A noticeable change in the study of economics over the past 20 years has been the rise of the ‘Happiness Movement’ – a fusion of economic thinking with sociological and psychological wisdom, as well as public health, to advocate hybrid measures of quality of life (involving such variables as leisure time, relationships, environmental-friendly processes and levels of freedom) as aspects worth maximising alongside wealth, income and profits.
Happiness Economics teaches us that robust stock markets, economic growth and low unemployment might be missing an episode or two in the story of our lives. Government policies and business strategies often disregard the experiences of worry, anger, high stress and low optimism that a fast-paced modern lifestyle might entail – so much so that recent empirical evidence informs us how happiness has been particularly elusive in the business world, as corporate leaders remain too much focused on driving higher rates of profits at the expense of what their internal and external stakeholders really need and want.
In the year 2000, the Edelman Trust Barometer, an annual survey on trust for the world’s four major institutions − government, business, media and NGOs − was launched for the first time.
This annual survey consists of a 30-minute online interview with more than 36,000 participants spread over 28 different countries across the world. Today, it has become one of the longest-running pieces of intellectual property that animates discussion at the World Economic Forum in Davos.
Its 2022 edition (released last January) reveals that respondents want business to play a larger role on climate change, economic inequality, workforce reskilling and addressing racial injustice.
According to the 2022 Edelman Trust Barometer, 61 per cent of their interviewees claim that when considering a job, they expect the CEO to speak publicly about controversial social and political issues they care about.
Indeed, Happiness economists are ever more captivated by the increasing evidence that the relationship between employer and employees is the top factor in job satisfaction, which in turn is the second most important determinant of a person’s overall well-being. Only mental health is more important for overall life satisfaction.
A 2020 review of literature conducted by Mckinsey & Company (one of the most prestigious consulting firm in the world) clearly synthesises these observations in one of their pictograms [see Figure 1].
Moreover, they also point out to countless other studies on the more extended link between employee satisfaction, customer loyalty, profitability and shareholder value, as well [see Figure 2].
In many ways, Happiness Economics postulates that if we want to achieve a win-win situation in a business world ever so caught in the daily grind of cost-cutting exercises, where emotions of fear, frustration, anger and isolation are on the rise and feelings that ‘people’ and ‘planet’ are yet another expendable object in the name of ‘profit’, there is only one question any employer out there has to contend with: How can I cultivate a happier work environment that supports the physical, cognitive and emotional well-being of my team?
Somewhat prophetically, supporters of the Happiness Movement are dusting off an age-old model to argue that there is one essential area where companies can concurrently cater for their internal and external stakeholders’ need for more tangible environmental, social and governance (ESG) ambitions, while still conserving profits and, in many cases, survive aggressive restructuring – ‘servant leadership’.
While the phrase was first coined by Robert K. Greenleaf (founder of the Servant leadership movement) in a 1970 essay, leadership gurus like Ken Blanchard, Simon Sinek, Patrick Lencioni and Brene Brown have been publishing extensively on the subject and power of servant leadership ever since. But perhaps, the whole concept is best presented by Jesus himself, who was definitely the first to apply servant leadership throughout his business on earth.
Corporate leaders remain too focused on driving higher rates of profits at the expense of what their internal and external stakeholders really need and want
Jesus walked with his disciples for three years and trained them to take over his mission. His leadership was all about purpose. He knew where he was going, wanted his disciples to follow in his footsteps and was more than willing and able to serve them by giving them what they needed along the way.
As a servant leader, he assigned tasks in line with his disciples’ aptitudes and skills and while holding each one of them accountable for their actions, Jesus helped them become more effective and better in their ministry. The track record of his leadership approach is epitomised by how well his disciples performed when he passed on his entire mission to them.
Well beyond autocratic leadership, bureaucratic leadership and transactional leadership – all of which focus on a strict chain of command and rigid give and take relationships, a servant leader primarily seeks to engage with their employees to develop a common mission statement that enables everyone within the organisation to achieve the set vision, live the set values and hit the set goals.
This type of attitude instils a great sense of trust, confidence and teamwork and as employees sense that they are truly being served with a purpose – that is indeed, their own purpose – a safe and joint problem-solving environment generates the perfect business environment for innovation, achievement, happiness at the place of work, and why not, greater profitability, as well.
According to Happiness economists, such a scenario is not just wishful thinking – with the realities facing business leaders today, it is the ‘most economically advantageous’ way forward.
Ivan Cauchi is a senior lecturer, economics and international business at MCAST.
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