How Investing In Happiness Builds Better Businesses

Smiling businesswoman leading project meeting in office conference room

For employers only 

Fostering happiness in a business can be beneficial in many ways. Read Heikki Väänänen's article from Forbes to learn more.

When it comes to business, few things happen quickly. This being said, during the pandemic workplace habits and traditions were thrown out of the window. Businesses and industries with the old school ‘work hard, play hard’ values, began to show signs of cultural progress. Earlier this year, an employee of Clifford Chance, one of the oldest international law firms, submitted a manifesto detailing why they should hire a Chief Happiness Officer. This request is part of growing desire for businesses to feature happiness higher on their corporate agendas.

Today, according to LinkedIn, there are over 1,500 active CHOs working in organizations around the world. And while Google’s CHO has been in the role for over 12 years, most of these executives were appointed within the last five.

Considering the technology sector is still relatively young, it’s not surprising that it was one of the first industries to warm to the idea of hiring someone dedicated to happiness. In fact, when it comes to modernizing the workplace, and closing the gap between business and happiness, technology companies have long been regarded as catalysts. Offering great benefits, comfortable working environments, and flexible contracts, were among the many ways that Facebook, Twitter and Spotify initially attracted and retained talent.

So, when it comes to investing in happiness, what are the steps businesses can take to achieve all-round success?

Nurture a Workplace of Motivation and Engagement

The feeling of happiness has been inextricably linked with increased productivity, better communication (both internally and with customers), and a general sense of calmness in a workplace. Researchers have spent thousands of hours compiling comprehensive reports outlining these benefits. However, one particularly interesting correlation, documented in the 2009 book The Joy Of Work?, stated that companies with a higher than average employee happiness, exhibit greater financial performance and customer satisfaction.

It is this link between employee happiness and customer satisfaction, which is often overlooked. Ultimately, the end goal for businesses is to have happy, engaged customers that are not only happy to shop with you again, but even look forward to the experience.

But, if a business can’t keep its employees happy, what’s the likelihood they can keep their customers happy? First and foremost, businesses must work hard to build a happy workforce. Once cultivated, this will have a powerful domino effect. There is no doubt that employees who are happy are more willing and inclined to support, collaborate and share success with their co-workers and customers. A study by Kansas State University also found that, when people were happier, staff exhibited better decision-making skills which resulted in an increase in performance.

To help facilitate this chain reaction, and because happiness is subjective, businesses should begin by finding out what happiness looks like for their specific employees. Is it more social activities? Better facilities? Or greater opportunities for personal development? The chances are it will be a mix of these, but identifying how much importance is attributed to each factor, will certainly help expedite the process.

Securing this feedback doesn’t have to be a challenge either. For most businesses, simple things like employee engagement surveys, regular one-to-ones, and even exit interviews when employees choose to move on, are extremely valuable and relatively easy ways to ensure happiness within the organization is being measured.

Once companies have nailed employee satisfaction, customer satisfaction suddenly becomes a much easier and more manageable challenge to face. With half the battle won, business leaders will soon find that the happiness and satisfaction of both employees and customers, will create a continuous feedback loop. For example, alleviating workplace stressors will help ensure better customers satisfaction levels, which will ultimately improve the organization’s bottom line.

Make Happiness a KPI

It’s probably one of the most frequently used terms in business, Key Performance Indicators - or KPIs - are the means by which businesses measure the success of their activities. They say you can’t put a price on happiness, and while this is true, you can certainly measure it. When businesses talk about KPIs, generally they only think of budgets, revenues, and profits. It is only more recently that the idea of monitoring and incorporating customer sentiments and emotions into corporate strategy has really taken off.

Advances in technology have meant that we are now capable of collecting data on employee and customer happiness levels, and are able to set targets based on public benchmarks. This means that not only can businesses now incorporate happiness as a KPI, but they can actually see how they are doing in relation to their industry and competitors. For organizations with international offices, for example, it is imperative not to fall into the trap of “this works here so must therefore work globally”. We know that cultural differences exist, and it’s important not to ignore this variable when setting company-wide KPIs for happiness.

Just last month, the World Happiness Report was released, ranking happiness levels in 146 countries. For the fifth year in a row, Finland came out on top, ranking highly in categories such as ‘global patterns of balance in life’, ‘global patterns of peace with life’, and ‘global patterns of experiencing calmness’.

Much of Finland’s success in achieving this goal is down to the importance that employers place on happiness in the workplace. But, with that said, what makes people happy in Finland may not apply in other countries to the same degree.

Companies that operate in various countries, have a responsibility to ensure cultural differences are acknowledged as part of their KPI strategy. Different targets should be set for different regions. For example, in countries where statutory parental leave is low or non-existent, ensure that the company’s policy makes that a priority. Or in a country where vacation days are not mandatory, set that as a goal to ensure employees are not overworked.

Once individual KPIs are set based on region, overall happiness targets for the company as a whole can be set and monitored.

Encourage Collaboration and Experimentation

In the short-term, new ideas and focuses can be relatively easy to apply. For most of us, we’ve all experimented with new ways of working, only to find two weeks later we’ve reverted to our previous process. When it comes to happiness, the same logic applies. Fortunately, there are ways to ensure that it remains a central part of the business going forward.

While preferable, for some businesses appointing a specific person responsible for championing company happiness may not be possible. Instead, incorporating regular roundtable meetings and team discussions about nurturing workplace happiness and wellbeing, are great ways to stay on track. Being persistent and experimenting with initiatives, such as real-time feedback collection, changing policies to improve company culture, and improving processes with new technology, is another important element of boosting employee and customer happiness. Those that expect things to change overnight are often disappointed, but the first step on the road to change is always the most important.

Similarly, the power of communication cannot be underestimated, it is the channel through which businesses show employees and customers why they matter. Ultimately, making happiness last is all about ensuring it becomes synonymous with the company, and incorporating it into internal and external communication is an extremely important part of this. To reinforce this, ensuring that happiness is overtly and subconsciously communicated in newsletters, advertisements and marketing material, is an important step in fostering a company culture focussed on happiness.

In truth, there are a myriad of activities, strategies, and methods that businesses can adopt to help activate happiness. However, starting with the components laid out above is a quick way to begin the journey, and will form the foundations upon which organizations and leaders can bridge the gap between happiness and business.

 

This article was written by Heikki Väänänen from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.