It pays to be happy. Studies show that businesses with happy employees consistently outperform their less happy competitors in the marketplace and in the stock market.
Considering the challenges that modern organizations face, creating a happy organization is the number one strategic imperative and the only way to long-term success.
This article will tell you why happiness is so important for businesses today, and how you can make your business a happy one.
What is happiness at work?
But let’s start with the fundamentals: What is happiness at work?
This is where we Scandinavians have an advantage over the rest of the world: We have an actual word for it. In Danish (my native language) the word is arbejdsglæde, and while that (quite rightly) looks utterly unpronounceable to the rest of the world, it’s a concept that is deeply ingrained in Scandinavian work culture and one that most businesses focus on to some degree.
The word translates into English simply as work-happiness, and that is indeed our entirely non-surprising definition of what happiness at work means:
It’s a feeling of happiness derived from work.
Sorry to disappoint, but that’s it. Less strictly, it’s that feeling you get when you:
- Enjoy what you do
- Do good work and feel proud of it
- Work with nice people
- Know that what you do is important
- Are recognized for your work
- Take responsibility
- Have fun at work
- Are motivated and energized
- Feel that you kick butt
Happiness at work is…
There are few important points to note about happiness at work:
Happiness at work is a choice
You can’t force or pressure people to be happy, no matter how genuine your concern for others. If you create a mood where it’s right to be happy and wrong to unhappy or dissatisfied, people will rebel against that and actually become less happy.
Happiness at work is different for everyone
One mans happiness is another persons living hell. We’re all different, and the same things will make some people happy, and others unhappy.
Happiness at work is long-term
It’s never about blowing off what must be done, in order to have fun and be happy instead. It’s not just about being happy here and now – it’s happiness for tomorrow and next year and 10 years from now.
Happiness at work is not…
There are also some things, that work-happiness is not:
It is not eternal
There will always be boring tasks, less-than-nice people, bad days. Being happy at work does not mean that you’re always happy. But hopefully, you’re happy more often than unhappy.
It is not just fun and games
It’s nice to laugh and have fun at work, but it’s not just about that. We’re talking about a serious happiness here, that goes way beyond frivolity and silliness.
It’s not about being ecstatic
You don’t need to run around in a constant state of bliss, high-fiving your colleagues. You can also be a very quiet, serious person and be perfectly happy at work.
Why that peculiar term?
Businesses don’t normally talk about happiness at work. The common terms are employee satsifaction or job satisfaction.
I don’t use those terms for a very good reason: They’re booooooooooring.
There is no way you can energize or excite the people in an organization around the theme of satisfaction. “Come on, everybody, let’s make this a workplace where we can all be satisfied!” is not exactly the rallying cry of the century.
Focusing people on happiness as in “Let’s make this a workplace where people are happy to work” has much more potential and sends a much clearer and more interesting message.
Why happiness at work matters
Being happy at work is crucial both to the employee and to the company. Let’s look at why.
For the employees
When I got my first consulting job I worked very hard. I was the traditional IT consultant working many overtime hours and becoming quote successful. I’d moved to a new city for that job, far away from my friends and family, but that was fine: I didn’t really have time for anything outside of work. Basically, my main goal was to be successful!
But after a year of this I suddenly realized something: I was successful, certainly, and I made good money. But I was not happy. I was in fact feeling lonely and unhappy, because all I ever did was work. Right then and there, I decided to change my life, and work in a way that would make me happy.
Think about it: You will spend more of your adult life on your job than on anything else (except possibly sleep). Your work will take up more of your time than your family, friends and hobbies combined. Won’t it be nicer if that time is spent at a job that actually makes you happy?
Soichiro Honda, the founder of (surprise) Honda is with me on this one. He said:
Each individual should work for himself. People will not sacrifice themselves for the company. They come to work at the company to enjoy themselves.
Also, studies show that happy people are more succesful than others, which makes sense when you think about it, since happy people are more optimistic, outgoing, likeable, motivated and energetic – all essential qualities for business success.
For the workplace
What do businesses need to succed? Here’s a short list of just a few of the critical success factors:
First ask yourself, where all this comes from. Machines? No. Business processes? Nah. New IT systems? They can help, but they’re not the source. It’s clear what is: People!
And not just people. but happy people!
And here’s why. Happy people create:
- Higher productivity – happy people achieve better results
- Higher quality – because happy employees care about quality
- Lower absenteeism – people actually want to go to work
- Less stress and burnout – happy people are less susceptible to stress
- Attract and retain the best people – people want to work for you
- Higher sales – happy people are the best sales people
- Higher customer satisfaction – happy employees are the best basis for good service
- More creativity and innovation – happy people are more creative
- More adaptive – happy people are much more adaptive and open to change
- Better stock performance – for all of the above reasons
- Higher profits – for all of the above reasons
Basically it stands to reason that happy companies have unhappy companies beat in every area, and studies have confirmed this again and again.
Furthermore, until recent years, all companies wanted from employees was their time. In a factory environment, all we really need from people is that they do as their told. Henry Ford is said to have complained: “Why do workers come with a brain, when all I need is a pair of hands????
Today however, we need much more than hands. In a business climate where rapid change is the order of the day, we need employees to realize more of their potential. Most businesses know that their very survival depends on their ability to:
- Increase efficiency
- Change rapidly
This is not possible as long as each employee comes to work only as “a pair of hands???. In order to meet these demands, businesses need motivated, creative, fully engaged employees. In other words: Businesses need happy employees!
The bottom line
The important thing here is that there is no trade-off between happiness at work and the bottom line. This is not about sacrificing one for the other. It’s not a matter of either/or – it’s both and.
You 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 one, huh?
The happy future
In a few years time, there will only be happy companies. Since happy businesses are so much more efficient than their unhappy competitors, they will beat them in the marketplace.
Creating a happy organization
The million-dollar question then becomes this: How do we make an organization happy? How do we create workplaces where people enjoy each other, their jobs and the customers?
First of all: Who must do something? Who is responsible for the employees’ happiness? It’s simple: Each person is ultimately responsible for his or her own happiness at work. Leaders and managers can never be responsible for the employees’ happiness, because happiness is a feeling, an internal state which no-one can control in other people.
The managers’ responsibility is to create a workplace, where it is easy for people to be happy. And since the very specific task of managers is to take initiative and appoint resources for specific tasks, it’s logical for them to start doing something.
And here’s the good news: It’s simple. This is not rocket science, every workplace in the world can do it, and many are doing it and reaping the resulting benefits. It’s not even expensive, and it requires nothing that you don’t already have inside the organization.
A simple model for happiness at work
A simple 3-step model shows what it takes to make a workplace happy, as shown in the figure below.
The security level
At the bottom, there’s the security level. This encompasses the most basic fundamentals of the happy workplace, and includes things like:
- Security – that you can go to work without being injured
- Workplace environment – light, temperature, sound, air quality, …
- Basic job security – security against unreasonable firing or abuse
- A fair salary – wages you can live on
The items at this level are now solidly established in most modern countries. Often they are required by law, and are the result of years of negotiations between labor unions and business.
The perk level
At the top level, we find many of the things that modern corporations are already doing for their people, including:
- Perks – free coffee, good, cheap food, etc…
- Pensions – partly financed by the employer
- Dental/medical insurance – in countries where this is not supplied by the state
- The annual office party – a nice tradition
- Bonuses – depending on individual or company performance
The perk world champion is of course SAS Institute, who have the most extensive list of perks I have ever seen – from live piano music at lunch to swimming pools and country clubs. Read my previous post Perks gone wild on how they do it and why this works for them.
These two top and bottom layers are very well known and understood.
The choice layer
However, there is a third layer, a middle layer, which many of us overlook. The bottom layer comprises the most basic workplace necessities. If these are not in place, very little happiness is possible. The top layer is about making people happy. Giving them a little extra, to make them feel good about their work.
The middle layer is about making people want to be happy. If people don’t want to be happy, there is no way you can make them. In the immortal words of Jack Stack, CEO of The Great Game of Business: “They gotta wanna. ‘Cause if they don’t wanna, they ain’t gonna.???
When companies fail to consider this level (and they often do), you get a deep frustration in management and may find them saying things like: “Look, we’re doing so much for our people. We give them a good salary, a gym, child-care and much more – and they still complain. They’re still not motivated and energized???. If you disregard the middle layer, and have a workplace where people don’t want to be happy, there is nothing you can do at the perk level. It doesn’t matter how much money you spend, they still won’t be happy.
Conversely, in a company where people truly want to be happy, they are almost impossible to rattle. No matter what happens, they just keep on going with an unshakeable determination and motivation.
The main difference is this: When you address the perk layer, it’s about the company making the employees happy. When you address the choice layer, it’s about the employees making themselves and each other happy. And that is the path to sustainable happiness at work: When each individual is working alone and collectively to further that happiness.
So how can you address the middle layer? How can you create a workplace where people want to be happy. Well, I have good news and bad news. The good news is, that where the perk layer is often quite expensive, addressing the middle layer need not be.
The bad news is, that addressing the top layer is easy – it’s basically about spending money. Addressing the middle layer takes something more: It means that the company must truly care for it’s people. It requires more of it’s leaders as human beings.
Six happy practices
There are six practices that address the middle layer. I have worked with and studied many happy (and unhappy) companies, and have found time and again, that the happy workplaces excel at each of these six practices, whereas unhappy ones always fail at one or more of them. The six practices are described below, along with real-life examples.
1: Be positive
A positive attitude matters. No matter how serious or critical your business and you current situation, a positive happy attitude is sure to help.
One company that has realized this since day one is Southwest Airlines. They focus intently on being happy and having fun, and one key practice in this regard is that they prefer to hire happy people. Their motto is “Hire for attitude, train for skill.??? Of course qualifications matter, but it matters even more that you’re a nice, naturally happy, positive person. If you have the right skills, but an unpleasant temperament, you do not get the job. The results speak for themselves: Southwest Airlines is the only large airline in the world that consistently turns a profit (many never do at all) and currently employs 30.000 people.
Leaders who know how to enjoy themselves and want others to do the same are another great asset, that helps create a happy atmosphere.
It doesn’t matter how much you enjoy what you do today. If you do the same tasks in the same way for a long time, sooner or later you will stop enjoying it. Learning is also important, so employees have the right skills – not just to do their job adequately, but to actively shine!
Rosenbluth International focused on learning from experienced employees, pairing each new hire with one of their best and most experienced employees for several days. Of course this gave the best employees less time to work and thus cost productivity, but the upside more than made up for that, since new employees quickly learned not from manuals but from real experiences and felt included and supported from day one.
3: Be open
In most companies, most information is secret and employees are told only what they “need to know???. Why not turn that upside down, and make all information available to people, excluding only that which explicitly needs to remain secret?
One approach to this is seen at Motek, which makes warehouse management software. They have an internal, company-wide to-do-list listing all major projects, to which all employees have access. In addition, Motek’s customers and supplies also have access to the same list. This open sharing of information means that Motek’s employees can make more and better decisions because they can get the information they need, resulting in happier more motivated people.
4: Share decisions
The more decisions that can be made by employees themselves, the better. The department store chain Nordstrom’s famously give their employees only one rule to live by:
Rule #1: In all situations, use your good judgment.
There will be no additional rules.
General Electrics employs well over 100.000 people in a wide variety of industries. Their top performing production plant, the one in Durham in North Carolina, is organized according to this principle. Their organization consists of 1 CEO, 15 self-managing production teams and various support functions (IT, finance, HR, etc).
There are no vice-presidents, middle managers, controllers, etc., leaving the production teams themselves responsible for quality, training, production planning, maintenance and more. The employees have shown themselves to be more then capable of that challenge, and new GE production plants will be organized according to this model.
5: Think and act long-term
Patagonia make outdoor wear and have committed themselves to longterm thinking. As an example, in 1996 they converted to using only organically grown cotton, out of concern for the huge amount of chemicals used in traditional cotton production. Organic cotton was then much more expensive and in very short supply, so on the surface this decision had the potential to hurt business. In order to make it work, Patagonia even had to support existing organic cotton farmers financially.
In addition, Patagonia has founded 1 Percent for the Planet, an organization of businesses who donate at least 1% of net sales to environmental organizations. This helps make employees proud of their workplace.
6: Care about people
Companies must care about their people. If they don’t feel that the company cares about them, then why should they care about the company?
One danish company, the IT service provider ServiceGruppen, even puts their employees above their customers. In one case, an employee was treated badly and insulted by a customer, following which management promptly terminated the contract with that customer.
Applying these six practices in your organization will lead to a happier workplace, and to the resulting benefits mentioned earlier. Not to mention the fact that you and others will be able to enjoy work more. Not bad, huh?
But where to start making you organization happy? Whatever you choose to do, do it simply. Do it:
- Now – today rather than tomorrow
- Easily – start with something you know you can do
- Lazily – start with 2 or 3 things, not 20 or 30.
- Fun – otherwise it won’t make you happy
Don’t set up committees to write white papers and reports. Just get to it. Happiness is something you and I create here and now. Once you’ve initiated some small, easy projects, evaluate them and see how they went. Use those experiences to do even more for the happiness at work.
Here are some easy places to start – things you can do right now at no cost:
- Praise – praising people takes no time and costs no money
- Listen – give your employees a chance to speak and listen to them
- Tell the good stories – start every department or group meeting with sharing good stories
Considering the evidence linking employee happiness and the bottom line, I’m frankly surprised that every company in the world hasn’t engaged in a high-profile, intensive effort to increase happiness. If I were a major stock-holder or board member of a business, my first question would be: “What are you doing about the employees’ happiness at work? How could you do even more.??? Simply because happiness is the best and fastest way to results!
Book: The Customer Comes Second by Hal Rosenbluth
Interview with CEO Yvon Chouinard
Studies about happiness at work and the bottom line
Linking Employee Satisfaction to the Bottom Line at ACNielsen
Job satisfaction affects the bottom line