Happiness as a Business Model

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Happiness as a Business Model

Martin C. McCarthy, CPA, CCIFP

ontractors nationwide are feeling the impact of the labor shortage. Many are finding it difficult, if not impossible, to hire qualified workers at all levels. As a result, projects are being delayed. C The impact of the labor shortage goes beyond missing deadlines. The high cost of labor is cutting into profits. Contractors are challenged to offer wage and benefit packages that are more than competitive to attract and retain qualified talent. Even with attractive compensation packages, contractors with a reputation for being demanding and hardto work for may not be able to find and keep good employees. Job satisfaction and happiness are becoming more important as people want –and even demand, a positive work culture. Good Leaders are Key According to Gallop’s 2021 State of the American Workplace report, only 20% of global workers are engaged in their job. This means that 80%of employees are somewhat or not fully engaged in their work. Gallup estimates that this lack of engagement costs the global economy $8.1 trillion USD annually or nearly 10% of the Gross Domestic Product (GDP). Fortunately, employee engagement is higher in North America where 34% of workers are engaged in their work. Gallop found that less than a quarter of employeesstrongly agree that their performance is managed in a way that motivates them to do outstanding work.Less than 2 in 10employees strongly agree that leadership within their organization communicates effectively with the rest of the organizationand makesthem feel less enthusiastic about the future. Only a third of global employees strongly agree with the statement, "The mission and purpose of my organization makes me feel my job is important."By moving that ratio to 8in 10 employees, businesseshave realized a 51% reduction in absenteeism, a 64% drop in safety incidents and a 29% improvement in quality.

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The employee experience is just as important to the success of your organization as the customer experience. Gallop concluded from their research thatimproving the employee experience should be a strategic priority for every organization.

Happiness is Good for Business Jenn Lim, CEO and co-founder of Delivering Happiness, Inc. believes that happiness is key to success in business. Twenty years of research on the effects of happiness at work supports her viewpoint. A happiness-based work culture is tied to: • 300% more innovation (HBR) • 125%less burnout (HBR) • 66% less sick leave (Forbes) • 51% less turnover (Gallup) • 44%higher employee retention (Gallup) • 37% increase in sales (Martin Sellgman) • 31% increase in productivity (Greenberg and Arawaka)

Jim Stengel, former CMO of Procter & Gamble and author of Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies supports Lim’s position. He discovered in a 10-year growth study involving 50,000 brands that the world’s 50 best businesses have a cause-and-effect relationship between financial performance and their ability to connect with fundamental human emotions, hopes, values, and greater purposes. According to Stengel,“Companies who center their business on a culture of improving people’s lives had a growth rate triple than that of their competitors.” Another study he conducted with Millward Brown found that companies with a higher purpose outperform others by 400% in shareholder returns.

Create a Happiness-Based Culture Lim outlines how to create a sustainable, purpose-driven culture using happiness as a business model in Delivering Happiness, the book that she co-authored with Tony Hsieh, former CEO of Zappos.com, Inc. They suggest focusing on the principle of “Me-We-Community” instead of profits. As explained in Delivering Happiness, “me” brings a sense of wholeness, freedom, and accountability to the individual. “We” builds a team that works together in alignment with each other and the organization’s goals. “Community” focuses on a company’s ecosystem and creating experiences to WOW stakeholders (clients, contacts, suppliers, and the community).

Creating a happiness-based culture requires management to develop meaningful core values, being transparent with employees, building the right relationships and team, and being purposeful. The goal is for each individual to connect with the team which in turn will connect with the community as a whole.

Benefits Realized Eagle Hill Consulting‘s national Workplace Culture Survey (March 2019) found that U.S. workers believe a company’s culture influences their job performance. Seventy-seven percent of the survey participants claim that their company’s culture encourages them to do their best work, 76%are more productive and efficient because of their company’s culture, and 74% stated that their company’s culture influences their ability to best serve customers. Furthermore, 63%of the employees surveyed attributed their company’s success to its culture.

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Happiness drives success in an organization. When team members feel that their contribution to the company is meaningful, they have a purpose to come to work. A happiness-based culture can result in employees being excited about coming to work on Monday instead of leaving the job site on Friday. Imagine what this type of attitude can do to the success of your organization.

About the Author Martin C. McCarthy, CPA, CCIFP, is the managing partner of McCarthy & Company. He is well respected by sureties and bankers for the high quality of his work and profound understanding of the construction industry. Marty helps clients by providing them with theinsight needed to grow their business. He can be contacted at 610.828.1900 or Marty.McCarthy@McCarthy.CPA.

A version of this article was originally availablein the April 25, 2019 issue of Construction Executive published by the Associated Builders andContractors Association (ABC).

Disclaimer: This article is for informational purposes only and does not constitute professional advice. We strongly advise you to seek professional assistance with respect to your specific issue(s).

Marty McCarthy, CPA, CCIFP