When Sigmund Freud was asked what constitutes a successful life, he answered, “Lieben und arbiten”—love and work. Taking his concept into business, what constitutes a successful organization? The answer is, people who love their work and who love the organizations they work for. Business success depends on highly motivated employees. Highly motivated employees multiply in organizations whose missions, leaders, and inner workings provide profound meaning and inspiration.
Yet many companies plod along with uninspiring leaders and uninspired employees. Many companies provide little motivation or the wrong motivation. They make short-term decisions, undermining employee morale and the organization’s future. The worst of them stampede into the kind of misdeeds and corruption that have been trumpeted in many news stories. These ongoing corporate debacles have had devastating impacts on the people in the organizations and repercussions that ripple through society as a whole. The damage is more than economic. It is also the loss of public trust in business and its leaders. Consumers, regulators, and business leaders are searching for ways to change such unhappy behavior, which expresses itself in everything from dreary work for individuals to personal conflicts between individuals and teams to outright criminality by the organization as a whole.
My own half-century sojourn of inquiry, study, scholarship, and practice in business has led me to understand a compelling paradox. When business leaders focus strictly on the bottom line, they are more likely to misbehave in an effort to achieve results, and they are also less likely to achieve good results even if they do not misbehave. Business leaders who address more than the bottom line avoid ethical lapses and are also far more effective at maintaining healthy bottom lines. They make their organizations ones that employees are proud to be a part of. They make their organizations a positive part of the overall community.
Such exemplary leaders have similar attributes. Driven by character, great leaders create meaning and trust, hope and optimism— and results. Three authors—Dan Baker, Cathy Greenberg, and Collins Hemingway—have combined their considerable talents to write a book that describes how you can develop such capabilities for yourself and for employees at all levels within your organization. They show how “mastery of the softer side” of business—my own phrase for people skills, good taste, judgment, and character—can improve business performance. They give practical examples of how to develop such attributes and apply them in the many situations that businesspeople confront every day. What Happy Companies Know: How the New Science of Happiness Can Change Your Company for the Better examines the underlying motivations and psychologies of outstanding companies and demonstrates how those positive mindsets can take hold in other organizations to transform their character and their fortunes.
Together, the three authors—Baker, a medical psychologist and a pioneer in applied positive psychology; Greenberg, a former partner in two of the world’s largest consulting organizations, an anthropologist, and now a respected executive coach; and Hemingway, a seasoned business professional and author—show the enormous potential that comes when businesses, indeed all organizations, adopt a “happy” mindset. As they define it, happiness is a mature, considered, positive outlook coupled with a search for meaning and self-fulfillment, the same sense used by America’s founding fathers when they established a new country dedicated to “life, liberty, and the pursuit of happiness.” Happiness creates enormous potential such as that unleashed when companies switch from trying to fix what is wrong within their operations to discovering the possibilities that emerge from what is right within their operations.
For many decades, business schools and business organizations have focused on numbers-oriented disciplines, such things as production and finance and return on investment. The authors propose that the new science of happiness adds a missing dimension that enables organizations to fully realize their return on people— on their talents, their passion, their interests, their knowledge. Far from a frivolous or secondary concern, happiness is the secret sauce to success that so many businesses seek everywhere except within the human beings inside their walls.
Among the elements of the new science of happiness, first and foremost is positive psychology applied to organizations—the study of strengths, best practices, character, and virtue in an organizational setting. Bio-evolutionary theory provides new insight into why humans react as they do under stress and how proper leadership can alter human behavior from the most self-serving to the most civil, noble, and altruistic. From organizational development comes the application of appreciative inquiry, a process that delves into the question of what gives life to an organization.
Among many new psychological instruments are the Benchmark of Organizational Intelligence (BOEI), which gauges the emotional intelligence of an organization as a whole, and various motivational profiling tools that evaluate not only how people function in organizations but also why—and how people with differing motivations can learn to work harmoniously together. Also, the latest in neurology and a fascinating new science known as cardio-neurology show how the coherence generated by positive emotion and positive thought unleashes creativity and imagination in ways that dramatically improve personal health and corporate productivity.
Although covering these topics in depth, What Happy Companies Know is no dry scientific treatise or abstract psychological discourse. The new science of happiness is always presented in a lively discussion of the real things businesses do: the real-world concerns, the day-to-day emotions, the hard decisions, and the tough actions. Baker, Greenberg, and Hemingway, with unique yet interlocking skills, bring nearly 80 years of accumulated experience to guide the reader in understanding how to create a constructive corporate culture in meaningful, measurable, and practical ways.
What Happy Companies Know takes you on a journey that describes human behavior and how it typically manifests itself in business, describes how that behavior can be changed for the better, and culminates in numerous examples of how that better behavior leads to improved financial results. The early chapters explain the behavior of unhappy people and unhappy business cultures through examples, many of which are “ripped from the headlines.” Showing that reactive, short-term decision making is hard-wired into us as an early biological adaptation that kept us alive in a hostile physical world, the authors demonstrate how such fear-based behaviors cause disaster after disaster in modern business.
Succeeding chapters contrast the self-limiting nature of reflexive behaviors with a myriad of healthy and happy behaviors that successful companies exhibit in outperforming their more macho counterparts. Because happy companies work from the highest level of consciousness and cooperation, they show consistent patterns of innovation, creativity, and strong financial postings. Chapters 12 and 13 in particular provide the more rigorous data supporting the thesis that “happy” means profitable.
The authors show how the values, visions, ethics, and cultures of such businesses call upon what is best and highest in human conduct, what is most moral, and what most unlocks the creativity and talents of their employees. They show how to engage the “whole-brain” functions that are at the disposal of every person in every organization. From these examples, the book develops the principles, practices, and tools that enable every company to become a happy one.
Several years ago, I wrote that effective leaders understand that there is no difference between becoming an effective leader and becoming a fully integrated human being. What Happy Companies Know extends that idea to the entire organization. It demonstrates the power of an entire organization whose people have become fully integrated human beings working cooperatively. The authors demonstrate that the real power of good business goes beyond the creation of jobs, products and services, and consumer value. A happy company transforms its people in ways that benefit them as individuals and society as a whole.
Dr. Warren Bennis Distinguished Professor Marshall School of Business, University of Southern California