ST. PETERSBURG, Fla.—While not a mainstream business practice quite yet, it’s become increasingly accepted that happier employees make for happier members. “Happiness metrics” have even been developed to measure the affect of happiness on the bottom line.
Where the real challenge lies is in the “how” of getting to that happy employee. One secret: Paying people big bucks to quit.
Credit unions were offered some strategies for the “how” by an executive from a company that has championed the concept of “happiness” as a key piece of its business model; advice that was the basis for a best-selling book.
Jenn Lim is CEO and Chief Happiness Officer at Delivering Happiness, a company she cofounded along with Tony Hsieh, the CEO of Zappos.com. The company says it seeks to inspire science-based happiness, passion and purpose at work, home and everyday life.
The book is based on the unique business practices of Zappos.com, which has risen to prominence for not just the inventory of shoes and other items it offers, but for the service and the employees behind the brand. Lim told CSCU’s Solutions Conference here that Zappos has learned numerous lessons—and seen the benefits—in getting to the “how” of happiness.
Lim, who said she identified with the credit unions as having been borne out of the idea of community with a philosophy that people matter more than profits, said that “Our simple equation is happier employees equal happier customers, which leads to a sustainable business and to positively impacting lives.”
Happiness, and its pursuit, is a fundamental interest of nearly all people going a long way back in history. But Lim said that when she asks people and audiences how many can predict what sustains their own happiness, she finds it’s always fewer than 5% that actually have any idea. She noted that Aristotle said that happiness is “the purpose of our existence,” but he also added, “happiness is dependent on ourselves.”
Why Are So Many So Unhappy?
So why do we have a globally unhappy society?, asked Lim.
“Our brains are hardwired to seek happiness. Yet we’re super-bad at predicting what can sustain it. We hear this all the time. We see this with lottery winners, whose happiness stays the same or even declines. Then we see terminally injured or disabled people whose happiness actually increases over time,” Lim said.
There are lessons in there, she added, for credit unions and other organizations aiming to increase happiness within their own shops, which Lim shared. She also shared her own story, having grown up in an Asian-American household and with a focus on three life paths: getting into a good school, becoming a doctor or lawyer, and learning a variety of musical instruments. She was well on her way down that path, studying pre-med at UC-Berkley—and playing musical instruments—before she took a class in Asian-American studies. She chose to make that field her subject of study.
“ My parents were outraged, and were very good with the guilt thing,” she laughed. “I stood my ground.”
She eventually became a consultant with KPMG specializing in what was then the emerging Internet, was making a very good living, and then the Internet boom went bust. So did her job.
“I felt like a total loser,” Lim said, “and it wasn’t because I was fired; it was because I realized the money, title, status, didn’t matter.”
In her twenties, Lim climbed Mt. Kilmanjaro, along with a good friend Tony Hsieh, who had just sold his business to Microsoft for $280-million.
“I’m unemployed. We’re at opposite ends of the spectrum, but we realized we were in the same place,” said Lim. “We asked ourselves, ‘What would we do with our lives if money didn’t matter?’”
Hsieh would come down from the mountain to create Zappos. Lim would continue her search, becoming even more intraspective after her father died.
“I started doing things that really mattered to me,” she said. In the course of that, she came back across Hsieh and Zappos.
“We decided to become not the best at selling shoes, but best at making our employees happy,” explained Lim. “Happiness became business model. When I think about Zappos, I think of this quote from Maya Angelou: ‘People will forget what you said, people will forget what you did, but people will never forget how you made them feel.’”
The Value of the 'PEC'
The mantra at Zappos became what’s known as PEC: Personal Emotional Connection. “We looked at how do we develop a PEC with every single person we touch,” said Lim. “It’s expectations, experience, emotions, stories, culture.”
Employees in Zappos’ call center do not have their calls timed, nor do they work from a script (the record for one call at Zappos is 10.5 hours with a customer who bought at $49 pair of shoes).
“Amazing customer service is what people think of with Zappos, but it’s not priority number-one. Priority number one is amazing company culture,” said Lim, who showed a graphic of all the business books that have been published that seek to identify what separates a good company from a great company. “The answer is culture and higher purpose,” said Lim.
Among the unique practices at Zappos is an offer of $4,000 to every new hire after they have gone through training to quit the job.
“We really want every single candidate to embrace the culture and values, and to contribute to it,” said Lim. “We’ve actually raised the amount (offered to quit) because not enough people were taking it. Every person who was a wrong hire requires 100% to 150% of that person’s salary to find the right replacement. So it doesn’t cost Zappos money, it saves money.”
Lim said she’s been to plenty of companies and seen the walls and the signs proclaiming a corporate mission statement, but then often finds a disconnect.
“When you ask people what the values are in the organization, they don’t know. But at Zappos every person knows the values.”
The Zappos Values
What are Zappos’ values? They are:
- Deliver WOW through service.
- Embrace and drive change.
- Create fun and a little weirdness. (People are asked in interviews, “On a scale of weird, how weird are you?”
- Be adventurous, creative and open-minded.
- Pursue growth and learning.
- Build open an honest relationships with communication.
- Build a positive team and family spirit.
- Do more with less.
- Be passionate and determined.
- Be humble.
Those principles may make some CU leaders uncomfortable, but it appears to work: Zappos was sold to Amazon for $1.2 billion.
“Companies that focus on happiness have done better than companies in the S&P 500 average financially,” said Lim, pointing to figures showing that 87% of American workers say they feel disengaged from work, resulting in an estimated $500 billion annually in lost productivity.
Lim offered these lessons and questions to credit unions from Zappo’s experiment in happiness as a business model:
- Commitment. Do you want to build a long-term, sustainable brand? Are you willing to commit finances, resources and time for it? How long will it be a priority?
- Define your core values. “It’s hard. Start early. What are your company’s and your personal core values? Do they align? Have fun. Values aren’t just words, there is meaning behind them.”
- Commitment to transparency. “Be real Be yourself. When people are, there’s less to fear (while saving time, effort and anxiety).”
- Vision. “For employees, what’s the larger vision and greater purpose in their work beyond money or profits? For entrepreneurs, this means asking what would you be passionate about doing if you didn’t fear failure and didn’t make any money for 10 years?”
- Build meaningful relationship. “This is a huge one. It’s not about networking, it’s about connectedness. If you’re interested, you don’t have to try to be interesting.”
- Build the right team. “Hire slowly. Fire quickly. Hire/fire based on values. This might sound harsh for a people-driven organization, but at the end of the day it takes just one person to ruin a department or an experience.”
For credit union leaders intrigued by improving the happiness ratio within their own operations, Lim stressed it’s about more than just saying, “Show up, be happy, everything will be fine. It has to be rationale and grounded in reality.”
One Practical Strategy
She said one practical strategy for improving the happiness of employees is to provide constant updates on how they are progressing, in training, for instance. If a program is 18 months long, for instance, give them updates every six months. Ensuring those employees feel connected can be a critical difference-maker, she reminded.
“There must be a higher purpose or meaning,” said Lim. “This is about being part of something bigger than yourself. This was an ‘aha moment’ when we realized this could all be applied to a workplace.”
Companies that have bought into the Zappos happiness business model, which is the focus of the book Lim and Hsieh co-wrote called “Delivering Happiness,” have seen bottom line benefits, she said. Those companies, which include Aetna, AMC, Audi, Motley Fool, and Lowes, have seen 39% increase in monthly sales and averaged 92% decreases in unplanned absence after investing in happiness culture, she said.
“This is my fundamental belief,” said Lim. “We as people have the ability to create the opportunity to create more change than we ever knew we could, and it all comes down to happiness.”
Those interested in getting a free copy of the Zappos Culture Book are encouraged to contact Lim at Jenn@deliveringhappiness.com.