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Don’t Worry, Be Happy: Your Business Will Thank You

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At Angie Herbers Inc., we’ve known for a long time that happy employees are much better employees. In fact, that’s the basis for our practice management program, P4. The data from our client companies show that happy employees not only are more productive, work more hours and have less turnover; the firms they work for are more successful, too. Still, it’s always nice to get outside confirmation that we’re on the right track.

As part of my ongoing efforts to keep up with innovative thinking in business management, I recently came across a book titled “The Happiness Advantage” by Shawn Achor, a former Harvard lecturer and researcher who currently teaches at the Wharton Business School, and is working on research projects at both Yale andColumbia. Through his business consulting firm, Good Think Inc., Achor is one of the foremost spokespersons for the field of “positive psychology”: that is, the science of how happiness affects people’s lives. What he and other researchers have found is that happy people are more energetic, productive, healthier and, well, happier. We also have far greater control over our own happiness than most people think.

In 2011, Achor spoke at a  TED event in Bloomington, Ind., where he discussed the benefits of being happy, which admittedly doesn’t take much of a sales pitch. Still, some of the findings he presented were surprising. For instance, one study from the 1930s that focused on nuns (whom Achor points out are ideal study subjects as they live in a very controlled environment and you don’t have to pay them much) found that only 15% of the least happy nuns (as determined from writings in their journals) lived to age 94, while some 54% of the happy nuns reached that age.

He had other examples, but I’m just going to assume that you’re sold on the fact that it’s better to be happy than unhappy on a personal level. What about on a business level, though? Are happy employees really better employees? Achor pointed to a large and growing body of research that answers with a resounding “yes.” Studies show that when we are happy, our brains perform significantly better—intelligence increases, creativity increases, energy levels increase—than when we are unhappy, neutral or stressed. “We found that when people are happy, every business outcome improves,” he said. “People are better at getting good jobs, keeping their jobs, producing more, are more resilient to setbacks, have less burnout, less turnover and are more successful.”

OK, so, not only is it better to be happy, but businesses are more successful when their employees are happy. That raises the question: Why aren’t we all happier? According to Achor, the problem is that most of us have gotten the success/happiness formula backward. That is, we believe that if we were only more successful—make more money, get a promotion, a better car, a big house, a lower golf score—then we’d be happy. And it’s true, we will be—but only for a little while. Then our brains will reset our success bar—a better job, even more money, a bigger house, etc.—and we’re back to being unhappy again.

Achor says we need to reverse that equation: If we were only happier, then we’d be more successful. And in fact, that is the case: Only 25% of job success can be predicted by a person’s IQ. The other 75% can be predicted by looking at how optimistic we are, how much social support we have, and by our ability to see challenges as opportunities. So how do we stop worrying and get happy?

Achor’s prescription is based on human brain physiology: When we’re happy, we produce a hormone called dopamine, which is also a neurotransmitter. Not only does dopamine make us feel better, it stimulates the learning centers in the brain. The good news is that it doesn’t take much to get the brain to produce dopamine, so that a very simple action, such as smiling, can yield substantial results. What’s more, it turns out that rewiring our brains so that actions become habits is also relatively simple: By repeating an action once a day for just 21 days, we can make it a habit, which we’ll then accept as the normal thing to do.

By combining these two views of how our brains work, according to Achor, we can literally reprogram our brains to naturally do things that will make us happy. Not surprisingly, he’s created a simple five-step program for people to do just that. The five actions that he suggests people do every day to become happy and stay that way are: “three gratitudes,” journaling, exercise, meditation and random acts of kindness.

First, he suggests people start doing these things one at a time, taking at least 21 days to make each one a habit before starting on the next one. Then, keep them as simple as possible.

The three gratitudes, for instance, is a process of thinking of three things you’re grateful for at the end of each day. It’s best, he says, to make them as specific as possible. Rather than “I’m grateful for my job,” it’s more meaningful to say, “I’m grateful for the opportunity to help X client today.”

Journaling is writing down one positive experience that you’ve had in the past 24 hours. Again, the more specific the better.

Exercise is some form of physical exertion for at least 10 minutes each day. Of course you can do more, but for happiness purposes, the idea is to get the blood and the dopamine flowing.

Meditation is at least two minutes of just sitting quietly. The idea here is to give your mind and your body a chance to let go of stress (See “Stress Fracture,” Investment Advisor, November 2012) and relax—to reset at a lower stress level that will allow you to get back to being happy sooner—and focus better on what needs to be done.

Finally, a random act of kindness shouldn’t be something onerous like pushing a car out of a ditch or rescuing a stray dog. Achor suggests something simple, such as one kind email to one of your friends every day.

Achor says that this simple program has had dramatic effects on the attitudes and productivity of employees and their bosses. One of the places he used it was at a large accounting firm at tax time. Apparently, the tax accountants performed better for longer and felt better about it than ever before.

Using Achor’s program is, of course, a personal decision that every employee—and owner-advisor—will have to make for themselves. His work, though, does confirm our experience that happy employees are better employees. We believe that long-term happiness is a matter of attitude rather than gains or achievements. For instance, we can confirm that higher pay levels lead to short-term happiness at best. Advisors often find that growing larger firms is not their key to happiness, either.

Yet, with that said, we have also found that employers can indeed create circumstances that result in greater happiness for their employees, particularly when they involve a sense of mission to help people, a feeling that their jobs are important to that mission, a share in the success of the firm, some control over how they do their jobs, the support by their firm for their success—and most importantly, support for a comfortable lifestyle and a happy home life.

Advisory firms that focus on the short-term happiness of their employees through high pay or meaningless perks only enable the cycle of unhappiness that Achor is talking about. The best firms help their employees achieve long-term happiness in their jobs and their personal lives, which makes for better employees working for more successful firms. In my view, it’s quite simple.