Happiness White Paper...Brad Montgomery presents happiness at work keynotes and seminars where he teaches the business value of happiness, and then teaches specific skills and techniques

©Brad Montgomery, 2014 T: 303.691.0726 E: [email protected] W: www.bradmontgomery.com

www.Bradmontgomery.com 303.691.0726

!©Brad Montgomery, 2014

http://www.bradmontgomery.com

Happiness Pays. The Case for The Business Value of Happiness at Work.

A White Paper By Brad Montgomery, CSP !Executive Summary (Which is another phrase for, “Read this short bit and you can pretend you read it all.”) !Scientific research shows that unhappy employees cost the U.S.A. $500 billion/year. Unhappy people cost companies more than 25% of their total salary budget. Credible scientific studies reveal a surprisingly high financial benefit of happiness. !Happy people out perform their less happy counterparts. Period. Companies rarely invest adequately in their employee’s happiness. This error costs them millions. Credible research proves that we can improve our own happiness. It is a skill that can be broken down into parts; it can be taught and it can be learned. Organizations who invest in happiness create a win-win situaBradtion. Your people can be happier … And when they are happier, your profits will increase. !The value of happiness has been embraced by top corporations (e.g. Google), top academics (e.g. Harvard) and even countries (e.g. Australia.) !The point: Given that human capital is often a company’s most valuable and most expensive asset, it makes excellent business sense to invest in employee happiness and well-being. !Invest in happiness; it’s a no-brainer. !The subtext: Brad Montgomery (and his presentations) are a great way to start the transition to happiness at work.

©Brad Montgomery, 2014 | The Business Value of Happiness | BradMontgomery.com | page !2

!Your People Aren’t As Happy As You Think… And That’s Costing

You

!Happy workers impact the competitiveness, and ultimately, the success of any

organization. Workers who are happy are more productive and are less likely to leave their

jobs than their unhappy counterparts. Yet unhappy workers make up a significant part of

the workforce Globally, Gallup reports that only 13% of employees were “engaged” at

work this past year, or were “...psychologically committed to their jobs and likely to be

making positive contributions to their organization ”. In the U.S., only 30% of employees 1

were “engaged” at work and the associated loss in productivity is estimated to cost the

economy $450–$550 billion per year . Across the border in Canada, 31% of employed 2

workers, and 47% of employed workers under the age of 35, plan to search for another job

in 2014 . 3

!Ok, if you hate statistics as much as I do, you might need a nap. But did you catch the

word “billion” in there? Gallup says unhappy folks are costing the American economy

about $500 billion a year. Do I have your attention now? Get ready for another

bombshell. Seriously, put on your helmet…this stuff is amazing:

!Not convinced? Dr. Thomas Wright of Fordham University researched how happiness

impacts productivity. In a study of white-collar managers, Wright concludes that 10–20% of

the variance in job performance could be accounted for by employee happiness. He then

estimates that in a mid-size organization of 100 workers, an improvement in employee

happiness would result in an additional $650,000 of productive time per year. "To me,

that's a huge competitive advantage," said Wright . 4

!©Brad Montgomery, 2014 | The Business Value of Happiness | BradMontgomery.com | page !3

The Unhappiness Math:

100 workers? Unhappiness is costing you $650,000/year.

10 workers? Still costs you $65,000

1 worker? $6,500.

!Looking for a cheap competitive advantage? Get $6,500 more out of each of your workers

by investing in happiness.

!That was fun! Let’s do More Happiness Math! !If unhappy employees are 25% less productive , let's do the math to see what that’s 5

costing you. To quantify the costs, figure out what your total payroll costs are. Then multiply that number by 25% (0.25). That is what unhappiness is costing you just in payroll dollars. !(For the following example let's imagine your organization has 100 employees, each making $40k/year. Assume 10% quit due to unhappiness.) !Productivity Costs = Salary Costs / 4 Productivity Costs = $4 million / 4 = $1,000,000 !Unhappiness is costing you $1,000,000 in lost productivity !But there’s more to the unhappiness math than just productivity. Let’s look at turnover and hiring costs. The cost to replace an employee is higher than their salary . 6!Turnover costs = number of employees who quit/year x salary Turnover Costs = 10 people x $40k = $400,000 !Unhappiness is costing you $400,000 in turnover costs. !Unhappiness is costing you $1,400,000 in lost productivity and turnover costs. !Did you catch that? Even with some very conservative examples, the cost of unhappiness is shocking. But wait! There’s more…. !


Furthermore, unhappiness costs you in ways that are harder to measure: !Unhappy people are 19% less accurate than their happy counterparts. This increase in 7

mistakes results in greater rework costs, scrap and lost productivity. !Unhappy employees stink at customer service. This fact forces your customers to move to your competitors. !Unhappy employees are more demanding and complaining. They suck up time and money you could use more productively. !Not all unhappy people quit. Unhappy people who who stay in your company drag down their peers, disrupt workflow, damage morale, and generally bring people down. This has a negative effect on innovation, creativity, health, productivity, and accuracy. !For you fellow Right-Brained people: Much of unhappiness is measurable, and the costs are impressively high. (And when you add the not-easily-measured costs of unhappiness, the results are overwhelming.) When you crunch the numbers, it’s obvious that investing in happiness makes great business sense. !!!!Unhappiness costs. Happiness Pays.

!Too frequently organizations dismiss happiness and attitude as “soft skills.” This is a costly

mistake. “Research shows that when people work with a positive mindset, performance on

nearly every level – productivity, creativity, engagement – improve. ” Happiness increases 8

sales by 37%, productivity by 31% and accuracy on tasks by 19%. 9

!So, if you’re not interested in improved sales, productivity and accuracy stop reading now

and go back to your misery. If you are interested in greater profits read it again. Seriously,

read it again. What would it mean to you and your organization if your people were 31%


more productive? If they sold 37% more? Were 19% more accurate? Those numbers are

so fantastic they seem made up…but they aren’t. Check the references. (We did twice.)

!Sick days cost corporate America in lost productivity. Customer satisfaction drives profits.

Happiness improves them both . Happy people take fewer sick days than those people 10

who are more unhappy.

!What?! Are you kidding me? Happy people miss work less? Darn right. What would it

mean to you if you could decrease your organizations sick days by even a tiny

percentage? Big Dollars, that’s what.

!!Happiness is a skill that can be taught. And learned.

!Only 40–50% of an individual’s happiness is determined by genetic factors . Much 11

attention has been directed at how to nurture the remaining 50-60%, a focus of the positive

psychology movement. Positive psychology looks at what is good about the psyche, in

contrast to the discipline’s traditional emphasis on disorders. Positive psychology – or 12

happiness studies - has grown from relative obscurity to a well-established field of inquiry

in less than a decade and a half. Time magazine showcased the science of happiness in

2005, The Economist first featured an article on the topic a few years later, and the

Harvard Business Review dedicated an entire issue to happiness in 2012.

!Happiness can be influenced by thoughts and behaviors . 13

!Get it? We can be taught to be happier. Happiness is an attitude that can be broken

down into skills… Just like free throws with a basketball, shooting pool, and knitting. You


and your people can become happier with scientifically proven techniques. You and your

organization can be happier — and more profitable — through strategic thought and

activity.

!!Happiness is Turning Some (Prestigious) Heads

!Productivity of white collar workers increased by 10% after watching a comedy clip . 14

! I don’t know what is more amazing about this statistic; The fact that a YouTube clip

increases your job performance or that some prestigious scientists are studying the

business-value of a well-crafted Jerry Seinfeld routine. But hopefully you get the point:

happiness is earning a closer look from some very smart people.

!Increasingly businesses, and indeed entire nations, have been looking at happiness – or

what is known in academia as subjective well-being – as an important measure of the

welfare of individuals, organizations and nations.

!In 2012 a meeting was convened at the United Nations titled, ‘Happiness and Well-being:

Defining a New Economic Paradigm’, and world leaders in Europe and Asia have talked

about the importance of the concept. Led by such companies as Pfizer, General Electric,

Capital One and Google, being labeled one of “The 50 Happiest Companies in America ” 15

has proven to be more than prestigious; it’s become a mark of successful and profitable

investment in work culture.

!The Kingdom of Bhutan has started to measure Gross National Happiness as a measure

of the health and wealth of its country. 16


!Yeah, we know it … Bhutan is hardly a superpower. But it’s clear that investing,

measuring, and profiting from happiness is something that is gaining traction from Harvard

to Stanford, Google to General Electric, and from Bhutan to Boston.

!Organizations are beginning to take note that investing in happiness produces competitive

advantages. For instance, in 2009 the Australian government spent $1 million to deliver

happiness workshops to staff and teachers. In justifying the expense, a senior government

official emphasized that the workshops contributed to building an organization “…that is as

productive as it can be and as motivated as it can be” . 17

!In other words, "Happiness is imperative for productivity, retention and a company's

success ” Traditionally companies focus on improving their bottom line, and too 18

infrequently invest in their employee’s satisfaction, engagement and happiness. But

focusing on happiness is one of the most successful strategies for driving bottom line

results. “Profits don't drive happiness in companies, but happiness drives profits ”. 19

!Bottom Line: Given that human capital is often a company’s most valuable and

expensive asset, it makes good business sense to invest in employee happiness and well-

being.

!Ok! I’m convinced! Where do I start with Happiness at Work?

So glad you asked. Lets face it — the “soft” stuff is hard. But Brad makes the soft stuff

easy. Brad Montgomery presents happiness at work keynotes and seminars where he

teaches the business value of happiness, and then teaches specific skills and techniques

we can all use to be happier immediately. Brad also has ongoing programs to keep the

happiness-at-work concept going. Contact us now at 303.691.0726


www.BradMontgomery.com ©Brad Montgomery, 2014

!===

!About the Author:

Brad Montgomery, CSP, teaches people how to use happiness to boost productivity, creativity, innovation & profits. He turns typical meetings into transformational events using, the power of happiness. Oh, and he’s very funny.

Brad has transformed audiences in all 50 states and on four continents. His clients include Microsoft, Verizon, The FBI (yes, that FBI) the CIA (yes, that CIA) and the IRS (where he withheld 30% of his best strategies.)

Brad is a master presenter, and specializes in using uses humor, interactivity, sound, music and visuals to ignite audiences so that they can use happiness as a tool to improve their lives and their jobs. Other speakers TALK about happiness. But Brad SHOWS them how to harness the power of happiness in hands-on, experiences that they’ll remember and implement. It’s the difference between a “speech” and an “event.”Arrange to book Brad for your meeting or convention at

www.BradMontgomery.com!!


! Ray, Dec 27, 20131

� ‘Gallup...’.June 11, 20132

� ‘Canadians... ‘, Jan 23, 20143

! Thottam, Jan 9, 20054

! The numbers vary. Clearly unhappy workers are less productive. I’ve seen numbers from 20% 5

to 31%. To make the math easy — because that’s how I roll — I used 25%.

! True Cost of a Disgruntled or Disengaged Workforce, by Trevor Boggie Corporate Insights 6

2013

! Harvard Business Review Jan/Feb 20127

! Achor, S Harvard Jan/Feb 20128

! Achor, Hosie & Savatos, Boem & Lyubomirsky, Patterson, and Tsai.9

! Well-Being: Happiness and Productivity at Work10

! Lykken & Tellegen,1996; Røysamb et al. 2002, 2003; Stubbe et al. 2005; Nes et al. 200611

! Positive psychology was initially lead by Martin Seligman, a professor the University of 12

Pennsylvania and former head of the American Psychological Association

! Seligman, 2002, Lyubomirsky 200713

! An experiment by Dr. Andrew Oswald at the University of Warwick, 200914

! CareerBliss, a leading online career site15

! The Centre for Bhutan Studies & GNH Research16

! (‘Happiness…’, 2009)17

! Heidi Golledge, CEO of CareerBliss (‘Nominate...’, 2011)18

! Dr. Cathy Greenberg, who in co-authoring the book What Happy Companies Know: How the 19

New Science of Happiness Can Change Your Company for the Better St. Martin, 2006


References

!Achor, S. (2010) The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work. New York: Random House, Inc. !Achor, S. (June 23, 2011). The happiness dividend. Harvard Business Review Blog Network. Downloaded from http://blogs.hbr.org/2011/06/the-happiness-dividend/ on Jan 22, 2013 !Achor, S. (January-February, 2012). Positive intelligence. Harvard Business Review, 100-102. !Baker, D, Greenberg. C and Hemmingway, C.(2006). What Happy Companies Know: How the New Science of Happiness can Change Your Company for the Better. New Jersey: Pearson/Prentice Hall. !Boehm, J. K., & Lyubomirsky, S. (2008). Does happiness promote career success? Journal of Career Assessment, 16(1), 101-116. !Hosie, P.J. and Sevastos, P. (2009). Does the "happy-productive worker" thesis apply to managers? International Journal of Workplace Health Management, 2.2: 131-160. !Kaupins, G.E. (January 2012). Well-being: productivity and happiness at work. Choice, 49.5: 936.

!Lykken, D. (2000). Happiness: The Nature and Nurture of Joy and Contentment. New York: St.Martin’s Press, Inc. !Lykken D, and Tellegen A (1996) Happiness is a stochastic phenomenon. Journal of Psychological Science, 7:186–189 !Lyubomirsky, S. (2007). The How of Happiness: A Scientific Approach to Getting the Life You Want. New York: Penguin Press. !Nes RB, Røysamb E, Tambs K, Harris JR, Reichborn-Kjennerud T (2006) Subjective well-being: genetic and environmental contributions to stability and change. Journal of Psychological Medicine, 6(7):1033–104 !


Oswald, A.J., Proto, E. and Sgroi, Daniel. (2009). Happiness and productivity. University of Warwick. Coventry: United Kingdom !Patterson, M., Warr, P., West, M. (2004). Organizational climate and company productivity: The role of employee affect and employee level. Journal of Occupational and Organizational Psychology, 77:193-216 !Rao, S. S. (2010). Happiness at Work: Be Resilient, Motivated, and Successful-- No Matter What. New York: McGraw-Hill. !Ray, J. (December 27, 2013). Gallup's Top 10 World News Findings of 2013. Downloaded from http://www.gallup.com/poll/166619/gallup-top-world-news-findings-2013.aspx on January 25, 2013 !Robertson, I and Cooper, GL. (2011) Well-Being: Happiness and Productivity at Work. New York: Palgrave Macmillan. !Røysamb E, Harris JR, Magnus P, Vitterso J, Tambs K (2002) Subjective well-being. Sex-specific effects of genetic and environmental factors. Journal of Personality and Individual Differences, 32:211–223 !Røysamb E, Tambs K, Reichborn-Kjennerud T, Neale MC, Harris JR (2003) Happiness and health: environmental and genetic contributions to the relationship between subjective well-being, perceived health, and somatic illness. Journal of Personality and Social Psychology, 85:1136–1146 !Seligman, M. E. (2002). Authentic Happiness: Using the New Positive Psychology to Realize your Potential for Lasting Fulfillment. New York: Simon and Schuster. !St. Martin, T. (April 11, 2006). Work happy, work hard: Employee happiness often the key to company's productivity. Knight Ridder Tribune Business News, 1. !Stubbe JH, Posthuma D, Boomsma DI, de Geus EJC (2005) Heritability of life satisfaction in adults: A twin-family study. Journal of Psychological Medicine, 35:1581–1588 !Thottam, J. (January 9, 2005). Work: Thank God it’s Monday! Time Magazine. Downloaded from http://content.time.com/time/magazine/article/0,9171,1015878-1,00.html on January 25, 2014. !


Tsai, W-C., Chen, C-C., Liu, H-L. (2007). Test of a model linking employee positive moods and task performance. Journal of Applied Psychology, 92: 1570-1583. !Wallis, C. (January 17, 2005). The new science of happiness. Time Magazine. !‘Canadians Cautiously Optimistic About Job Market and Economy Heading into 2014‘. (January 23, 2014). Downloaded from http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=6402 on Jan 26, 2014 !‘Gallup Releases New Findings on the State of the American Workplace’ (June 11, 2013). Downloaded from http://thegallupblog.gallup.com/2013/06/gallup-releases-new-findings-on-state.html on January 26, 2014. !‘Happiness workshops cost govt. $1million’. (2009, Feb 25). AAP General News Wire. !‘Nominate your company for CareerBliss' happiest companies in America awards – 2012’. (November 3, 2011). Business Wire. !‘Productivity and workplace happiness‘. (August 2, 2010). Daily News.


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Happiness White Paper...Brad Montgomery presents happiness at work keynotes and seminars where he teaches the business value of happiness, and then teaches specific skills and techniques