Evans Incorporated

Does Investment in Happiness Have an ROI?



Should You Invest In Happiness?

By Emad Elias, PMP

Can a management consulting firm be in the business of making happiness? Evans Incorporated specializes in managing change effectively.  It’s no secret that, for most people, and for most organizations, change is difficult, and in the short term causes feelings other than happiness.


Thomas Jefferson is the one who inserted into the US Constitution that we have unalienable rights that include ‘the pursuit of happiness’, but he also said, “Our greatest happiness does not depend on the condition of life in which chance has placed us, but is always the result of a good conscience, good health, occupation, and freedom in all just pursuits.”

Have we forgotten how to be happy?  Is it like any other skill that we can cultivate like playing piano or driving a car?  The following strives to answer these questions!

What Do the Experts Say?

Dr. Daniel Gilbert, Ph.D., professor at Harvard and author of Stumbling on Happiness says that “people overestimate the extent to which both good and bad events will have on them in the future.”  They believe that if good things happen they will be ecstatic and that joy will last for a very long time.  And it works in the reverse as well.  In fact, people who go through severe trauma report they are more connected and integrated with other people, their surroundings, and their environment.  Experts say the key ingredients to happiness are being able to appropriately respond to adversity and a close and supportive family and/or friends.

Tim Kasser, Professor of Psychology at University of Tennessee, provides data that says in the last 50 years, growth in incomes in the U.S. has grown quite a lot and we are now about twice as wealthy as we were.  National surveys show, however, that over that same period of time, we are no any happier now than we were in 1950.  Once basic needs are met, no amount of money will cause happiness.

Take a look at the concept of the Hedonic Treadmill.  According to this theory, as a person makes more money, expectations and desires rise in tandem, which results in no permanent gain in happiness.  Does this mean we should not give raises to employees?  No, certainly not but perhaps we should think about how we might persuade people to find happiness with their work using things other than money.

We can break down peoples’ goals into two basic groups: Intrinsic goals and Extrinsic goals.  They are in opposition to each other.  People focused on extrinsic goals like rewards, making more money or attaining status report being less satisfied, feeling less purposeful, more depressed, more anxious, and having less vitality.  People focused on the intrinsic on the other hand, those goals that are inherently satisfying, and feed their psychological needs, break down this way: 1. Involves Personal Growth in a way that satisfies internal needs, 2. Involves relationships with people that allow them to feel valued, and, 3. Involves a desire to help others.

Are We a Happy World?

According to international happiness research, Japan is the least happy of the current industrialized nations.  Since World War II, they emphasized economic growth and prosperity so much that they forgot how to be happy.  In fact, they have a name for this: Karoshi.  Contrast Japan with the county of Bhutan. The government in this country to the south and west of China, has taken it upon themselves to create an environment where people can pursue happiness.  In fact, prosperity there is not measured as GDP or GNP, but GNH – Gross National Happiness.  People are encouraged to think rationally, holistically, and spiritually about each decision they make.  This is an experiment we can now follow to see the result.

Denmark, on the other hand, consistently ranks as the happiest nation on earth with its rich social life and high standard of living.  Why is this?  It seems to have much to do with more people living in ‘co-housing communities’ than in any other nation in the world.  Conclusions here might be that if people live and work more communally, they are more likely to switch from thinking more about what they don’t have, to thinking about what they DO have and how they can share it.

Does happiness lead to creativity?  Does it lead to higher productivity?  Does it lead to higher functioning?  Research indicates the answer to all of these questions is Yes according to a documentary called Happy directed by Roko Belic.

The happy secret to better work, according to Shawn Achor, is Positive Psychology.  According to Achor’s research at Harvard, much of the above is worthy of investment by today’s corporations worldwide.  For example, focus on extrinsic goals is predictive of only 10% of our long term happiness while focus on intrinsic goals is predictive of 90% of our long term happiness BUT is dependent on the way we process the world or the ‘lens’ through which we perceive things.  Why is this important?  Because every employer wants to know that each employee can consistently be successful and will provide a return on their investment.  Again, Achor’s research says that only 25% of job success is predicted by IQ, while 75% is predicted by the following:

  1. High levels of optimism,
  2. Strong social support, and;
  3. An ability to see stress as challenges vs. threats

Following this line of thinking then, in most countries, there is an accepted formula for happiness that goes something like this: Hard Work = Success = Happiness.  But the Hedonic Treadmill disputes this pervasively accepted formula we all seem to live by.  Happiness gets pushed over the cognitive horizon.  So what if the formula actually works in reverse?  What if investment in developing the skills to be happy leads to more creativity, more positivity?  Research from Achor shows that our brains are 31% more productive ‘at positive’.  Presumably, this would lead to Success, which would probably lead to Working Hard (except it might feel more like fun than work).

Now consider the work of Dan Ariely in Predictably Irrational where he makes the point that social contracts are stronger than market contracts.  For example, a daycare center decided to impose a $3 fine when parents were late picking up their children. Instead of encouraging them to be punctual, it had the opposite effect. Late pickups went through the roof. Why? Before the fine was imposed, there was a social contract between daycare staff and parents, who tried hard to be prompt and felt guilty if they weren’t. By imposing a fine, the center had inadvertently replaced social norms with market norms. Freed from feelings of guilt, parents frequently chose to be late and pay the fine — which was certainly not what the center had intended.

Change Management Approach to Happiness

At Evans Incorporated, change is our specialty. We have a deep appreciation for the challenges facing our clients, and a long track record of providing the tailored, people-centered solutions they need to achieve their change missions.  We have expertise across a wide variety of issues involving organizations, their people, processes and technology — and in particular, in the high stakes, complex field of change management that can impact any or all of these elements.  We have the experience and special mix of talent to know what to do be it a Results Only Work Environment or Theory X environment.

Leaders working in organizations need to focus more attention on developing practical happiness-enhancing practices to assist managers AND the front line to become more engaged in their work, experience meaning in their work, and experience positive emotions, thoughts, and images in relation to the work and work environment.  Traditional change management approaches (CAARMA) really do work to communicate the benefit of change and achieve organizational goals with the least risk.  These approaches, combined with effective performance management systems, will cause Happy High performers to grow in numbers.

Are Your People Happy?

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