Originally posted on Biztorming by Luciana Paulise

Google, Zappos and Virgin are convinced that happiness can change the world by improving profitability and employee performance at the same time. Do you want to know how?

The quality culture of happiness

In the 80’s Edwards Deming used to say that to achieve continuous improvement: “Management obligations include the following ingredient, I believe: Create a climate in which everyone may take pride and joy in his work”. When he was working for Ford, a cultural model of 14 principles based on three main goals was designed at the company. One of those goals was “Provide Employees an environment that encourages full use of their potential”, which would include 8 of the 14 principles.
Nowadays, Companies like Google, Zappos or Virgin showcase that whether you are an entrepreneur managing a startup, or a corporate executive with thousands of employees, if you keep your team members happy at work, they are better collaborators, work to common goals, and are more innovative. A Harvard Business Review research shows an average of 31% higher productivity, 37% higher sales, with creativity three times higher, which confirms Google, Zappos, Virgin and Deming are right.

On the other hand, according to the Forbes insights on Culture of Quality, instilling a culture of quality is “essential to the success of any quality program.”

The challenge is to find the best way to keep everyone on your team happy, productive and quality oriented.
Even though each company already have their own culture set up, no matter the size or industry, a new culture can be instilled in the long term if the day to day behaviors are changed accordingly. Tony Hsieh, Zappo’s CEO states that “Culture will happen regardless of whether you want it to or not, you just need to formalize and organize it. You just have to analyze what makes you unique, what you want to be known for, and what your ideal employee looks like.”
I found there are five basic decisions that can guide company owners in the right direction towards a “happiness culture”. It’s up to the owners to decide which way to go!
The five decisions are:

  1. Intrinsic vs. extrinsic motivation: Extrinsic motivators are usually money incentives based on performance. They lead an individual to act mainly for an external reward (pay). On the other hand, intrinsic motivation drives an individual to act (such as work or study) because it generates joy, self-satisfaction and happiness. Edwards Deming would say that extrinsic motivators like money rewards and carrot and stick incentives were not enough to motivate employees to work at their best. He insisted that intrinsic motivation was the key, and that people should be given a purpose to satisfy their psychological needs based on Abraham Maslow theory. Richard Branson at Virgin said in his blog What employees wellbeing means to me that “Flexible working encourages our staff to find a better balance between their work and private lives, and through this balance they become happier and more productive. At Pluralsight, a training company that applied Deming philosophies, they used to have only 10 days off on holidays. Now employees can take as many days off a year as they need, as vacation time is not tracked. There are only two rules: “be respectful” and “always act in Pluralsight’s best interest”. They eliminated extrinsic motivators like incentive pay for managers and commissions for salespeople, to focus on creating an environment where everybody wins.
  2. Long term vs. short term profit thinking: Companies that want to transform their culture undoubtedly need to have a long term view because cultural changes are slow. Management commitment is crucial to allocate resources through a sustained period of time even when changes will become evident later on. Thinking long term help employees prioritize quality, when fore example in the case of small business, employees tend to be always thinking in what needs to be done now, no matter how.
  3. Win-win mindset vs. win-lose: A Win – win scheme is perfect for a culture of happiness. Competence and rivalry brings sub optimization and frustration. In an “I win you lose” scheme everybody is losing, like in a divorce. Companies don’t have to focus on keeping happy only a few excellent employees, but making sure all the employees are happy because they can excel in what they do. In a win-win approach you don’t beat out a rival. He is doing his best, you’re doing yours, and you can all work together.
  4. We vs. Me organization: WE organizations promote more cooperation, less individualism and remove barriers to teamwork (like individual incentives). Everybody work as a unit to accomplish objectives rather than everybody off doing the very best they can do at whatever they do and not paying much attention to what the objectives are. Rewards will be greater for everyone, not just in money but in self-esteem and intrinsic motivation.For example, If I cut a piece of wood and it is too short or too long, others have to do more work. I may save a dollar to make it easier for me but it would be costing you 10 dollars. In a ME organization I should work to minimize loss for the system, I should spend 1 hour to make you save three hours. Toyota for example focus on team working and the evaluation is based on the group performance, so people want to share everything they know, they want to make sure everything they do is great to increase the total shared.
  5. Small continuous improvements from bottom up vs. breakthrough changes from top down: Psychologist Ron Friedman in his book “The best place to work” states that “smaller frequent positive feedback and rewards will keep people happy longer than a single large infrequent happy event. The small continuous improvement approach is not also good for employee’s motivation but also for dealing with a changing environment. For a small business, conducting small experiments without making massive investments is much more flexible and allows to deal with uncertainty and lack of resources, minimizing the expenditure of time, money and effort. It also generates an environment of experimentation without fear. At Toyota for example, the responsibility of the daily kaizen is led by those who are responsible for operations, instead of being the responsibility of a “quality department”. This is what I call “improvements from bottom up”, because employees are the ones proposing the changes.

Believe it or not, it is possible for employees in business, as well as entrepreneurs, to be both happy and productive. It is difficult to change a big organization but you can start small, in small continuous batches. Managers and directors are the first ones to change their minds. If they do, they will change their habits, and the rest of the employees will us follow their examples. Start up and entrepreneurial organizations can pick-up these new ideas naturally.
Happy employees lead to success, more than success leads to happiness. If you want to emulate Google’s success as a great place to work, and as a successful company, maybe it’s time to adopt a culture of happiness.

A quick piece of advice to start delivering a culture of happiness? Replace the “Employee of the month” award with a “Thank you” note.

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