Most companies aim to just make their people happy. Here’s where they are often wrong.

by Paul Zak – Professor, Speaker, Entrepreneur

Arbejdsglaede. Only the Scandinavian languages have a word for Joy at work; in Danish it is arbejdsglaede.

What do the Danes know that most of the world does not?

To find out, my team and I spent a week in LasVegas. We weren’t spying on Danes at a business convention; we were holed up in a loft in downtown Vegas running a neuroscience experiment on employees from one of the happiest companies in America, Did Zapponians have arbejdsglaede because managers hired inherently happy people or because the culture at Zappos made arbejdsglaede possible? Let’s drop the Danish and just call this Joy.

I drove with researchers from my lab in a rented panel van to Las Vegas with syringes, tubes for blood, dry ice, and wireless sensors to measure cardiac rhythm, vagal tone, and palmar sweat. Zapponians are unusual, and we hoped that collecting brain activity while they worked would reveal what made them so joyful. If having passionate, committed colleagues comes down to hiring right, then culture may not matter that much. Previous chapters have discussed the importance of culture fit when hiring. But if Joy comes from putting a certain type of people in any old culture, then cultures need only include what these special hires need to be successful. Trust is still going to matter, but perhaps not as much as finding the right people. This chapter shows that the answer to whether high-engagement colleagues come from making the right hire or having the right culture is that both are necessary.

This chapter also explains why effective cultures cause colleagues to experience Joy at work. And we’ll add another catalyst to achieve high performance: Purpose. The positive feedback between Purpose and Trust is captured in the equation Joy = Trust × Purpose. Once we have dissected this equation, I present data from a number of experiments that support this relationship. If there is nothing else you remember from this book, remember the equation Joy = Trust × Purpose. It is a succinct statement of how to create a culture of high engagement. When colleagues regularly experience Joy at work, you have a great culture.

Where is maximizing shareholder value in all this good feeling? Shareholders nominally own the company, and their interests—often over the short term—are supposed to be paramount. While many economists still preach this gospel, it confuses correlation and causation. The value of a company increases as the result of doing the right things: building a culture of high engagement and innovation, taking good care of customers, and being good stewards of the resources entrusted to the company. Embracing the improper causation, that managers should focus only on maximizing shareholder value, has resulted in shortermism, extraordinary excesses in compensation, ill-advised corporate mergers, and renouncing responsibility to the two most important constituencies of a company: colleagues who work there and customers who pay their salaries.

Former General Electric CEO Jack Welch, a proponent of maximizing shareholder value when he ran GE, has become a vociferous critic of this view, calling it “the dumbest idea in the world. Shareholder value is a result, not a strategy.” Many thoughtful business leaders now agree with Welch, and many disagreed with the notion of maximizing shareholder value when it was floated in the 1970s. In 1979, Quaker Oats President Kenneth Mason wrote, “Making a profit is no more the purpose of a corporation than getting enough to eat is the purpose of life. Getting enough to eat is a requirement of life; life’s purpose, one would hope, is somewhat broader and more challenging. Likewise with business and profit.” I call the larger set of goals that an organization accomplishes its transcendent purpose.

Fundamentally, organizations exist because they improve the lives of customers, colleagues, and communities. This is an organization’s transcendent purpose. The only reason clients pay for a company’s services is because it makes their lives better. Every organization can identify and measure its transcendent purpose and assess whether it is being fulfilled.

Transcendent purpose should be distinguished from an organization’s transactional purpose. Every business has processes that allow for efficient transactions, from ordering materials to producing goods and services to their delivery to customers. The small-p transactional purpose is the quotidian “doing” of business that is vitally important to turning a profit. Transcendent purpose is a bigger concept: how the organization serves people and their needs. I’ll use a capital P to denote this larger notion of Purpose and drop “transcendent” when the meaning is clear.

Not about happiness. Neuroscience makes a nonobvious prediction about high-trust organizations: Trust combined with Purpose results in Joy at work. Experiments from my lab and others show that working in a high-trust culture modestly increases Joy. Trust effects Joy through the interaction of oxytocin and dopamine (chapter 1), making it feel good to be around trusted team members. Being trusted by others also keeps chronic stress levels low, eliminating a drag on Joy. But understanding the value the organization creates for society, its Purpose, provides a second oxytocin stimulus. Helping others—even at a distance—is a powerful oxytocin booster.

The science here is subtle, and many organizations have missed the point: Organizations should not try to make people happy at work. Joy is the result of working with trusted colleagues who have a transcendent purpose. The OXYTOCIN factors are designed to challenge colleagues to meet important goals. It is that striving that research has shown produces a sense of accomplishment. Joy arises naturally when people want to be at work and are challenged and recognized for what they do. In one of comedian Chris Rock’s routines, he talks about dropping out of high school and working as a dishwasher at a Red Lobster restaurant. All day he stood at a sink scrapping shrimp off of people’s plates.

He said he knew it was a job because time passed achingly slowly. Now he has a career and he never has enough time because he has so many exciting projects; in his words, “When you have a career there just ain’t enough time in the day.” The monologue was hilarious, and you get the point: Careers produce Joy; jobs seldom do.

Neurologist, psychiatrist, and survivor of the Nazi death camps Viktor Frankl wrote, “It is the very pursuit of happiness that thwarts happiness.” This holds at work and outside of work. Joy ­results from the process of being trusted and the autonomy it enables, but it depends critically on embracing the organization’s transcendent purpose: how a business or nonprofit serves the needs of customers, students in school, or citizens in one’s city. Frankl called this “striving to find meaning.”

The two great management thinkers of the 20th century, Peter Drucker and W. Edwards Deming, both considered knowledge of an organization’s Purpose essential to achieving high performance. Drucker wrote, “In our society of organizations, it is the job through which the great majority has access to achievement, to fulfillment and to community.” The medieval philosopher and Catholic saint Thomas Aquinas said it similarly: “There can be no joy in living without joy in work.”

Finding Purpose. A Deloitte/Harris Poll shows there is a serious worldwide Purpose deficit. Sixty-eight percent of employees and 66 percent of executives said that their organizations do too little to create a culture of Purpose. Here’s where it gets really interesting: For those who work in high-Purpose organizations, 91 percent said their companies have a history of strong financial performance, 94 percent said their companies have outstanding customer service, and 79 percent said they are satisfied with their jobs. The corresponding values for organizations low on Purpose? Only 66 percent have strong financial performance, 63 percent have great customer service, and only 19 percent of employees are satisfied with their jobs. Only one-half of those surveyed even knew their organization’s Purpose.

You must do two things to capitalize on the power of Purpose. First, you must clearly and succinctly identify your organization’s Purpose. Second, you must ensure that colleagues experience ­Purpose. Many companies have Purpose statements, and I’ll discuss these below, but having a longer Purpose narrative can be more powerful than simply a short phrase.

To find your organization’s Purpose, start with its founding myth: Why did the founders put their livelihoods at risk to start the company? Has that vision been sustained? Does every colleague in the organization share this vision? Purpose is best communicated as a story in which the founders and their struggles are featured. Purpose narratives should describe how the founders sought to improve the lives of others: customers, community members, and the world. They necessarily focus on other people’s needs, not on self-aggrandizement.

If you do not want to use your organization’s founding myth as the basis for a Purpose narrative (if, e.g., your organization has merged several times), try the chronological opposite: What did the founders want to be remembered for at the end of their careers? Or: How does the current CEO want to be remembered? Next, ask what the organization is doing to create this legacy. This question gets at the deep “why” of the organization, and a Purpose narrative can be built from it.

A culture of Purpose on purpose. If you want maximum impact, ­Purpose narratives must be repeated until they penetrate every part of the organization. During a visit I made to LinkedIn, the San ­Francisco–based networking and recruiting company, every employee I met used LinkedIn’s Purpose statement in the first five minutes of our conversation. Their Purpose is to “connect the world’s professionals to make them more productive and successful.” This outward-focused statement captures how their work improves people’s lives. While it is not a story, it is succinct and memorable. “Culture and values are LinkedIn’s most important competitive advantage,” Jeff Weiner, LinkedIn’s CEO, told me. Each business unit uses LinkedIn’s Purpose to assess whether a project should move forward or not. Weiner added, “You can never repeat these things too much.” He is right.

Purpose has impact when every colleague knows it. Purpose narratives with passion and turmoil are better remembered than stories that just state the facts. Passionate narratives are also more likely to incite action. 12 Management theorists Jim Collins and Jerry Porras give the example of British Prime Minister Winston Churchill’s speech to the British people on the eve of World War II as an effective Purpose narrative. Churchill did not say “Beat Hitler.” He built a story of a heroic struggle, saying,

“Hitler knows he will have to break us on this island or lose the war. If we can stand up to him, all Europe may be free, and the life of the world may move forward into broad, sunlit uplands. But if we fail, the whole world, including the United States, including all we have known and cared for, will sink into the abyss of a new Dark Age, made more sinister and perhaps more protracted by the lights of perverted science.

Let us therefore brace ourselves to our duties and so bear ourselves that if the British Empire and its Commonwealth last for a thousand years, men will still say, ‘This was their finest hour.’ “

Now that’s a Purpose narrative.

Paul Zak is a professor of economics, psychology and management at Claremont Graduate University and and founder of a neuromanagement consultancy called OFactor. He is on a continuous quest of understanding the neuroscience of human connection, human happiness and effective teamwork. His research on oxytocin and relationships has earned him the nickname “Dr. Love.” 

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