Happiness and business – can they go together? Mention happiness in this context and the doubters are quick to speak up: “That’s just new-age nonsense,” or “Ultimately businesses just want to maximize their profits”. Yet it’s clear that happy people are more successful, more creative and significantly more resilient in times of change. It’s clear, too, that these days, leaders want to do far more than merely overcome challenges – they are looking for activities that stretch them as individuals and also deliver a measure of personal fulfillment. And this feeling of well-being isn’t generated by the external trappings – by sofas in the office, workplace yoga, money, or longer vacations. Happiness researcher Song Yan (Jacobs University) and HR consultant Carsten Wundrack (Egon Zehnder) take up the question of how business leaders can integrate the happiness factor in their cultural and leadership concepts, endorsing Erich Fromm’s assessment: “Happiness isn’t a gift from the gods but the product of an internal attitude.”
By Song Yan and Carsten Wundrack
For most people happiness is definitely something worth striving for – and yet that doesn’t stop them from approaching the concept with a good deal of skepticism. Due to culture-specific or societal factors the word can sometimes be loaded with not entirely positive semantic associations. In Germany, in particular, the word for happy – glücklich – can be literally translated as ‘fortunate’, and so, unlike the English word ‘happiness’, it tends to bring with it a nebulous suggestion of other-worldly forces at play, leading it to be associated either with unearned good luck – or with an excess of naivety: Striving for good fortune as a permanent condition appears ridiculous, unrealistic and futile. And so happiness is regarded with some suspicion, and taken seriously only as a momentary state of being.
In many other countries and cultures, though, happiness is understood, by contrast, as a feeling of subjective well-being – which makes it much more readily accepted as a standard parameter of everyday life. Even here, though, ‘happiness’ is always more than merely being content with one’s circumstances. It is that extra dose of positive energy that goes so much further than just lacking nothing or savoring a pleasurable state of material and spiritual excitation.
In the empirical research, the working definition of happiness has two components: it is a momentary state of emotional well-being, but also a lasting feeling of contentment, which can be a generalized sensation or can relate specifically to various significant areas of life. It therefore comprises both an affective, hedonist sensation and an evaluative level of satisfaction.
Happiness in science
Happiness may be widely perceived as primarily an intensive personal phenomenon, yet in many scientific disciplines – from psychology to economics – it has become a standard subject of investigation. As an economic factor it has long since found its way into political discourse – featuring in concepts such as Gross Happiness Product or Gross National Happiness (GNH). Investigating how this individual factor impacts businesses and business leadership might seem to be the logical and natural next step – and yet strangely, such investigations have largely failed to materialize or have lacked consistency in their implementation. Despite new findings from the relevant sciences, business administration and management theories have avoided or omitted this perspective. This is an error on their part – or, more positively, represents a tremendous reservoir of potential, and not just for research. Because, drawing on the latest findings of happiness research, we can set out on new and holistic pathways that will make the business as a whole more effective – while also generating higher levels of well-being, with all the positive impacts this entails: more success, stronger stability, improved productivity and greater agility – the last of these an invaluable commodity in complex times.
Happiness is, therefore, a strategic factor and a leadership concept that extends far beyond improving employee satisfaction via modern office designs, free meals, childcare facilities and other such material benefits.
Happiness and the VUCA world
That happiness is especially important for businesses in our present times is clear. In a world where volatility, uncertainty, complexity and ambiguity (VUCA) have become the new normal, long-established theories and strategies have reached the limits of their effectiveness. One-dimensional approaches and established solutions are no longer fit-for-purpose when it comes to tackling new and highly complex problems. The management toolbox of tried-and-trusted remedies has passed its sell-by date. Holistic approaches – once scorned – are rightly attracting renewed attention, because it is only by combining all our abilities and senses that we can develop and unleash the creative forces we need to take us forward in tough times.
Things are changing, and attitudes are changing, too: In the past, if a manager brought in a coach it was taken to mean that something was wrong. Today this is entirely routine – indeed positively fashionable. Where the debate about supposedly ‘soft factors’ was once regarded with some derision and dismissed as weakness, today there is increasing recognition that it is precisely these factors that drive innovation and underpin a company’s survival. Happiness is already a relevant and verifiable factor in everyday business life.
Happiness and the individual
From cognitive psychology we know that happy people are fundamentally more positive in their attitude, more tolerant, more open, and more solutions-focused, thinking beyond existing limitations and more creatively than others. They react more clearly to positive stimuli, develop higher levels of curiosity and actively expand their horizons. And it is precisely these qualities that are needed to break through the silo thinking that becomes ever more entrenched in some businesses when confronted with the turbulence and uncertainty of the digital age, and develop horizontally applicable solutions.
Happy people are more resilient, willing to change, motivated and creative than their standard counterparts. Which makes that supposedly ‘soft’ factor, happiness, a genuine hard factor in the daily battle for economic survival. Research has shown that people with higher happiness levels tend to focus their attention on positive stimuli and interpret things positively. In stress situations the sensation of happiness mobilizes them, providing the resources to tackle and overcome problems. Happiness therefore arms people against negative emotions, forges the strength for resilience and promotes solutions-oriented action. These are findings that business leaders need to be using to their advantage.
Happiness and the organization
The route to happiness in the business context is not necessarily determined by a specific organizational structure, as one might initially suppose – to assume that “flat hierarchies make happier managers” is an overly simplistic formula. The decisive factor here is the corporate culture. Even within a hierarchical organization there can be a culture of trust – and even within what are extremely democratic spaces, in formal terms, this culture of trust can be entirely absent. Happiness therefore arises independently of organizational structure. It might perhaps be encouraged, or limited, by this or that formal approach. But essentially this is about culture. And culture is deeply entwined with the potential of each individual manager. So we could say that identifying and developing potential is effectively the magic formula – the secret of happiness.
Happiness, potential and management development
People feel good, and can become happy employees, in companies where they can develop their intrinsic potential autonomously and can participate fully as individuals. This is about trust and operational freedom, about autonomy and creativity, about finding the point where business goals and personal motivations resonate. At this point the subject of happiness extends beyond potential to encompass the topic of management development. An organization which believes that a challenge doesn’t just have to be overcome, a job doesn’t just have to be done, but that an individual must be found for this task who brings to the table the competency, potential and motivation for precisely this role, will undoubtedly be more successful. An organization of this kind creates space for its best managers, enabling them to flourish. The individuals concerned benefit and so does the company. To that extent, organizational structure does have a part to play after all – albeit one that is effectively secondary to potential and management development, which in turn means that this structure needs to be extremely flexible.
Where competency, potential, motivation and the right challenge come together, happiness can arise. Of course we are focused solely on the professional perspective here: We would not presume to compare this happiness with the human happiness generated in families and relationships. And yet we all know how crucially important a fulfilling professional activity can be – not least for its positive influence on the private sphere.
Why we are going to need more happiness in the future
In times of global competition for top talents, happiness is also a contributory factor in employer branding – a phenomenon that should not be underestimated. Generation Y already makes considerable demands of its professional environment – and these demands are set to rise even higher with its successor, Generation Z. These new elites expect to encounter a holistic approach as a matter of course and expect companies to offer them a professional environment that is conducive to happiness.
As a strategic management factor, happiness is still a largely unknown and unfamiliar quantity for businesses. Yet the unequivocal, empirically verifiable results of research suggest that, integrated within the overall management concept, happiness represents a major new opportunity for businesses, especially in uncertain and complex times.
Leaders who learn to regard well-being and happiness as a core value and a major strategic factor, helping to increase the ‘happiness intelligence’ of their employees, are embarking on a course that will secure greater and more sustainable success for their business. To quote Erich Fromm: “Happiness isn’t a gift from the gods but the product of an internal attitude” – and that applies to companies and to their leaders in equal measure.
About the authors
Song Yan is Professor of Psychology at Jacobs University Bremen where happiness is one of her research specialisms. Her lectures offer insights not only into international research on this subject but also into the unique perspectives other cultures can provide. As a business and organizational psychologist she also tackles issues of intercultural management. In this role she advises globally active businesses and organizations – focusing in particular on her home country of China.
Carsten Wundrack started his career in the world of finance and has been focused on the topic of shareholder value ever since. Today he is passionate about his role as an HR consultant – heading up Egon Zehnder’s Chemical Industries Practice Group and its China Desk – and convinced that companies need to take a broader-based approach rather than focusing solely on growing numbers of key performance indicators.