A couple years ago, Matthew Stinchcomb was living in Berlin, running global marketing for Etsy. Sounds like a cool gig, but Stinchcomb was miserable. He hated marketing, he hated that he wasn't doing anything creative, and he didn't much like working out of a satellite office detached from the Etsy mothership, either. So, he came back to Brooklyn and talked to his bosses about what he'd really like to be doing. As a result of that conversation, the company created a new team, called Values and Impact, with Stinchcomb at its head.
At the time, Etsy executives had also recently been blindsided by a less-than-stellar performance on the audit required to be certified as a B corporation—a sustainable business certification based on rigorous standards of social and environmental performance, accountability, and transparency. Their desire to improve Etsy's performance on non-financial measures coincided nicely with Stinchomb's desire for more meaningful work. The idea was that Stinchcomb would be responsible for ensuring that every action the company took adhered to its core values and had a positive impact on the communities it touched.
It's this sort of thing—not just the Values and Impact team itself, but the fact that Stinchcomb felt he could suggest such a role, and that his bosses worked with him to create it—that makes Etsy a pretty nice place to work, according to research over the past decade in the field of positive organizational psychology. That research also suggests that happy workplaces like Etsy tend to have employees that are more productive.
When Stinchcomb decided to focus some of the Values and Impact team's efforts on improving employee happiness, he did so because he genuinely cares about the well-being of the company's employees, he says, but being able to tie it to productivity and profits made it easier to sell to the board. And if the company goes public (as it's rumored to soon) its shareholders will also find that link comforting.
To get an initial baseline on Etsy happiness, Stinchcomb brought in consulting firm Imperative to survey all 419 Etsy employees, culminating in a Gross Happiness Index for the company. Imperative based its Etsy study on research conducted at the University of Pennsylvania by Martin Seligman, author of the popular book Flourish and founder of positive psychology. Seligman and his team have pinpointed five key areas that contribute to human happiness—Positive Emotion, Engagement, Positive Relationships, Meaning, and Accomplishment (PERMA). UPenn researcher Peggy Kern worked with Imperative to develop a survey for Etsy that measured employee happiness based on those indicators.
It's not the first such measure of happiness and Etsy is far from the first company to care about employee well-being. Google has been working on creating the world's happiest workplace for years now, and studies correlating employee happiness with productivity and talent retention have been coming out regularly since 2006, prompting more and more companies to worry about how to attract, cultivate, and keep happy employees. Consulting firms, think tanks, and technology companies have dutifully set about creating surveys and reporting tools to help companies accomplish this task. This year has been something of a tipping point in the happiness realm, with an explosion of new apps and services aimed at measuring and monitoring both personal and workplace happiness. Off the top of her head, UPenn researcher Kern says she could list at least 10 apps and equally as many companies she's heard of this year working on measuring happiness.
The results of Etsy's PERMA-based study initially fascinated Stinchcomb: People in the Paris office were less happy; one team in Brooklyn consistently scored higher than every other team, in every area; men were ever so slightly happier than women. It was interesting stuff, but what to do with it all?
That's precisely the problem with much of the early work on employee happiness—or positive organizations, or employee engagement, or any of the other terms used to describe this field of study. "Now you have this number, but what do you do with it?—I've asked that question several times and never had any good answer to it," says Ryan Howell, PhD, who heads the Happiness Research Lab at San Francisco State University.
It's that piece of the puzzle that's just now beginning to fall into place.
"If I were going to bet on what would really cultivate human health and well-being in the workplace, meaning or purpose is part of it, but I would bet on positive relationships," says Jane Dutton of the University of Michigan's Center for Positive Organizations, which has been researching positive workplaces for a decade. "The evidence on the almost instantaneous effect of positive connections on people's bodies is very convincing."
Aaron Hurst, the recently appointed CEO of Imperative and the former executive director of the Taproot Foundation, on the other hand, is betting on purpose. Hurst has been working for the past year or so on his book, The Purpose Economy, in which he posits that the information economy (a term coined by his uncle in the late 1970s, incidentally) will soon be replaced by the purpose economy. In both his years at Taproot and his ongoing consulting work with LinkedIn—where he has worked with leadership to better understand the needs of the nonprofit sector and helped the site develop a strategy and plan to connect its members to pro-bono service opportunities and positions on nonprofit boards—Hurst has found that "what people want from their careers are things that help them boost purpose in their lives."
Giving employees a sense of purpose and creating a work environment that encourages positive connections cannot, of course, be accomplished by simply conducting an annual survey.
"At the end of the day data only gets you so far," says Kyla Fullenwider, co-founder of Imperative and the lead consultant on Etsy's happiness study. "Data can be very useful to help make the case to the board for why this stuff matters, but then it's digging in and working on creating a really healthy work culture, which just requires elbow grease and thoughtfulness and wisdom. "
Or does it? For Ben Waber, president and CEO of Sociometric Solutions, a consulting firm that works to improve the workplaces of Fortune 500 companies such as Steelcase and Bank of America, the solution is not minimizing the importance of data, but gathering the right sort. "Fundamentally, all of these survey tools measure perception, and while that's important, especially with something like happiness, it doesn't really tell you what needs to change or how to change it," Waber says.
To that end, Waber and his co-founders—with whom he began researching this stuff at MIT about seven years ago—have created next-generation employee badges with embedded sensors that measure things like how often employees talk to each other, how often their voices indicate stress, and where in the office employees tend to move and/or congregate. So far, Sociometric Solutions' data backs Dutton's horse. "Relationships are extremely important," Waber says. "If I lock you in a room by yourself, some days you'll be happy, some days you'll be sad, even if I give you massages and good food. If I create a culture where you get along with the people you work with, I don't need to give that many other perks."
It may sound Big Brother-y to have your boss monitoring the tone of your voice or trying to manipulate you into being friends with co-workers, but Waber says wearing the tags is optional and so far, more than 90% of employees participate in every company he works with. He notes that people tend to be less concerned about privacy when they learn that managers can't see individual data, only aggregate reports, and that each employee can access their own individual data. Nonetheless, Waber says this area of privacy is currently a Wild West and he'd like to see decent regulation of it before something unfortunate happens that derails all the good it could possibly do.
But therein lies the rub: Does the end (happy workers) justify the means (potentially invasive monitoring)? And even with the less-invasive approach, what business is it of your boss's whether or not you're happy? Do the CEOs of the world just want to give the workforce a happy pill so we'll spend that much more time at work?
It seems inevitable that the current corporate interest in workplace happiness is going to change workplaces, but for some it may not be for the better: introverts who don't want to make friends at work, for example, or people who are prone to depression, but nonetheless good at their jobs. Waber is quick to point out that his company shows no individual data to companies, so no one could be fired for, say, not socializing at work, because their boss would never know which specific employees are or aren't socializing. Still, it's not beyond the realm of possibility that a company would emerge that would provide such data, and that executives would be tempted to use it to get rid of all the downers on their staff.
So far, the services and tools aimed at improving the workplace are focused not on rooting out negatives but on encouraging positive behavior: enabling close connections at work, giving employees purpose, making employees feel comfortable enough to communicate honestly about aspects of their jobs they do or don't like, that sort of thing. Fullenwider says the CEOs she talks to—typically at tech companies, including Elance, Twitter, and Bonobos—are less concerned with productivity than they are with what she calls "the moral imperative of keeping their employees happy."
"We go into these meetings with CEOs armed with all this data and that's the thing they're least interested in, honestly," she says. "They want to do it because they want happy, thriving employees because they care about them. That's really it. It's pretty cool."
Waber, on the other hand, works primarily with Fortune 500 companies, which he says tend to be more ROI-driven. When Bank of America brought in Sociometric Solutions, for example, it wanted to figure out why some of its call centers performed better than others. Waber's data showed that the better-performing centers had employees who had strong, interconnected networks at work, so the company tested out a new break structure that would enable more employees to take breaks at the same time, thus encouraging more social interaction and the formation of close-knit groups. The result was a 75% reduction in the call centers' burn rate and a 23% reduction in call time, worth conservatively $15 million a year to Bank of America, according to Waber.
For researcher Dutton, no matter what the driver is, if companies care more about worker happiness, it benefits not only employees but also society as a whole. "I think of workplaces—because we spend so much time in them—as really a big part of people, and if they're places that really care about happiness, that creates cultural shifts. We will all be better off if more organizations care about this and grow people better."
Meanwhile Stinchcomb and his team are working on finding the sweet spot between the quantitative and the qualitative. They're looking at the best-performing teams from the happiness study and basing new training practices on them, and they're creating programs that address two key drivers of happiness for Etsy employees (and people in general): acknowledgement and volunteering.
Stinchcomb is also being careful to listen to what employees want and to continue working on other things they care about, too, things like the company's environmental impact and its role within its community. Those are things people, not data, told him.
"There is a tendency at technology companies to think that quantitative data is all that matters and that anything qualitative is soft and should be ignored," he says. "That creates tension in this organization because half of us are doing quantitative work and half are doing qualitative work, and the 'soft' teams often feel they need to be more quantitative to be valuable to the company. But the real strategic advantage Etsy has is its people. And they can't be completely reduced to data."