Make Happiness Your Business

Happy business people celebrating success at company.

Photo by Gutesa/Shutterstock

Employees boost bottom line when work culture lightens up.

Jenn Lim is on a mission to change the world—one business at a time.

Jenn is the CEO and Chief Happiness Officer of Delivering Happiness, a company she co-founded with Zappos’ CEO Tony Hsieh. She describes her job in her bio as “what any CEO does in an organization—putting the people, resources and financing in place to create a sustainable company. The difference between a CEO and a CHO is that a CHO is doing it through the lens of happiness as a business model.”

And happiness, Jenn believes, is how she can help companies become more successful, achieve a larger purpose, and eventually energize the greater global community. A Berkeley graduate who rode the dot-com wave until it crashed, Jenn assumed a consulting role with the then-young Zappos, recently acquired by Amazon, but long lauded for its customer service and innovative culture. Jenn helped compile online retailer Zappos’ famous Culture Book, and helped Tony launch his own book chronicling the growth of Zappos, Delivering Happiness.

 “The premise is pretty simple,” Jenn says. “If you have happier employees, you’ll have happier customers and in the end you’ll actually have a more profitable and sustainable business. And as a larger footnote to that, you’re also bringing to the world more meaningful lives. More and more studies done by Harvard Business Review and The Economist are showing the economic value of happiness and how that translates into the workplace or organizational setting.”

Iconic sportswear company Patagonia is a case in point, with a culture that makes people feel good about what they do. The clothing company donates 1 percent of its sales to environmental causes, uses organic cotton and recycled polyester and offers paid internships for up to two months for employees to work for environmental organizations around the globe. The employees feel their work is more meaningful and customers are more apt to spend, knowing their money is going to a good cause.

Vincent Stanley, director of Patagonia philosophy and one of its first employees in 1973, says, “We had a major growth spurt during the recession. Part of that increase in sales we attribute to people in general spending less and wanting to spend what they did with a company they trusted. We have attracted that kind of customer.”

The notion of more meaningful work also hits home at Brown Paper Tickets, a Seattle ticketing company that donates 5 percent of profits from every ticket sold to causes chosen by each customer. The company offers its workers full medical benefits, free food delivered weekly to the office, and free parking or bus passes. In addition to a whopping six weeks of paid time off, employees get an extra week of “paid time on” annually to work for the nonprofit or cause of their choice. 

Barb Morgen, chief storyteller at Brown Paper Tickets, describes the culture as “reinventing capitalism.”

“The business philosophy invented and named ‘Not-Just-For-Profit’ in 2002 has resulted in growth and success so great that in recent years we have been ranked as high as the eighth largest primary ticketing company on earth,” she says. “We are  creating a new economic model for the 21st century—one that gives consumers everywhere a powerful choice” to encourage corporations to be better citizens in order to compete.

Translated into numbers, Barb says the employee retention rate is high—an average of three years on the job—and 88 percent of Brown Paper’s customers say the Not-Just-For-Profit angle is the No. 1 reason they are loyal.

Brown Paper Tickets’ worst year showed 35 percent growth with almost no marketing budget, she says. “We get occasional donations from people who fear that we don’t charge enough and want to make sure we stay in business.”

Less Turnover, Higher Productivity

How happiness affects the bottom line is a matter of ongoing dialogue—but most experts think companies with enlightened cultures have less employee turnover and higher productivity—which translates into better numbers.

A 2013 USA Today article by John Waggoner noted the same trend: “Companies on Fortune’s list of 100 Best Companies to Work For tend to have less employee turnover than average,” he wrote. “In information technology, an industry notorious for job-hopping, voluntary turnover is 5.9 percent at the companies on the list, vs. 14.4 percent industrywide. In professional services, turnover in the best places to work is 11.3 percent, vs. 24.7 percent industrywide.”

Patagonia’s Vincent says the company’s turnover rate is very low, and at an estimated $50,000 in training costs for new hires, that saves the company substantial money.

John also noted that companies with happy employees are less likely to strike or file class-action lawsuits. He wrote that “Publicly traded companies in the Fortune 100 Best Companies to Work For list have gained an average 10.8 percent a year [in stock value] since 1998, according to the Russell Investment Group.”

The idea of a happy business culture has been gaining U.S. traction for the past several years, the notion that a more social, employee-centric workplace tends to work better than the age-old cube farm, keep your head down and get it done model.

Leading with Positive Psychology

Today’s movement is partly based on the growth of positive psychology, according to one of its most vocal proponents, consultant Margaret H. Greenberg, who, with business partner Senia Maymin wrote Profit From the Positive: Proven Leadership Strategies to Boost Productivity and Transform Your Business.

Margaret says positive psychology gives equal time to the upbeat side of human behavior, examining resilience rather than dysfunction. It’s one of the research disciplines that help Margaret and Senia guide companies toward a more functional culture, one that might not feel like Pharrell Williams’ room-without-a-roof happy, but goes a long way toward maximizing employee well-being.

“The companies that really get it recognize that you as an employee will do your best work when your work is aligned with what you are passionate about and what your talents and strengths are about—rather than trying to force-fit people in a role,” Margaret says.

So what does a happy workplace look like?

Apple’s Cupertino, California, “spaceship” campus is synonymous with a new generation of corporate campuses. Zappos stresses “being true to your weird self.” Patagonia has onsite day care, free bikes and surf racks, liberal flex time (famously used when surf’s up) and more.

The news and technology website Business Insider recently reported that the team at Soma, a San Francisco company that makes water filtration systems, starts off the work day by sitting silently in a circle together for 15 minutes.

Mike Del Ponte, Soma’s co-founder and chief hydration officer, says “Our daily meditation has had an impact on each teammate individually, as well as our culture as a whole. As a company, it sets the tone for the vibe we want to have in the office: relaxed, thoughtful, and focused on health.”

This goes to show that all happy cultures are happy in their own way; there is no one element that can transform a beleaguered workplace to one with a more authentic and vibrant framework.

Communication and Core Values

Still, experts seem to agree that cultures that value happiness have a few common qualities. First, they are more in tune with their employees, and encourage more social engagement in and outside of work. It’s not about having Red Bull in the refrigerator or exercise balls instead of chairs or a basketball hoop in the lobby. “Happy” companies stress communication—and not just from the top down. They offer encouragement when things are going well but are just as committed to sharing the bad news in an effort to be transparent.

An example is the high-tech hardware and software firm Logitech, with offices in California and Switzerland, whose CEO

Bracken Darrell holds weekly informal “huddles” with employees to share news and company updates as they happen. Employees are encouraged to socialize and Bracken often mingles with employees.

"At Logitech we believe that despite our size and global footprint, cultivating a small-company culture is paramount,” says Karen Drosky, Logitech vice president of people and culture. “The small-company culture encourages collaboration and agility, resulting in an empowered and connected community."

Happy cultures connect people with jobs they care about and are good at and offer employees a way to grow with the company. Successful companies often follow a set of core values—determined by the employees themselves.

“Companies that get it right see their employees as precious as their customers,” Margaret says.

Jenn says it also has to do with a blurring of the lines between work and real life.

“Instead of work-life balance, we talk about work-life integration,” she says. “Why does it make sense to separate the two?... You create an environment where people want to connect in a more meaningful way. They are not showing up to talk to their co-workers; they are showing up to talk to their friends.”

Sometimes, the road to building a happy culture is a series of small and ordinary steps. Jenn recalls one company where one employee decided to bring in a blender and make a new flavor of smoothie she shared with her co-workers every Wednesday. Pretty soon the whole team was on board and contributing. Margaret says the Joie de Vivre hotel company has the “mistake of the month” club, which rewards innovation by applauding employees for situations in which what they learned from the mistake “outweighed the mistake itself.”

Sunnyvale, California-based product and strategy consultant Rashmi Menon, who has worked with teams at Yahoo and Zvents among others, likes her teams to have a lunch once a week during which no one is allowed to talk about work. “That helps people develop personal relationships on the team, and when you develop personal relationships, you are more likely to work smoothly together when things are not going well.”

EverFi builds its culture by mixing it up. Headquartered in Washington with offices in Boston, Chicago, San Francisco, and Toronto, this company—which creates online learning platforms for schools and organizations—shifts employee work locations every few months so whole teams are exposed to others working in other areas of the company. CEO Tom Davidson says changing the teams around means “you may sit next to the engineering team one week and be smack dab embedded in the middle of a development or sales team in another week,” forcing people to understand what goes on in other parts of the business.

Why It Matters

Margaret, Senia and Jenn all believe cultures can be changed. “There are things you can do from a structural perspective,” Jenn says, “in terms of how you create the culture you want to create. You can establish the framework, the processes, but all that only goes so far because when it really becomes alive is when people really take it in for themselves. Once they embody your values and your purpose that’s when the magic happens.

The Culture Book detailing Zappos’ core values became one of its many innovative ideas, and there was only one way to produce it: ask the employees. “[We had them] describe in two or three paragraphs what Zappos’ culture meant to them,” she says. “And we asked customers, partners and vendors to do the same thing. And we published it in a book, completely unedited.  What that meant was the good stuff was in there—but also the bad stuff.”

It is this kind of validation—as well as a shared vision of company purpose and practices—that may be the golden ticket to making a culture of happiness.

“There is an overarching sentiment of why happiness matters,” Jenn says. “[At Delivering Happiness], we see ourselves as a dot connector between all these different people and companies that believe in the same thing. In the ’80s, Apple had the whole ‘think different’ campaign. For us, it’s ‘work different.’ What we are seeing is that more and more people, from management to people working on the floor in customer service, are feeling the same way. We are nudging the world to a happier place—one person, one company, one community at a time.”

This article originally appeared in the June 2015 issue of Live Happy magazine.

 

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