Story:
Happiness is…a work environment where people feel good about themselves and are empowered to do their best work
In the 1980s, I was involved in a project to set up a radical campaigning left-of-centre Sunday newspaper based in London. We raised £6.5 million in investment. By six weeks after the launch, we had lost the lot. We had hired some fantastic people, talented and motivated. And then, inadvertently, we created a working environment where it was almost impossible for them to succeed. It was a great irony that a company set up on humanistic principles was the worst place to work. There was endless backbiting, meetings, no clear decision making, endless blame, all of that.
After that, and the experience of getting sacked from my next job after just 12 days, I decided I didn’t want to work for anyone else again. I would work for myself, and focus on how to create a great place to work, on how you deliver great service, while being effective and principled. The next question, obviously, was what kind of business. I did a chart of what I enjoyed doing, what makes money, what doesn’t. With my IT background and affinity for people, I settled on IT training as my niche, and started a company I called Happy Computers in 1990, in my back room in East London.
Two years later, I was your typical, stressed out small businessman. I’d be on holiday with my family, ringing back every day to check on things. Then I read a book describing management as I’d hoped but never imagined it could be. The book – Maverick! – describes how Ricardo Semler took a radical approach to workplace democracy at the Brazilian company Semco – including giving front line people decision making power once reserved for managers. And the results were impressive results; Semco increased productivity sevenfold and profits fivefold in an environment of commercial chaos, hyperinflation and recession. I was inspired. I had everyone at Happy read it.
Power to the people
Getting managers out of the way and letting people perform was my first priority. That meant giving people freedom…but with clear principles. We didn’t want rigid rules but we did need systems that everyone understood, for getting things done. We needed a climate of trust. Part of that involved banishing the old fear of making a mistake. Part of it meant giving front line people the authority they needed to do their work, including pre-approval of funding requests. Things changed. A year later, I was out sick for three weeks with pneumonia, and had no contact with the office. I came back to two phone calls, and sales had gone up.
Redefining management
I got more ideas from the work of Marcus Buckingham, and his concept of “strength finder,” which is built around enabling people to do what they actually do best. One of his most powerful messages, for me, was that the old practice of identifying your strengths and weaknesses, and then throwing your efforts against addressing the weaknesses, is a waste of time. You’re better off acknowledging your weaknesses and simply not working in those areas; instead play to your strengths. And that applies to management, too.
Early on, partly by accident, we realized that people really valued the coaching and sponsorship they had been getting from their managers, which was different from the traditional management role. That led to the radical view that managers should be chosen according to how good they are at managing people, rather than technical competence and how long they’ve been at the job. We call them coordinators. You still need the technical expertise; they’re just different roles.
It also reinforced my faith in “re-evaluation counseling,” which I’ve been involved in for more than 20 years. The basic principle is that what we need is attention, to work things out. Most people need someone to listen to them, pay attention and support them while they get their feelings out. That’s why we believe that feedback is crucial, and insist on upward appraisals for managers.
Rethink recruitment
I think most recruiting is almost designed to recruit the wrong people. Central to our approach is that we never ask for qualifications. I think it’s profoundly discriminating to ask for degrees because normally it has no relation to the job; and working-class, disabled and black people are all under-represented at universities. It doesn’t happen at Virgin because if it did, they wouldn’t hire Branson. We don’t normally need to advertise job openings for trainers; people sign up on our web site to express their interest. When we have an opening, they are emailed two questions: why do you want to work for Happy, and what makes a great trainer?
When we devised our current recruitment, we thought of other areas where you have to choose from a lot of people in a short time. Two areas we thought of were speed dating, and the TV programme The X Factor. Our applicants are sent the company’s principles, and invited to Happy’s headquarters, in groups of twenty. We’re looking for people who are supportive of each other, so we want to see how they interact. We have asked them to prepare a 15 minute training session, but about ten minutes before they have to deliver, we tell them they have to cut it to six minutes. That lets us see if they have the potential to train, and how they cope with change, a crucial criterion for a good trainer. Then they train; we assess them using a clear marking system; and we give them feedback – that’s the speed dating part. The X Factor part is that, after the first round, they coach the performers. They try and find the potential. So, second round interviewees deliver a training session; we take them out and coach them; and they deliver it again. If they don’t respond to our coaching, and give the same session, they don’t get through.
Our administrative staff – we call them “smoothies” after Sade’s “Smooth Operator” song – sit in on team interviews for admin staff. We’re not hung up on formal qualifications there either. We recruited someone at age 16 who became the finance manager at 21, without the standard basic math qualification. And, do you know, in her three years in the job she never had to calculate the angle on a triangle or solve a quadratic equation. She was brilliant at getting people to pay up, and in our business that’s the most important thing.
Happy People
As we gained confidence in our business philosophy and public recognition – we were rated among the top 20 workplaces in the UK - we decided to try to help other organizations create great workplaces. So, we now have three divisions: Happy Computer, for IT training; Happy eLearning, for online IT training; and Happy People.
Our aim at Happy People is to change the way people work in the UK, so people look forward to coming to work, work to their strengths, fulfill their potential, and make the organization more effective. We offer consulting services, but we have also written a book that communicated our philosophy through a fictional tale of how a frazzled small business owner discovers another way to run a business. I recently posted a draft of a second book called The Happy Manifesto on our company site, and invited people to offer feedback, and share examples and stories related to the management principles in it. Sharing what we’ve learned and building on that through others’ experience is just part of what I believe in, and what we do.
Challenge: Transforming management culture and practices radically and quickly
- Solution: Be an enthusiastic champion, and “walk the talk”
- Solution: Build on others’ experience, but adapt it to yours
- Solution: Engage everyone in the organization, in the new experiment
- Solution: Celebrate success, extol the benefits
Employee satisfaction
- We have very low turnover, and a huge back log of people interested in working for us.
- We’ve won awards for best work/life balance, and best health and well being of any UK organization. We have been rated in the top 20 workplaces in the UK for five years in succession.
Customer satisfaction
- We get constant feedback from our customers. We count on them to recommend our work to their colleagues, and currently 98.7% of them say they would and 78% say they already have.
- We won an award for the best customer service in the UK. The reason, according to judges, was that most companies understand what the customer wants, but then put in place a system of processes and rules that prevent their frontline staff from delivering what the customer wants. Happy doesn’t; it trusts its people to deliver.
Business performance
- We have won Gold twice at the annual IT Training Awards.
- We are a small player with hundreds of competitors. Our training courses cost £220 a day while our biggest competitor sells them for £90 a day. The IT training industry has contracted over the last ten years, but we have grown.
About optimizing workplaces
- Enable people to work at their best
- Make your people feel good
- Creating a great workplace makes good business sense
- Freedom within clear guidelines
- Be open and transparent
- Recruit for attitude, train for skill
- Celebrate mistakes
- Community: create mutual benefit
- Love work, get a life
- Select managers who are good at managing
About management innovation: Be on the lookout for good ideas – from whatever source – be creative and brave in applying them, learn and pass those learnings along. Be a change agent, within and beyond your organization.
Happy Manifesto
Create a Great Workplace - Now. The Happy Manifesto is Happy's 2nd book. Filled with stories, examples and practical tips, it is an essential guide to anybody wanting to improve their workplace. Download it here: http://www.happy-people.co.uk/resources/books/happy-manifesto/
Articles
- The Secrets of Happiness, Julian Birkinshaw and Stuart Crainer, London Business School, Management 2.0 Labnotes, Issue 7, February 2008
http://www.managementlab.org/files/site/publications/labnotes/mlab-labnotes-007.pdf http://www.happy.co.uk/
Happy website
Thanks for all your comments and very intresting to read of other organisations that have used similar approaches.
Ellen: Yes, there is certainly a way to elarn from our experience. You can download our two books for free from http://www.happy-people.co.uk/resources/books/happy-manifesto/ Or ask about seminars and workshops we can provide at your organisation.
Ahmad: Can it work in a big corporation. Well, i've just read "Employees first, customers second" by Vineet Nayar of HCL, who tells an inspiring story of how this 55,000 strong company put a very similar philosophy into practice.
Though, Waqas, I agree HCL were not the first. Companies like Semco and Gore and Zappos have shown how to make these ideas work.
Recruit for Attitude: Could talk at great length on this but the key is to test for attitude in the interview (in our case how positive and supportive they are and how quickly they learn) and test their ability and potential to do the job - rather than what is in their CV, or what qualifications they have or what they say in an interview. Crucial is to test somebody's ability to do the job, not their ability to talk about doing the job.
Do post any questions you ahve on Happy and I will try to check in and respond.
Best wishes, Henry
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I ran a not-for-profit arts organization for nine years, where I developed a similar culture. One of many positive results was a big reduction in turnover. It was important, however, when we hired people, to discuss the culture as fully as possible, so that people who were not comfortable with having their jobs not 100% defined in boxes would recognize that our organization was not the place for them. Some people are energized by a flat structure and the freedom to initiate projects and take responsibility themselves, while others are freaked out. We needed to be sure we continued to hire people in the former group who wanted to be empowered and to be part of a real team.
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Henry, I think this is a fascinating story. It reinforces our belief in SKOPOS that creating a corporate culture that engages people and enables them to unleash their potential is one of the most important factors that lead to successful corporate performance. It also shows that humanizing the work place and aligning personal values to those of the work place is the secret ingredient to creating such an engaging culture. We have been doing the exact same thing in SKOPOS and have experienced tremendous corporate results and output from our people.
The key challenge is the scalability of this approach for larger organizations and sustaining this culture over the years. We have an attempt in doing this with a multi billion dollar corporation for seven years, however, we eventually ran in to a dead end when changes happened at the board level that lead to the dismantling of the company.
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Hi Henry,
very good business case. I am Professor of Strategic Manegement and author of the "good humor company" management model. I have written a book on working with good humor, and I am working on a second one. However, in the next future I would like to write a third one collecting the "good humor companies" and your case could find a place in the book. So, please, keep in touch and tell me more stories.
If you need something from me, I am available.
Greetings from Spain,
Salvatore Moccia (salvatore.moccia@uch.ceu.es)
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Henry this is a fabulous story and Semco is a facinating study. Have you spoken with those that are in established organizations that have been able to shift ?? My current organization is 60 years old and at a size (and culture) where change is at a " g l a c i a l" pace. Would love to hear if others have had success with this outside of start up companies....
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I was very inspired by your story. As an HR consultant I get so frustrated with being approached to "solve staff issues" when actually the root cause is that staff are not happy at work and managers often do not know how to manage people so that they inspire them and coach them to reach their potential. Its great to see that this can actually happen in real life and its a real shame that companies work so hard at keeping people unhappy at work when actually it is quite simple!!
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Excellent Henry! This is first time I'm learning about you & HAPPY. You really followed the exact approach and found out great results.
I just wrote a post on my blog, where I talked about Make your Employees Feel Good, some business magazine say that Employees First, Customer Second is an approach introduced by Vineet (HCL). But I disagreed and claim that there have been many beloved companies since very long and they did empower their Employees which resulted in success of the company.
Would you please help me with the lesson "Recruit for Attitude" Thanks much.
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Hello Henry. I just would like to elaborate further on the employee empowerment. No doubt there are clear principles and rules that people understand. A point that I cannot stress enough while leading my own team is -- How can you make your colleagues or your team successful?
In my previous role, I have tried employee empowerment without the emphasis on collaboration. The team went into different directions. Many team members has their own interpretations of the vision and agendas too.
Now, the whole team nail down the vision and direction before taking action. One of the key performance that I measure for the team is collaboration. I make observation during team meetings who shows interest in helping others. And I follow up at individual level for action items as well as achivements.
I am only running a team of 4. Where it can be easily monitored. But I feel that if we can built a culture of discipline and collaboration, the requirement for monitoring would be significantly lesser.
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An interesting story Henry, and what a fine reminder to take care of our intrapersonal intelligence - which is connected to well being and ability to create at work. Congratulations on the well-deserved awards you have won!
As I read about your terrific progress related to personal satisfaction at work - I was curious about how you would apply what you learned as a newer organization - or when you were first at the place you still had 6.5 million in investment. Is there a way organizations can learn what you know - without the agony you encountered? Thoughts?
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