Happiness Drives Business Results? Not So Fast…

If you are a college football fan, you are familiar with ESPN Gameday, the live show filmed before big games. It’s like a traveling circus rolling from campus to campus. Excitement reaches a fever pitch as game time nears, with thousands of students in strange costumes and inconsistent levels of sobriety gathering around the stage of the hosts. The hosts have some routine shtick. Near kickoff, one of them, Kirk Herbstreit, delivers a serious thesis about who will win the game and why. It is always well-reasoned and founded on solid theory and observation of practice sessions. Then his partner Lee Corso responds with a refrain familiar to viewers: “Not so fast, my friend.” In other words, theories about the game’s outcome might sound good, but only when they are tested on the field do we know if they work.

Recently, it has become common to read bold, unqualified declarations that happiness drives business results.  I have certainly been guilty of hyperbole in this regard. However, during the past few weeks positive psychologist Shannon Polly and I have been preparing an article for a future edition of Talent Management exploring the connection between happiness and business results, and we have found the causal link is not that clear. Although there are exciting and promising things happening in organizations as diverse as Freddie Mac, NYSE Euronext, and PWC-Australia (you’ll have to read the article to learn about them!), much of what we discovered during our research consisted of lab studies, survey results, unverifiable claims from consulting firms or hypothetical musings. Nothing wrong with all of this, but it is like Herbstreit’s pre-game analytics: we have an excellent idea of what should work, but not too many final scores.

Perhaps that shouldn’t surprise anyone, and doesn’t mean happiness at work does not drive results. I certainly believe it does, based upon my years in the Coca-Cola system in both HR and business unit leadership, and I write about it ad nauseum in this blog. Also, the theoretical foundations of “happiness studies” rests upon very sound academic footing with test studies showing robust results.

Indeed, charges of insufficient empirical proof can be leveled against almost any HR-related business initiative, but that doesn’t mean the initiative doesn’t become part of the normative standards and culture of an organization. Take for example, diversity. It might startle younger readers, but 20 years ago few people gave “diversity” little more than lip service, and to the extent it was incorporated in workplace practices it tended to be couched in terms of litigation avoidance. Today, it is impossible to imagine a major corporation that doesn’t trumpet the importance of diversity to its mission, and many organizations have officer-level departments devoted to promoting diversity. When its empirical links to financial performance are probed, however, the water becomes a bit cloudy, but that doesn’t stop – nor should it – its mainstream place in corporate America.

Maybe it is just too soon to have a body of “hard” evidence: the scientific study of happiness in the workplace is a relatively recent phenomenon. Maybe it’s too difficult for researchers to find subjects: “doing a serious controlled experiment experiment in an organization is difficult,” positive organizational scholar Kim Cameron of the Ross School of Business at Michigan said. Maybe it is something darker – perhaps the Death Lizards of the Consultocracy are so fully invested in their 6-Sigmatized deficit focus models that simple things, like looking for the good in employees and organizations is beyond them. Or unprofitable.

In conclusion, I believe that happiness at work does drive business results, as do the vast majority of social scientists who study these things, and I am confident there are legions of you out there who agree. We need to be careful, however, about over-promising and under-delivering. What is needed are more longitudinal, controlled studies which link positive psychology interventions to metrics such as increased sales and profits or return on invested capital. Until then, to those of us who work in this area, not so fast, my friends. We can only say that happiness seems to have demonstrable, positive outcomes in the workplace, but more research is needed.

And watch out for the Death Lizards.