‘Happy companies’ – culture innovators going back to the roots This is a story about workplace happiness Main point of this story: If you are looking for a great place to spend your working hours, pay attention to the few ones focusing on happiness. In 1917, the founder of Forbes magazine wrote “Business was originated to produce happiness, not to pile up millions. Too many so-called "successful" men are making business an end and aim in itself.” Dalai Lama sais: “I believe that the very purpose of life is to be happy. From the very core of our being, we desire contentment. In my own very limited experience I have found that the more we care for the happiness of others, the greater our own sense of well-being.” http://upload. wikimedia.org /wikipedia/co mmons/e/ec/ Bertie_Charle s_Forbes.jpg http://upload. wikimedia.org /wikipedia/en /e/ee/The_Art _of_Happines s.jpg Let’s look at happy companies, having both success and radical culture • Google. Founded 1998 by Larry Page and Sergey Brin. 52,000 thousand employees. Fortune magazine names Google the 2014 “Best company to work for” • Zappos. Shoes online. Founded 1999 with Tony Hsieh as CEO since early days. 1400 employees. Culture advisor for HP, Hilton, … • Patagonia. Outdoor clothes and gear. Founded 1972 by Yvon Chouinard. 1300 employees. CSR advisor for Walmart, Levi’s, … • SAS. Business analytics software. Founded 1976 by Jim Goodnight. 14,000 employees. SAS ranks No. 2 on 2014 Fortune list of Best Companies to Work For in the US, after Google. 37 consecutive years of record earnings, with no layoffs during downturn. Logo Logo Logo Logo Google’s history and intentions • Larry Page and Sergey Brin did not want the traditional culture of “greed is good” of 1980’s. Envisioned Googleplex, a “college campus” where the brightest could brainstorm and collaborate on ideas that would change the world. To attract the best talents, needed to provide environment where you had fun, could dram big and get rewarded for hard work. • Larry Page: By tackling big ideas that “could really change the world”, you attract incredible smart people and achieve something worthwhile. (Google Faculty Summit, 2009) • Mission: “Organize the world’s information and make it universally accessible and useful” • Values, or “10 things we know to be true”, examples: “Focus on the user and all else will follow”. “You can make money without doing evil”. “You can be serious without a suit”. “Work should be challenging, and the challenge should be fun” • Eric Schmitt, former CEO: “fun is good”. “We realize and celebrate that our employees have diverse needs, requiring flexible and individual support. A customized program. “Programmers want to program, not do laundry” • Chief Culture Czar, Stacy Sullivan, is devoted to one thing: making Googlers happy Google’s happiness activities • Innovative benefits – Can bring pets to work. Free on-site: doctor, child care, bike repair, laundry, gym, massage, haircuts, carwash – Free food – Napping pods – Death benefit • Offices with themes. Eco-friendly HQ • Flexibility: Allows 20% to be spent on own projects. Opportunity to pursue ideas. Feels freedom to explore. Employees operate with freedom, controlling own time • Teamwork is central. No hierarchy, tiny independent work groups Google’s happiness activities • Transparent: Weekly all-hands meeting, Googlers can ask Larry and Sergey questions. • Social: Offices and cafees are designed to encourage interaction • Ethical: Only relevant ads. Text ads, to not interfere. Ads labeled “Sponsored link”. Not possible to buy search results. • Google.org: Philantropic organization aimed at finding solutions to some of the global problems facing the world today. • 97% of employees feel good about how google gives back to ghe community. Same number say management is honest and ethical • Gift matching program up to 3000 USD per year, for non-profit organizations • Donates USD50 for every five hours a Googler volunteer. Gave 100 MUSD in grants 2012 • Gave 1 BUSD in free and discounted ads in 2012 • Search Inside Yourself, a mindfulness meditation program, has been attended by thousands of employees Zappos’ history and intentions • “I just didn’t look forward to going to the office. The passion and excitement were no longer there. That’s kind of a weird feeling for me because this was a company I co-founded, and if I was feeling that way, how must the other employees feel? That’s actually why we ended up selling the company. • Financially, it meant I didn’t have to work again if I didn’t want to. So that was the lens through which I was looking at things. It’s basically asking the question, what would you want to do if you won the lottery? For me, I didn’t want to be part of a company where I dreaded going into the office. • So when I joined Zappos about a year later, I wanted to make sure that I didn’t make the same mistake that I had made at LinkExchange, in terms of the company culture going downhill. So for us, at Zappos, we really view culture as our No. 1 priority. • About five years ago, we formalized the definition of our culture into 10 core values. We wanted to come up with committable core values, meaning that we would actually be willing to hire and fire people based on those values, regardless of their individual job performance. Given that criteria, it’s actually pretty tough to come up with core values. • I think of myself less as a leader, and more of being almost an architect of an environment that enables employees to come up with their own ideas, and where employees can grow the culture and evolve it over time, so it’s not me having a vision of “This is our culture.” • Maybe an analogy is, if you think of the employees and culture as plants growing, I’m not trying to be the biggest plant for them to aspire to. I’m more trying to architect the greenhouse where they can all flourish and grow. • For example, for our offices in Las Vegas, it’s a big building. We’ve probably got 700 employees in Vegas. The previous tenants had multiple doors where you can exit, and the parking lot is in the back. We made the decision to actually lock all the doors so everyone has to go through the front-entrance reception area, even though that means you might have to walk all the way around the building. The reason for that is to create this kind of central hub that everyone has to pass through to help build community and culture. • And the free lunch we provide for employees is really meant less as a benefit in terms of a free lunch, and more to get employees to interact with each other. But most of the stuff that happens in our office is really about some employee coming up with an idea and, whether it’s me or other managers, saying, “If you’re passionate about it, just run with it.” • At some point, it kind of just snowballs, because once employees see other employees just doing stuff, then that lets them feel like they have more permission to run with their ideas. http://www.nytimes.com/2010/01/10/business/10corner.html?pagewanted=all&_r=0 Zappos’ history and intentions • When Zappos first started, the main idea was, "Let's sell a lot of shoes and be number one in that market." We did that for the first few years, and then we all sat around one day and asked ourselves, "What do we want to be when we grow up? Do we just want to be about shoes or do we want to be about something more meaningful?” • We decided that we wanted the Zappos brand to be about the best customer service. The initial motivation was that we could sell more items beyond shoes, but a funny thing happened. We learned that having a higher purpose, which is not just about making the most profit, is actually good for business. Employees were happier and vendors came to visit more. • We also went through a process of asking our employees what our core ten committable values should be, and we developed them through a yearlong process. We actually hire and fire people based on these core values. As an example, one of our core values is to be humble. If someone applies who is really smart, talented and experienced, even if they could make an immediate impact to our bottom line, if the person is egotistical, we will not hire him or her; it's not even a question. • Pretty much all the research shows that people are bad at predicting what will actually make them happy. They tend to think, "when I get x" or "when I achieve x" then I will be happy. The research shows that the most enduring happiness comes when you are a part of something bigger than yourself. • What ties everything together and really helps us achieve our greater purpose is that Zappos is about delivering happiness, whether it is to customers, employees, or spreading the gospel of the science of happiness. • And that can exist within a large corporate, growing organization? • Yeah, and I would say that is our greater purpose. It is not just about Zappos or our employees being happy; it is really about spreading happiness throughout the world. • And was there something in your life that initiated this interest or was it a gradual process of coming to this? • I think that it was a combination of a gradual process and after selling LinkExchange, I didn't have to work any more, which forced me to think, "What do I really want to do?" Because it seemed kind of pointless to start another company just to make money. • http://www.huffingtonpost.com/soren-gordhamer/my-interview-with-zappos_b_308852.html Zappos’ history and intentions • “If you really just think about how to make customers happy and how to make employees happy, that actually in today’s world ends up being good for business.” • “Zappos is a customer service company that just happens to sell shoes.” • “There are companies that focus on work-life separation or work-life balance and at Zappos we really focus on work-life integration and at the end of the day it’s just life…..and especially if you spend so much time at work you better enjoy the time that you’re spending there and people that you’re with….” • According to Hsieh, they’ll ask at least one question for each value. For example, one of Zappos’s values is “Create fun and a little weirdness.” So they ask the candidate: “On a scale of 1-10 how weird are you?” • Even if a person is great at their job, even if they’re a superstar at their job if they’re bad for our culture we’ll fire them for that reason alone. And performance reviews are 50% based on whether you’re living and inspiring the Zappos culture in others.” Zappos’ history and intentions • “Your number-one goal really shouldn’t be money. It should be something you are passionate about, something that has meaning. Then the money will follow. I like to say, Chase the vision, not the money. That’s why I wrote Delivering Happiness: A Path to Profits, Passion, and Purpose. It shares a lot of the lessons I’ve learned so everyone can make their workplace happier and, in turn, profitable.” http://www.forbes.com/2010/07/01/tony-hsieh-zappos-leadership- managing-interview.html • Virgin Group recently asked Hsieh to come in for a visit so they could pick his brain. His advice? “Chase the vision,” he told them. “The money and profits will come.” http://www.forbes.com/forbes/2008/0602/078.html Zappos’ values Zappos’ happiness activities • Sense of progress: Badges frequently instead of promotions infrequently • Events, family culture • Fun and weirdness • Nap room • Free to give gift of 50 USD to coworker • Introducing holocrazy as management system, increasing autonomy and freedom Zappos’ happiness activities • One of our teams — the outdoor team in our merchandising department — decided to decorate one of the conference rooms, and transform it so that when you’re inside, you feel like you’re in a log cabin. They spent the weekend tearing up the floors and putting in a fake fire and all this stuff. It was pretty cool. • But then, the week after, the team sitting next to them said, we can outdo them. The next thing we knew, within two or three months, all 20 or so conference rooms were all decorated by different teams. http://www.nytimes.com/2010/01/10/busines s/10corner.html?pagewanted=all&_r=0 Zappos activities • Zappos is all about happiness – happy employees and happy customers. Hsieh himself has studied a lot about what makes people happy. He says these four attributes are key: – Perceived Control – People don’t want to feel like they’ve lost control – Perceived Progress – People need to feel like they’re making progress – Connectedness – Having strong social ties – Vision/Meaning – Being part of something bigger than yourself A Zappos office Patagonia’s history and intentions • A more systemic transformation of the company began in 1991, after a sudden slowdown following years of overambitious growth threw Patagonia into turmoil. • The company was forced to make its first ever layoffs, of 120 employees, one-fifth of its workforce. Chouinard began to wonder whether he should stay in the game at all. • He went to famed consultant Dr. Michael Kami, who recommended that Chouinard sell Patagonia for $100 million and just use the proceeds to do environmental good. "I seriously considered it," says Chouinard. "But I'd made the same mistakes every other company makes. I decided the best thing I could do was to get profitable again, live a more examined corporate life and influence other companies to do the same.”http://www.inc.com/magazine/201303/liz-welch/the- way-i-work-yvon-chouinard-patagonia.html#ixzz38lrS9tcL Patagonia’s history and intentions • Yvon Chouinard: "I never even wanted to be in business," he says. "But I hang onto Patagonia because it's my resource to do something good. It's a way to demonstrate that corporations can lead examined lives. http://m.europe.wsj.com/articles/SB10001424052702303513404577352221465986612?mo bile=y • We asked Chouinard what he thinks his legacy will be—turns out he "couldn't really care less." But we speculate it will be measured not by what he encourages (be in nature, be personally responsible, simplify) but by what he discourages (buying, spending, polluting). In short, Chouinard wants us to stop being consumers and start being thoughtful global citizens. • In the '70s there was a thing around that “he who dies with the most toys wins.” http://magazine.good.is/articles/six-things-we-learned-from-patagonia-s-founder- yvon-chouinard • Today, Chouinard, 70, defines the company's mission in purely eco-driven terms: "to use business to inspire and implement solutions to the environmental crisis.” • Patagonia now exists to put into practice all the things that smart people are saying we have to do not only to save the planet but to save the economyhttp://m.fastcompany.com/1298102/patagonia%E2%80%99s-founder-why- there%E2%80%99s-%E2%80%9Cno-such-thing-sustainability%E2%80%9D Patagonia’s history and intentions • It's not just the marketplace Chouinard is affecting—it's the workplace. His flex-time policies allow workers to come and go whenever they want—say, when waves are high at the nearby surf point—as long as deadlines are met. There's a yoga room available any time of day (I walked in on the head menswear designer meditating there at around 11 a.m. on a Tuesday.) At the prodding of Chouinard's wife, Malinda, Patagonia was one of the first companies in California to provide on-site, subsidized day care. Even the chief bean counter, COO and CFO Rose Marcario, seems spiritually fulfilled. In previous jobs at other companies, she says, "I might have looked for ways to defer taxes in the Cayman Islands. Here, we are proud to pay our fair share of taxes. It's a different philosophy. My life is more integrated with my work because I'm trying to stay true to the same values in both.” • But after hanging out with him for a while, you begin to glimpse what stokes his fires. It's not being indoors—you get the sense that he's not entirely comfortable under a roof. It's not technology—he neither has a cell phone nor uses a computer. And it's not luxury—he drives a beat-up Subaru wagon with 95,000 miles on it. • I hate the idea of managing people. I don't like people telling me what to do, so I can't stand to tell other people what to do. I purposely try to hire people who are really self-motivated and good at what they do, and then I just leave them alone. • When I am sitting in the water facing Antarctica, waiting for a wave, it opens up my mind. • http://www.inc.com/magazine/201303/liz-welch/the-way-i-work-yvon-chouinard- patagonia.html#ixzz38lrS9tcL Patagonia’s happiness activities • Chouinard: I wrote my first book, Let My People Go Surfing, for my employees. It's about the history of the company and our philosophy. We used to do five-day courses with 15 employees at a time, and I would talk about why we do things the way we do. It got too time-consuming as we grew. So people get a copy when they start working here. • We also have on-site child care for our employees. That was my wife Malinda's idea, and it was radical when we first introduced it, in 1981. It really does take a village to raise a child, and we don't live in villages anymore. So companies need to be more like villages. I think the kids who come out of here are Patagonia's best products. • As a company, we've made a contract with our customers to make clothing as responsibly as possible. That includes asking customers to think twice before they buy anything. Do you really need it, or do you just want it? • We're producing a series of videos to show customers how to fix things themselves. We're even going to make a little sewing kit. We want people to feel like that jacket is something they're going to have the rest of their lives. And if it does get worn out, send it back to us, and we'll use it for something else. We want to close that loop between consuming and discarding. Patagonia’s happiness activities • Back in 1970, Milton Friedman wrote a legendary essay for the "New York Times Magazine" titled "The Social Responsibility of Business Is to Increase Its Profits." Friedman pooh-poohed companies' charitable efforts, arguing that it's the sole duty of a business executive to maximize profits for shareholders. If executives wish to do good, they are free to plow their salaries into charitable works. The company itself has no special competence in good-deed doing and should stay well clear of the game. • But corporate social responsibility (or CSR, as it's known in business-school parlance) often gets treated as a cute sideshow. It's a minor penance, used by giant companies to shape their public images, or to salve the consciences of their higher-ups. • Yes, Patagonia takes part in some traditional corporate social responsibility—since 1985 it has given 1 percent of revenue (sales, not profit), totaling $41.5 million, to grassroots environmental organizations. Over the years it has convinced 1,400 other companies worldwide to join this "1% for the Planet" initiative. But Chouinard argues this is merely a tithe—he refers to it as an Earth tax. • http://www.inc.com/magazine/201303/liz-welch/the-way-i-work-yvon-chouinard- patagonia.html#ixzz38lrS9tcL SAS’ history and intentions • In the mid-1970s, Jim Goodnight had a dream: Start a technology company that treated workers as its most valuable asset. • The first time Goodnight programmed a computer, as a college junior at North Carolina State University, he found profound joy in the accomplishment. He knew he was developing software that other people would use and benefit from, and it gave him a terrific feeling. • In that moment, Goodnight intuited that everyone thrived on doing significant things, and from knowing their work had inherent value. And ever since, he’s seen it as his role to ensure his employees take great pride of ownership in all the work they do knowing “what they produce will be used all over the world, by people all over the world.” • SAS CEO Jim Goodnight firmly believes that happy employees create happy customers. “In our industry, rapid innovation and extreme customer care are essential,” said Goodnight. “The best way to make that happen is by supporting people. We have spent decades perfecting a culture and work environment that encourages creativity by addressing the day-to-day stresses and concerns that employees inevitably bring to work.” http://www.sas.com/en_us/news/press-releases/2014/january/great-workplace-US-Fortune- 2014.html • “To a programming person, someone who writes programs, the challenge of the job is the most important thing – I think money ranks second or third but challenging work is what everyone ranks first.” • http://www.forbes.com/sites/peterhigh/2014/05/12/an-interview-with-the-godfather-of-data- analytics-sass-jim-goodnight/ • At 70 years old, Goodnight holds the conviction that “what makes his organization work are the new ideas that come out of his employee’s brains.” SAS’ happiness activities Benefits • Even the company’s onsite healthcare program — its most costly perk — saves money by increasing productivity. Doctors’ appointments are free (there isn’t even a billing department), which makes workers more likely to seek out help for a problem before it gets worse, and thus more expensive to treat. Since the clinic is located on campus, employees don’t waste time driving to office visits. • Employees have unlimited sick days, but on average they take only two a year. • SAS employees, and their families, have free access to a massive gymnasium featuring tennis and basketball courts, a weight room, and a heated pool. An on- site health care clinic, staffed by physicians, nutritionists, physical therapists, and psychologists also is entirely free. Deeply discounted child care is available, in addition to no-cost “work-life” counseling which helps employees more effectively manage the stresses of everyday life. And, of course, common work areas are routinely filled with snacks and treats. • SAS goes to great lengths to ensure employees understand how they make a difference. SAS’ happiness activities • By the late 1990s, SAS was the largest privately held software company.[20 • SAS has a limited corporate hierarchy and an egalitarian culture. There are no special offices, reserved parking or special eating areas for executives. As the company grew it created new divisions, instead of layers of management, creating a flat, simple organizational structure. According to professor Jeffrey Pfeffer from Stanford, there are only three levels in the organization and CEO Jim Goodnight has 27 people who directly report to him. The organizational structure is fluid and employees can change roles rapidly. • Employees are given a large extent of autonomy and developers are encouraged to pursue experimental product ideas. • Employees are encouraged to do volunteer work and the company makes donation to non-profits where employees are involved. The company primarily focuses its philanthropic efforts on improving education. http://en.wikipedia.org/wiki/SAS_Institute Moral of story: Focus on happiness, and business success will follow as byproduct Good for workplace happiness: (based on wisdom religions and research on happiness, and example companies) • Focus on the well-being of others, including all living beings • We are social animals • Act with meaning/purpose • Honesty lasts, be transparent • Use full potential, the sweet spot of challenge vs skill (eg creativity) • Cater for a sense of progress, personal growth, and mastery • A pleasurable work environment stimulates the brain, eg nature-like, light, colorful, fun • Physical exercise releases endorphins • Mental well-being is a skill, e.g. mindfulness meditation • Work-life integration reduce frustration • Make room for expressing and celebrating individuality Bad for workplace happiness: • Focus primarily on financials • Short-term objectives from shareholders • … END firstname.lastname@example.org Appendix • In 2010, the Harvard Business Review defined workplace wellness as “an organized, employer- sponsored program that is designed to support employees (and, sometimes, their families) as they adopt and sustain behaviors that reduce health risks, improve quality of life, enhance personal effectiveness and benefit the organization’s bottom line.” These types of programs take many forms, but they all recognize and incorporate the same core principles.