The Underrated Metric That Drives Profit: Employee Happiness

 

We crunch numbers. We obsess over metrics like productivity, turnover rates, and revenue growth. But what if the most consequential metric for a thriving workplace is the happiness quotient? Before you dismiss this as a utopian fantasy, let's consider the numbers. A study by Oxford University in association with Indeed demonstrated a strong correlation between employee wellbeing and company profitability, even acting as a predictor of future growth. So, let’s have a talk about the financial and moral imperatives of making happiness the key performance indicator we’ve been missing.

The Happiness Dashboard

We've got dashboards for sales targets, key performance indicators, customer satisfaction metrics. Why not a "Happiness Dashboard"? This board wouldn’t just track joy levels but would bring in a holistic view—sense of purpose, job satisfaction, and stress levels. Imagine leaders starting their week checking into how fulfilled their team feels. Imagine the ripple effect on the areas we more traditionally measure: sales, productivity, and employee retention. How’s that for a leadership innovation?

Envisage starting each week—before you even glance at sales numbers or project statuses—by examining this Happiness Dashboard. How transformative would it be to have a leadership meeting discussing not just profits and losses but the spikes and dips in team happiness? Imagine correlating these emotional graphs with the more traditional metrics we obsess over. The question changes from "How can we boost sales?" to "How can we elevate team wellbeing to positively impact sales?"

Such an analytical tool would serve multiple strategic goals. Firstly, it ensures alignment between employee wellbeing and organisational objectives. Secondly, it acts as an early warning system for emerging issues before they escalate into real problems that impact performance, thereby providing an opportunity for proactive solutions. Thirdly, it can become the cornerstone for organisational culture, a reference point for every strategic decision made. A cultural shift that starts from the top but spirals outward, encompassing every tier of the company, altering the way we perceive 'work' and 'wellbeing'—not as mutually exclusive but as mutually beneficial entities.

Not Just an Employee Thing, It's a Leadership Thing

If we're committed to measuring the "happiness quotient" as a pivotal metric, the first question becomes: where do we begin? The answer is simple but profound: at the top. As leaders, you don't merely direct the workflow; you also set the emotional tone of the organisation. You are the linchpin that holds the machinery of corporate culture, and by extension, employee happiness together.

When leaders are bogged down by stress, burned out, or disengaged, it sends an implicit message to the team: 'This is acceptable.' That message trickles down into every business unit, every department, every individual contributor. People absorb the emotional energy that leaders exude, consciously or unconsciously mirroring it back. Stress begets stress, disengagement breeds disengagement, but fortunately, the reverse is also true: happiness spreads.

Leadership wellbeing isn’t about indulgence or escapism. It's about equipping yourself with the emotional and psychological tools to handle the vicissitudes of running an organisation. It's about being aware of your own mental state, emotional health, and sense of fulfilment, and recognizing how that translates into the collective wellbeing of your team. When leaders are happy, engaged, and rooted in a sense of purpose, that becomes the normative emotional currency of the organisation. In this environment, teams don’t just function; they flourish.

This is where the role of executive coaching becomes invaluable. Through coaching, leaders can embark on a deep, introspective journey to understand their own emotional landscape. They can work on developing emotional intelligence, resilience, and a leadership style that is not just effective but also empathetic. By investing in your own emotional wellbeing, you're laying the groundwork for a happier, more resilient team.

Tips for Infusing Happiness Into Your Organisation

  • Mindful Mornings: Begin your team's day with a 60-second mindfulness exercise to instill focus and awareness. Personally, use a similar practice to centre yourself each morning.

  • Open Office Hours: Reserve a weekly hour where team members can have open discussions. Simultaneously, use this window to self-reflect on your own work-life equilibrium.

  • Purpose Pow-Wows: Conduct bi-weekly gatherings to explore not just project specifics, but also their underlying purpose. Ensure that 'why' is a regular part of these discussions.

  • Passion Projects: Set aside time for team members to focus on passion-driven projects beneficial to the company. For your own well-being, engage in projects that rekindle your vocational fervour.

  • Reverse Mentoring: Pair senior leaders with junior staff for mutual learning experiences, particularly in tech or trending issues. Keep your own skills updated and your mindset fresh.

  • Financial Literacy Workshops: Mitigate financial stress by offering team workshops on personal finance management. Keep yourself updated on fiscal best practices for personal peace of mind.

  • Creative Sabbaticals: Provide long-standing employees the chance for a brief 'creative sabbatical.' As a leader, consider a similar pause for self-renewal and innovative thinking.

  • Thank-You Culture: Consistently acknowledge and celebrate your team's efforts in public settings. Similarly, remember to recognise your own milestones and cultivate gratitude.

The Happiness Flywheel Effect

Once the wellbeing ball starts rolling, it gains momentum. Happiness begets more happiness, creating a virtuous cycle. It's a flywheel that, once set in motion, will generate growth, creativity, and innovation. The more energy you invest in turning it, the more momentum it gains, and the less effort is needed to keep it moving. That’s what happens when we focus on wellbeing in the workplace—it starts as a directive, then becomes a habit, and eventually evolves into a self-sustaining culture. Let's dig deeper into this concept, often underestimated but exceptionally powerful in its impact.

When you’re happier, you’re sharper. You solve problems faster. You’re more likely to think outside the box. This heightened level of performance naturally feeds back into your sense of wellbeing—you feel accomplished, which makes you even happier, which in turn makes you even more effective at your job. This forms a happiness-performance loop that is self-sustaining and infinitely rewarding for both the individual and the organisation.

Your Balance Sheet of Joy

As an executive coach, I can tell you this: Those who focus on holistic wellbeing don't just meet their bottom lines more efficiently—they shatter them. So maybe it’s time to rewrite the rules. In a world hyper-focused on data, let’s not forget the most important metric of all: human happiness. You've got your financial balance sheet; now let's start working on your balance sheet of joy. In the business landscape, we've come to accept balance sheets as a natural way to assess an organisation's health. Assets, liabilities, shareholder equity—these elements combine to provide a snapshot of your company's fiscal vitality. We glance at these figures, and we know almost instinctively where adjustments need to be made. Why then do we resist applying the same rigour to human elements within our organisations?

If we were to construct a balance sheet of joy, what would be the categories? Surely, the assets would include the collective sense of purpose, the joy of daily accomplishments, and the energy of a connected team. The liabilities? Those could be stress, attrition, and disengagement. Shareholder equity translates to stakeholder wellbeing—the net effect of assets minus liabilities that everyone from top management to entry-level employees feels. But how do we quantify happiness? How do we measure a sense of purpose or the deep-rooted satisfaction derived from meaningful work? One of the challenges of the balance sheet of joy is that the metrics are inherently softer and more qualitative. Yet, that doesn’t make them less important. In fact, it makes them essential for their ability to illuminate what numbers can't. You see, happiness doesn’t fit neatly into cells on a spreadsheet. It radiates through conversations, sparkles in employees' eyes, and reflects in the quality of work.

The magical aspect of focusing on joy is that its effects are often non-linear. Investing in happiness and well-being can result in exponential returns, far surpassing the input. This is unlike a financial balance sheet, where growth is often linear, assets increase gradually, and liabilities are carefully managed. In a balance sheet of joy, one transformational leadership decision could trigger a cascade of positivity, turning a ‘good-enough’ work culture into an extraordinary one.

And for those of you who think happiness at work is too soft a metric, remember—soft powers often yield the most substantial results. Let's not just make it to the future; let’s shape a future worth making it to.

 
 

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Photo by Clay Banks on Unsplash

Derek Hill

Helping Leaders Level Up ↗️ | Leadership and Team Coaching | MSc Coaching & Behavioural Change | ICF ACC | EMCC Senior Practitioner | Founder @ hi-5 Coaching | YPO’er | #timetolead

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