Maslow’s hierarchy of needs is a theory in psychology that states lower hierarchical needs must be satisfied before individuals can address higher needs. From the bottom of the hierarchy upwards, the needs are physiological, safety, love and belonging, esteem and self-actualization. Organizations can benefit by understanding and applying this theory to enterprise.

Maslow Hierarchy of Needs

The bottom four levels are often referred to as deficiency needs (D-needs) because they are based on deprivation, so people are motivated when they are unmet. Also, the motivation to fulfill such needs becomes stronger the longer they are denied. For example, the longer a person goes without food, the more hungry they will become.

The top level is known as growth or being needs (B-needs) where motivation grows as needs are met.

When a deficit need has been satisfied ‘more or less’, it will go away and our activities become directed toward meeting the next set of needs that we have yet to satisfy.

How does this relate to organizations? Let’s find out!

org hierarchy of needs

Here you see the five layers that parallel Maslow’s hierarchy; those psychological levels are indicated along the left side of the pyramid.

As each level is addressed, financial stability naturally increases.

On the right side, you can see that the first level is purely functional in terms of operational foundation, while the second section – levels 2 and 3 – is about psychology and corporate culture. The top section includes levels 4 and 5 and are more about emotion and aspiration.

This will be our base diagram as we explore each level.

org hierarchy of needs

The base, or bottom, level is the operational foundation of the enterprise. This level requires that survival needs be met, including money, core product promises, the ability to transact business, market share, customer flow, having the right people in the organization, office space, and budget. This level is implemented by finance, production, sales, marketing.

The second level is about efficiency and establishing the status quo. Its focus is on development needs and creating structure, like profitability, gaining market confidence, having processes in place, job security, benefits, salary, freedom from reorganization and growth. Typically this level is largely implemented by the finance and marketing teams.

The third level is about community and relationship needs, including sales, growth and partner channels. There is a focus on building customer intimacy, employee engagement, significance in the market and in purpose, family, cooperative peers, cross-selling, team-building, inter-dependent projects and alliances with partners and vendors. This level is implemented at all levels of the organization, including sales, marketing, finance, account management, partner relations, and human resources.

The fourth level concerns strategic differentiation through esteem and recognition needs, like enhancing the employee and organizational experience, employee perks, job title, prestige, status, awards, and expansion. Key players in implementing this stage include human resources, legal, marketing purchasing, information technology, business development, research and development, and public relations.

The fifth, or highest, level is about meeting self-actualization needs. Implemented by corporate social responsibility and marketing, this is where the big brands live because they are no longer worried about starving but about being king of their market with wide brand awareness. This is where organizations deliver unexpected results at no cost, offer service-based initiatives, community giving, become a subject matter expert, gain authority, build thought leadership, and focus on social responsibility.

So what difference would it make in your organization to think about what you’re offering and how you’re delivering it operationally using this framework?

We’re going to talk more about that in a minute – but first, one more mind-bender for you.

The Customer’s Point of View

loyalty hierarchy of needs

This is another spin on the hierarchy from your customers’ point of view.

Inside the pyramid are customer expectations and needs from connection with your organization. On the right side are the things your organization provides to be in that relationship. As both the customer and the organization are contributing their parts to the relationship, loyalty to each other grows.

At the first level, the customers’ base needs are met regarding your product, service, communication, and access to support. The organization needs to provide an action plan given an identified problem with a targeted outcome. At the second level, customers expect to have the tools they need to achieve goals and targets – this gives them security. Your organization needs to deliver streamlined workflows, functionality, and implementability of their project. Together, these two levels deliver a ‘frictionless enterprise’ experience both internally to employees and externally to the customer.

At the third level, the customer must know they have an immediate community, like they are an insider, with the organization’s employees, leaders and even key stakeholders. At the fourth level, the external community recognizes your customer’s connection to the organization via social channels, online forums, conferences, etc. Together, the third and fourth levels represent the digital transformation your organization likely has to or did, experience to deliver these kinds of deliverables.

At the stage of self-actualization, or fifth level, the customer becomes the ambassador, sharing how they achieved success and inviting others to do the same. It becomes impossible to share success without talking about the organization that helped them achieve it. It’s important that your organization give them the language to share their ‘war stories’ through case studies, video interviews, conference spotlights, and newsletter highlights. In doing so, the organization is demonstrating leadership by sharing that customer’s success story, gaining greater visibility and reach in their market and, ideally, positioning with thought leadership content.

Why Does This Matter?

There are many reasons why it’s helpful for you to understand and consider this in the context of your organization.

1. Organizations (and their initiatives) cannot move past base needs that haven’t been met. The base needs create stability and capability to move up the hierarchy.

2. A significant change process can destabilize people, process and profit streams. In turn, this can create resistance, sabotage, etc. as the pace of change out-paces people’s ability to adapt to it. By understanding the psychological dynamics, you can minimize or even neutralize such challenges.

3. Digital transformation can get stalled or stonewalled. In that case, competitors can out-innovate your organization within your market space.

4. When an organization has progressed through the other levels and is ready to self-actualize, it needs to operate at that level or risk losing ground. (Think being a PhD student stuck in 5th grade.)

5. The higher the organization ‘lives’ in this hierarchy, the greater the financial stability.

So what does any of this have to do with technology? Only everything!

XTIVIA venn diagram

Technology is an enabler for organizational achievement. Creating results depends on using the right tools – including technology. Leveraging your previous investments is only smart (for as long as it makes sense). XTIVIA’s intention is to help your organization optimize at every level to achieve your business goals by listening, providing strategic and adaptive technology solutions, and becoming your trusted technology partner – for life.

If you can imagine a business outcome, XTIVIA can create it with technology. Is this a shameless plug? Heck yeah!!! Can we back it up with talent, know-how and can-do attitude? Absolutely!

Let’s begin by having a conversation about your business goals. Simply enter your information here and we’ll get you 1:1 time with a trusted XTIVIA advisor.

Closing Thought

Organizations are dynamic – they move through these hierarchical levels at various stages of lifecycle, from individual employees to the team to the whole company. Know where your organization is to support your customers, employees, partners, and goals properly. XTIVIA is here to help.
P.S.: Be sure to watch our Live Session recorded video here.

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