Happiness as a Business Model

A happiness-based culture can result in employees being excited about coming to work on Monday instead of leaving the jobsite on Friday. Imagine what this type of attitude can do to the success of an organization.
By Martin C. McCarthy
April 25, 2019

Contractors 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.

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 difficult to work for and demanding 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 Managers are Key

According to the 2017 State of the American Workplace report by Gallup, only 33% of American workers are engaged in their job. This means that 67% of employees are somewhat or not engaged in their work. Gallup estimates that actively disengaged employees cost the U.S. $483 billion to $605 billion each year in lost productivity.

Managers account for at least 70% of the variance in employee engagement scores. Only 21% of employees strongly agree that their performance is managed in a way that motivates them to do outstanding work.

A record 47% of the workforce claim that now is a good time to find a quality job, and more than half of the employees surveyed (51%) are searching for new jobs or watching for openings. One in two employees have left a job to get away from a manager and improve their overall life at some point in their career. Gallup's report states that: "Having a bad manager is often a one-two punch: Employees feel miserable while at work, and that misery follows them home, compounding their stress and putting their well-being in peril."

Gallup found that only "18% of those currently in management roles demonstrate a high level of talent for managing others, while another 20% show a basic talent for it. Combined, they contribute about 48% higher profit to their companies than average managers do."

Gallup concluded that only 10% of the people in managerial roles have a strong natural ability to:

  • Put the right people in the right roles;
  • Engage employees with a compelling vision;
  • Motivate every employee individually;
  • Coach and develop their people by focusing on their strengths;
  • Make decisions based on productivity, not politics; and
  • Build trust and dialogue with their people about work and life outside of work

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 (Harvard Business Review [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); and
  • 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 among 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, CEO of, 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.

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 jobsite on Friday. Imagine what this type of attitude can do to the success of an organization.

by Martin C. McCarthy

Martin C. McCarthy, CPA, CCIFP, is with McCarthy & Co., a leader in construction accounting. CE included McCarthy & Company on its list of 2019 and 2020 Top 50 Construction Accounting Firms. He can be contacted at (610) 828-1900

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