who came to me and said, if you take them down, actually, it says more about you than if you leave them up. taking them down suggests that you're somehow afraid of these pictures and the pictures are not -- i'm not naked, i'm not doing drugs, i'm not doing anything. it's just, i'm like -- it's like being at the beach but having a tutu on. >> in the second half of the show, we'll have a company called revonate on and they deal with social media and hotels. just a few years ago, i would never have stayed at a boutique hotel. i would have stayed at the holiday inn because i would have known it's dependable. >> right. >> i know kind of what it looks like, even if i've never been there. >> right. >> in the age of the internet, you can really fly because people can say this is what it's like and i can trust them. >> yep, absolutely.

tr tripadviser's the number one site people are going to for advice from friends, or people they don't even know who leave feedback. it's like a aaa. aaa and mobile used to have ratings. well, people don't care so much about that anymore. they do care about what other people are saying. that's why i say managing in the 21st century is all about looking at the intangible, and that is what are people saying about you and how do you measure it? and what revonate does so well is they create a dashboard that tells you, what is the world saying about you right now. >> what have you done wrong? what do you look at and say we could have done that better? >> there's always a hotel or restaurant where we could have launched it better. usually, if we're doing something that sounds good but no one in their gut says i would want to come here myself, that's a problem. if it seems like a focus group says we should do that, but it didn't feel authentic to us like it was the thing we should be doing. but in terms of -- there's no doubt that, whether it's tr

tripadviser, yelp, et cetera, et cetera, people more and more are relying on people they don't know to actually give them advice on where to stay or eat. >> chip conley, you gave me an excellent segue there. we'll come up in just a minute. keeping the customer happy, particularly the very connected tweeting customer. protecting your business from the digitally dissatisfied when "press: here" continues. our points from chase sapphire preferred are worth 25% more on travel. we're like forget florida, we're going on a safari. so we're on the serengeti, and seth finds a really big bone. we're talking huge. they dig it up, put it in the natural history museum and we get to name it. sethasauraus. really. your points from chase sapphire preferred are worth 25% more on travel? means better vacations. that's incredible. believe it...with chase sapphire preferred your points are worth 25% more on travel when booked through ultimate rewards.

welcome back to "press: here." the "wall street journal" recently ran an article with the headline, "i hate my room, the traveler sweeted, exploring the new tendency of travelers to complain about their hotel experience to their friends instead of the front desk."

of course, hotel guests also gush about stays online as well. either way, the front desk is probably learning about praise and criticism for the hotel through twitter and facebook. these days, a good score on yelp or tripadviser is far more influential than a write-up in a travel magazine or a aaa guide. a san francisco start-up called revonate helps hotels monitor their online reputations, scouring twitter and google and facebook, examining tweets, news articles and postings, compiling it all into an online dashboard sent to hotel managers and even housekeeping so that hotels can adjust their services to keep their most influential guests happy. >> mark haynecker is co-founder of revonate, probably knows more about the best places to stay at a hotel than just about anyone

else in the world. joined by my colleagues jon fortt of "fortune," kym mcnicholas of "forbes." the very first question that occurred to me when we talked about you being a guest is, i've heard of google alerts. i put my hotel name into google alerts, i'm notified any time google comes across it. how are you better than that little free service? >> good question. so, you know, just monitoring everything that's being said about you is difficult, but with google alerts, you get some basic information. the real power comes when you aggregate all the data together, right? so, bringing together all the different channels into one place, not just about your hotel and your competition, and then converting it into intelligence and slicing all of this data and dicing it down by any metric or term is really where the power comes and where the intelligence comes that you ultimately then act on and profit from. >> it's great that they have all this data, but are hotels doing anything with this data? because if you go to tripadvisor.com, only 4% of

negative comments on trip advisr are actually receiving responses from hotels. >> it is a very hot topic in the hotel space. so, you're seeing, at least within our client base, a massive uptake in terms of folks moving as a first step to focus on review sites. review sites have a huge impact on their business, and ultimately, on bookings. and so, they're realizing that. they're realizing this is an opportunity to be responsive to guests, it's an opportunity to drive loyalty, drive incremental visits and stays. >> seems like there are three opportunities here for hotels. tell me if i'm wrong. but there's the sort of sending up a flare opportunity of if somebody sends out a tweet that's really bad about the hotel right then, they've got a few minutes, maybe an hour to do something about that. then you've got a little longer window. maybe the person's staying a few days. maybe within the first day you can do something to make their stay better. and longer term, if they posted a negative review, that's going to live there for months.

can you do anything about that? are you able to address all of those points? are you able to get the hotel information within minutes that they can use? >> we are. >> and then can you tell a story about how maybe that's made a difference? >> sure. i think what you're speaking to is the fact that all the different channels have shelf lives and different expectations in terms of feedback. twitter is instant, and people expect that you respond to that very instantaneously. reviews, on the other hand, i think most folks find it acceptable to respond within 24 hours, maybe in 48 hours, although to your point, not everyone's doing it. and we're here to help change that. >> what is your primary suggestion when somebody complains about a hotel? how do you respond? and that's probably true of anyone watching with any business, restaurants, what have you. how do you respond to a legitimately, a somewhat mean-spirited, negative review? >> you know, you definitely want to cut to the chase. you want to be authentic. you want to make sure that you're not picking a public fight, because everyone can see

it. and you know, i think it's an opportunity to show them that you're listening, show them that you're making improvements and that you ultimately are planning to make improvements to, you know, to the things that they mention that weren't -- >> is triple a dvisor the new aaa? my parents used to have the aaa guide or the zagat. if you're no good on tripadvisor, you can close your doors. >> i think there's been an evolution, right? i think folks before the internet trusted brands. then the internet came along and now the consumer plays a huge role in defining and enhancing or deflating someone's brand. so, what you're seeing is that folks now have obviously gone to google to find facts quickly and search about hotels. then the review sites, tripadvisor being one of the main ones, certainly, is where people go to find trusted information, but not directly from their friends. now the latest revolution is folks using facebook where they've got their friend networks, reaching out to their

friends and saying where should i stay, where should i go? and what you're seeing is that the conversion rates as you move up that chain of highly trusted folks, the conversion rates shoot up. >> you potentially have a treasure trove of data about what customers like and don't like. >> true. >> across different hotels. can you tell me, what are people complaining about most right now that might be different from what they used to? >> it's a -- you know, that's interesting. we do have all of that data and we can probably slice it down to kind of give some macrostatistics. i think revonate, we plan to do that in the future. >> sure. probably save a lot of money. >> antidotally. it's a great question, john. >> things like free wi-fi or how the wi-fi's working. we all travel and get to a place and wi-fi's now a critical service, so -- >> if we don't see a complaint, we know it's not working. >> yeah, right. >> good point. >> it's another example. parking, obviously, being -- hey, parking's expensive.

so, now having full visibility into all this data. and the real power of it from our perspective is it's not just bringing the online reputation of that hotel to the forefront for them and in an aggregated way. it's actually helping them benchmark themselves against their competition. >> sure. >> and this is really the first time where now a hotel can come in, and basically, have full access to the customer survey feedback box, if you will, of their biggest competitors. >> it does, and you should -- go ahead. >> i was just wondering, isn't that a conflict, though? because all of your customers in a sense, are hotels, so i would think it would be a conflict that maybe you are providing data about another company to their competition. and they're a customer, too. >> yeah. it's all publicly available data on the internet, right? and so, in terms of being able to, you know, give a hotel, one of our customers an advantage of seeing not just their hotel but how they benchmark against the

competition, it really is a matter of they're first and they're doing it first, they have a huge advantage. and you know, does everyone ultimately need do this? in my opinion, i think it's going to be the new measurement of guest satisfaction. >> you do and you should measure these complaints by level of influence. if i have 5,000 twitter followers, i'm going to have more influence in what happens, but it creates this kind of weird clash, doesn't it, of digitally connected complainers get more attention? >> yeah, and i'm frustrated by that. i think the hotel industry does its best, it's a business-oriented business and everyone is always focused on delivering the highest levels of service. so, sometimes complaints are warranted over twitter. we've seen various examples of that. sometimes they're not. and it's a little frustrating to see people launch complaints to a huge network of folks, you know, just to try to get an upgrade. i think that the industry

doesn't appreciate that. >> mark haynecker is the ceo of revonate.com. mark, thank you for being with us this morning. "press: here" will be back in a moment. so, we book a flight to hawaii using our points from chase sapphire. last minute... on christmas. and sitting next to us, chevy chase. and we really hit it off. we play golf, and then the luau. he's like da vinci with ice. and after, we help hang christmas decorations. wait, wait, wait. you flew last minute... on christmas... with points from chase sapphire? yeah. amazing. believe it. with points from chase sapphire, you can book airline tickets with no blackout dates or restrictions.

welcome back to "press: here." jon fortt of "fortune" will not be jon fortt of "fortune" much longer. >> yeah, and that doesn't mean i'm going to be jane fortt of "fortune." i am tomorrow moving to cnbc where i will be technology correspondent. i love "press: here" so much, i'm moving in. my desk will be right there. >> you'll be a couple feet away. so, you, of course, think of this as a demotion because he's moving to television. we try to think of it as a promotion. do you know lots of little words? because we like little words more than -- >> really, sure, yeah, yeah. >> i know many little words. >> no million-dollar words. >> it will be an adjustment for you. you've done, obviously, a lot of television. you've done many an episode of

"press: here" and cnn as well, but it is a whole different medium. >> yeah. it will be really different, a lot more breaking news, you know, a lot more pressure to have that instant analysis. it will be a rush. it will be a lot of fun. >> you're really known for your in-depth analysis, though, and time to really think things through when you write your magazine articles -- >> you know, we don't have time for in-depth analysis on television. >> exactly. >> hold that thought. that's our show. that's in print. that's our show this week. thanks to chip conley and mark haynecker as well as jon fortt and kym mcnicholas. back to a regular schedule after preemptions by nbc sports, so i'm pleased to say we'll be back here next week and the week after that and the week after that. i'm scott mcgrew. thank you for making us part of your sunday morning.