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Learn How To Love Your Job, Love Your Life and Kick Butt at Work

By Chief Happiness Officer Alexander Kjerulf

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Happiness is good for business

A grand old lady falls ill

Irma is the grand old lady of Danish retail. Founded in 1870, the company is the second oldest grocery chain in the world. It’s a multi-million-dollar business with 70 locations in and around Copenhagen.

However, during the 1990s the lady was ailing. The only people who still shopped there, the joke went, were little old ladies who did so mostly out of habit, because Irma was where they’d always shopped. Danes are very cost-conscious when it comes to food, and most of Irma’s customers had switched to the low-cost supermarkets that had appeared all over the country. For a decade, Irma had been losing its owner a lot of money.

Switching to cheaper products to compete with the discount stores didn’t work. An attempt to expand from Copenhagen to the rest of Denmark proved downright disastrous and had to be abandoned. Advertising campaigns didn’t work. The owner was on the verge of either selling off Irma, closing all the stores, or converting them to their discount alternatives.

In 1999 they went with a different solution, and in one last gamble made Alfred Josefsen CEO. The soft-spoken, 42-year-old Josefsen had a plan to fix Irma’s deep-set woes: “Put people first.” Sure, he would improve purchasing, distribution, cost-cutting and advertising, but Alfred believed that if Irma could make its people happy at work, everything else would follow.

To achieve this, Alfred focused on some specific areas:

• Leadership training—All leaders go through leadership training focused on personal development, not on MBA skills.

• Open communications—Alfred’s weekly newsletter to Irma’s people is not a press release or a corporate memo. It’s deeply personal and heartfelt, and has fostered trust and openness between employees and management.

• Celebrating good results—Whenever Irma needs to celebrate, all employees are invited to a huge party. Part of this involves top exeutives getting on stage and singing the company hymn!

Results quickly followed, and Irma became profitable inside a year of Alfred taking the reins. Today Irma is the fifth-best workplace in Denmark and the best retailer to work for in Europe. Irma’s employees say things like:

“Working for Irma is an honor.”

“We take care of each other. If a person seems to be doing badly, it isn’t just ignored.”

“Management has faith in us, that we can function independently.”

“Irma is the best place I have ever worked.”

Additionally, in February of 2006 Irma proudly announced its best financial result ever in over 130 years of doing business. This is the result of happy people doing great work.

Alfred has described the journey in his excellent book Kære Irma [Dear Irma]—It’s all about people, which is unfortunately only available in Danish.

The success factor

Here’s a short list of just a few of the critical success factors in business today:

Innovation, trust, productivity, drive, sense of humor,

quality focus, great customer service, rapid change, creativity,

initiative, motivation, energy, determination, communication,

cost effectiveness, clear thinking, good sales, commitment, courage,

customer relations, good leadership, excellence, new ideas,

conflict resolution, good dialogue, good work relations,

good supplier relations, willingness to go that extra mile

and much, much, much more...

Look familiar? Does your company face some of the same demands?

Now ask yourself where all of these things will come from. Machines? No. Improved business processes? Nah. High-priced consultants? Probably not. New IT systems? Nope. All of that can help, but is not the source of innovation, customer service, motivation or any other item on the list above.

All of these things come from people—and not just people, but happy people!

Alfred Josefsen had to improve Irma in each one of these areas. They needed innovation, they needed to cut costs, they needed to attract customers and improve service. Alfred had no doubt what his main point of attack needed to be: If he could make his people happy, all of this and more would follow.

Even if you believe that the only point of a business is to make money, you must still look after the happiness of your people, simply because studies show that happy employees will make you more money!

According to a study by the Great Place To Work Institute, which conducts annual international rankings of the world’s best workplaces, happy companies are a better investment. From 1998–2005, the S&P 500 stock market index rose by 4.81%. The 100 best workplaces increased their stock prices by 14.75% in the same period—three times as much¹.

According to Denison Consulting, unhappy companies in their study had an average annual sales growth of 0.1% from 1996–2004. Happy companies grew their sales by 15.1% in the same period².

According to professional service firm management expert David Maister, companies that enhance employee satisfaction by 20% can improve financial performance by 42%³.

According to Gallup, happy companies have much lower employee turnover and higher customer loyalty, sales and profit margins⁴.

These and many other studies show that the main advantages a business enjoys from happiness at work are:

• Higher productivity—Happy people work faster and more efficiently.

• Higher quality—Happy employees care about quality.

• Lower absenteeism—People actually want to go to work.

• Less stress and burnout—Happy people are less prone to stress.

• Attract the best people—People want to work for you.

• Lower employee turnover—Saving huge efforts in recruiting new people.

• Higher sales—Happy people are the best salespeople.

• Higher customer satisfaction—Happy employees are the best basis for good service.

• More creativity and innovation—Happy people have more ideas.

• More adaptibility—Happy people are more adaptive and open to change.

• Better stock performance—For all of the above reasons.

• A better bottom line—For all of the above reasons.

Basically, happy companies beat the pants off unhappy ones in every area, and studies confirm this again and again.

The point—in one simple graph

If you take away only one thing from this chapter, please make it this graph:

The jury is in and the verdict is unanimous: Happy employees are guilty of improving the bottom line. Businesses don’t have to choose between happiness and profits. It’s not a matter of either/or. Happiness is inextricably linked with profits. Soichiro Honda, the founder of Honda is with me on this one:

Each individual should work for himself. People will not sacrifice themselves for the company. They come to work at the company to enjoy themselves.

Gedankenexperiment

Let’s try a Gedankenexperiment—a thought experiment. Imagine two different departments in the same company, department A and department B. They do pretty much the same work, work out of the same building, and are comparable in most respects.

The only difference is this:

• Department A is mostly happy. They’re not deliriously happy each and every day, but the people like their jobs, like each other, and look forward to coming to work most days.

• Department B is less happy. It’s not that they hate their jobs all the time, it’s just that they’re not crazy about them, they’re not mad about each other, and though they do show up at work most of the time, it’s mostly for the paycheck. If department A (the happy one) has 10 people, how many people do you need in department B to complete the same amount of work?

Think about it for a second. Whenever I speak about happiness at work to groups of leaders, I ask them this question. The answers range from 30 (i.e., department B needs three times as many people) to 8 (i.e., department B is actually more efficient than A because they don’t waste any time on being happy).

Typical answers are 11, 12 or 13. As the studies quoted in chapter 7. show, the difference can be even bigger than this, because happy employees vastly outperform unhappy ones.

Here’s a bonus question for managers: What is it like to be a leader in department A compared to B? Where would it be easier for you as a leader to:

• Motivate people.

• Initiate and implement changes.

• Create good communication.

• Create understanding for and achieve the company’s objectives.

• Create an innovative and creative culture.

Which department would you rather lead? This question is left as an exercise to the reader.

Unhappy employees will cost you

Unhappy employees cost sompanies dearly. According to a University of Florida study, published in the January 2006 issue of the Journal of Applied Psychology, employees start to misbehave when they are angry at work, dislike their jobs, or believe their supervisors are unfair.

And this is not only the case for a few malcontents and complainers; even model employees turn bad and start gossiping, pilfering, backstabbing and taking long lunch breaks when they’re not happy at work⁵. So not only are unhappy employees unmotivated and disengaged, but many of the people who would be exemplary employees if they were happy will actively work against the company’s interest to get back at it when unhappy.

Four ways the happy companies have the unhappy beat

I want to briefly mention four specific areas in which happy companies beat unhappy ones. I’ve picked these because they’re among the most important factors for business success today, and because many companies struggle with them.

Happy organizations are more innovative

On Page 68 I mentioned Professor Teresa M. Amibile’s research into how the work environment influences the motivation, creativity, and performance of individuals and teams. Her work shows that happy people are more creative:

If people are in a good mood on a given day, they’re more likely to have creative ideas that day, as well as the next day, even if we take into account their mood that next day.

There seems to be a cognitive process that gets set up when people are feeling good that leads to more flexible, fluent, and original thinking, and there’s actually a carryover, an incubation effect, to the next day.

The Gallup Management Journal agrees, and finds that,

59% of happy employees strongly agreed with the statement that their current job “brings out their most creative ideas,” compared with only 3% of unhappy employees⁶.

So if innovation and creativity matter to your business, you need happy people.

Happy people are more motivated

Let me be blunt. To say that the job of a leader is to motivate his followers is as ridiculous as to say the job of the Chairman of the Board of General Motors is to turn on the sun in the morning so that we may have light by which to work.

As long as we cling to the myth and magic implicit in the notion that the leader’s job is to motivate the followers, that the boss’s job is to motivate subordinates, that the job of development of people in our organization is a job of motivating them, we are wasting our time.

—John Paul Jones Sr.

Every leader wants motivated employees. Every employee wants to be motivated. And yet we often see managers complaining that their employees are impossible to get going, and workers complaining that their managers don’t motivate them and don’t know what makes them tick.

It’s not the job of the manager to motivate employees. That is impossible. It’s a manager’s job to create a happy work environment in which employees are naturally motivated.

Think about it: How difficult must it be to motivate people who are dissatisfied, disappointed, distrustful, disengaged and unhappy at work. It’s an uphill battle all the way.

An article from the Harvard Business School put it like this:

Most companies have it all wrong. They don’t have to motivate their employees. They have to stop demotivating them⁷.

Happy employees need no external motivation—they motivate themselves and each other, and this internal motivation is both more efficient and more sustainable than the external motivation (such as rewards) that managers of unhappy employees must resort to.

If you want true motivation in the workplace, you must create a happy workplace. It’s that simple!

Happy employees deliver better customer service

A recent Harvard Business Review article entitled “Putting the Service-Profit Chain to Work” concluded that:

When companies put employees... first, their employees are satisfied, their customers are loyal, their profits increase, and their continued success is sustained.⁸

Happy employees make their customers happy because they:

• Are in a good mood.

• Are motivated.

• Care about customers.

• Handle difficult situations bettter.

• Care about quality.

• Have more energy.

Good, genuine customer service comes only from happy employees. Unhappy employees can try to fake it, but it’ll be just that: Fake service.

The math is a little strange on this one: One happy employee can give ten customers a good experience. Ten unhappy employees can’t give one customer a good experience—what they can do is give 100 customers a bad experience.

Happy organizations handle change better

When Poul Pabian was made CEO of a new tax office outside of Copenhagen, Denmark, created by merging five independent departments, he faced a huge challenge. The individual offices had been through too many half-baked changes already, and cynicism had set in, with employees saying, “Yeah, right, this is just one more crazy decision made over our heads. If we ignore it, it’ll go away.”

In such an atmosphere, it’s difficult to make a merger a success, so Poul knew that he needed to do something special in order to get the employees to approach the merger with a positive attitude.

His solution was simple: He had a one-hour chat with each of his 100 new employees. This wasn’t a job interview—the only purpose was to get to know his people, and to let them meet him.

He also organized for the employees themselves to paint their new offices—not to save money, but as a team-building exercise and to create ownership of the new building. People loved both ideas, and cynicism transformed to trust between management and employees.

Recently the structure of the whole Danish tax service was changed again, and Pabian’s organization now faces new mergers. How did the employees react this time? They’re saying “A new merger? Sure, let’s do it. The last time it was so easy, we’re sure we can do it again.”

Many companies find that change becomes more and more difficult, and that resistance to change grows inside the organization.

Some people think that change happens only out of necessity, when the status quo becomes unbearable. These people may be surprised to learn that happy companies are much better at creating rapid, positive change than unhappy ones.

Why? Because happy companies have:

• Higher levels of trust.

• Better communication.

• Better mutual understanding.

• Higher ability to solve conflicts.

• More creativity and innovation.

• More energy and motivation.

In fact, only happy organizations can get to the point where they thrive on change, and turn one major change after another into resounding success stories. Unhappy organizations never reach that point and are simply left to dread the next change.

The bottom line

There is no trade-off between happiness at work and the bottom line. It’s not about sacrificing one for the other. It’s not a matter of either/or—it’s both or neither.

Businesses don’t have to choose between profits and happiness. The real choice is this:

Do you want your business to be rich and happy

or poor and unhappy?

Tough choice, huh?

Let’s take it a step further: Making your business happy is not just a good thing, it’s the best thing you can do for any business, because it enhances everything else. Happy people learn faster, communicate better and form more efficient teams. They are more motivated, energetic and creative. Plus, happy people care about what happens to the business. Unhappy people don’t give a damn—or actively wish bad things on the workplace.

This means that happiness at work makes every other activity in the workplace more efficient. Expanding the business, introducing new business processes, signing new customers, dividing or merging—whatever your business needs to do, it can do so much more efficiently when people are happy.

The future of work is happy

Our working environment is getting better. Would you want to work in today’s business world or 100 years ago? 50 years ago? Even 20 years ago, sexism, discrimination and authoritarian leadership were more common than they are today. There was also less freedom, strict codes of behavior, less room for personal expression, and less room for professional growth and development.

Sure, some things are getting worse—there is definitely more stress and anxiety in today’s workplaces. But if you ask me to choose, I would absolutely prefer today’s work of world over that of the 1980s, 1950s or 1920s. Even if we don’t notice or think about it often, things are getting better.

If we take that thought even further, in a few years time there will mostly be happy companies. Happy companies are so much more efficient than their unhappy competitors that they will beat them in the marketplace. In fact:

Happy companies will beat the pants off their unhappy competition!

A wave of happiness is coming to the business world. The companies who can surf that wave are bound to get more success and more happiness. Those who can’t or won’t will slowly sink beneath the surface. They won’t be missed.

Unhappiness is just plain wrong

Actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness.

—John Stuart Mill

This chapter shows that businesses should embrace happiness because it's good for business. But there is one other, even more fundamental reason: Making people happy is good, making them unhappy is just, plain wrong!

There are workplaces out there that run their people down, make them stressed and ill, destroy their sense of worth, are havens for bullies, and allow all kinds of harassment. Though it is rarely intentional, these workplaces still make their people unhappy, and mentally and physically ill.

I have no idea how leaders and managers of these businesses can live with themselves. They may hide behind the old argument that companies should only care about money—or, as Milton Friedman said it, “The business of business is business.” However, I hope this chapter has convinced you that this is a false argument because happy businesses make more money.

There is no longer any excuse for tolerating an unhappy work environment, when it’s just as easy to create one that is inspiring, uplifting, healthy and happy—one that is good for people and good for business.

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