Ian Gotts
April 26, 2017

Improving Company Culture: Why happier teams are more productive. Fact.

How can you improve your company culture to be more productive?

There’s a great deal of research that supports the hunch that happier teams and individuals are more productive. CEO of iOpener and author of Happiness at Work ,Jessica Pryce-Jones tells Forbes, “Happiness at work is closely correlated with a culture of greater performance and productivity as well as greater energy, better reviews, faster promotion, higher income, better health, and increased happiness with life. So it’s good for organizations and individuals, too.”

iOpener developed questionnaires, conducted focus groups, and aggregated results from 3,000 respondents across all disciplines in 79 countries. Over 10 percent of the respondents were in IT. The numbers say it all. The happiest employees are:

  • 180 percent more energized
  • 155 percent happier with their jobs
  • 150 percent happier with life
  • 108 percent more engaged
  • 50 percent more motivated

The last stat is the kicker: happy employees are 50 percent more productive.

The happiest employees of the those surveyed reported that they spent 80 percent of their week on work-related tasks, compared with the unhappiest workers, who spent only 40 percent. This means that the least happy are only doing two days’ worth of work per week, compared with their happiest colleagues, who are working four days’ worth.


So what is “happy?”

A Harvard Business School research project interviewed 600 managers and asked them to use the following list to rank what they thought motivated their teams: recognition, incentives, interpersonal support, support for making progress, and clear goals. Mangers chose recognition as the top motivator, but the managers were wrong.

In a multiyear research project tracking the “day-to-day activities, emotions, and motivation levels of hundreds of knowledge workers in a wide variety of settings,” recognition was the least motivating factor. The top ranked motivator was “making progress.” According to the study, the best way to kill an employee’s mojo, motivation, and sense of accomplishment is to allow him or her to be stymied by roadblocks. When workers feel they’re making headway, their drive to succeed is at its peak.

No one comes in to work determined to do a bad job. But often it seems that companies make it difficult for people to do a good job; goals are unclear, management is dysfunctional, processes are convoluted or opaque, and metrics reward the wrong behavior. All these can and should be fixed. This is the most critical role of management.

So, one very simple measure of happiness is “making measurable progress.”

Improve your productivity with a Company culture of Operational Excellence



The best companies have the best cultures

It should come as no surprise to anyone that companies that consistently top Fortune’s annual100 Best Companies to Work For” list understand how to create and nurture the right culture. The list has been published since the 1980s and shows consistent trends:

  • The best places to work are getting even better as the war for talent increases
  • Executives are focusing on company culture as a competitive tool
  • The leaders listen to the needs of their staff and create policies and programs to match them

According to a Deloitte survey of 3,300 executives, a company’s culture is more important than its leadership. To build a strong culture, a company must demonstrate clear values, prove it can be trusted, show that it cares, and work to build strong relationships between coworkers.

What shapes a culture is the set of values that lays out how everyone in the organization should behave. These values influence day-to-day decisions. If you want to see which companies are proud of their values, simply Google “company values.” Great values and culture are an important recruitment tool. The most important factor today when professionals are considering moving to a new company is whether or not the company under consideration is a great place to work. The company’s values will attract a certain sort of person, and that person reinforces the culture. It’s a virtuous circle.

Screenshot 2017-04-26 17.03.39.png

24/7 Wall St, a financial news and content company, set out to identify the worst companies to work for. They analyzed thousands of employee reviews from jobs and career website Glassdoor, which has compiled data on more than 400,000 companies around the world. Common traits at the worst companies were dysfunctional culture and high staff turnover, which encourages staff to protect themselves by looking out for themselves. By contrast, at the best companies, the culture enables employees to have the confidence to build stronger, trusting relationships with coworkers.

The authors of the 100 Best Companies list note that “the key to creating a great workplace [is] not a prescriptive set of employee benefits, programs and practices, but the building of high-quality relationships in the workplace.

So it’s not the free gourmet food and other perks at Google that have made it No. 1 for six of the last eight years. It’s being able to work surrounded by smart, driven people. One Googler summed it up this way: The best perk of working at Google is working at Google.”

And Google works hard. In fact, it has made a science out of making it easy to build and maintain relationships in the workplace. Free food has a hand in the relationship building. It forces people to congregate at mealtimes, not huddle down in their cubicles. The lines are kept to three to four minutes to encourage discussion. The long tables are designed so employees can meet more people. The tables are close enough together so people will bump into each other while getting to their seats. This is all planned relationship building—and great food never hurts.


Read More: Former Head of Global Operations & Business Excellence Bala Venkataramanan's first-hand experience of the Google Company Culture


Is it any different for the technology sector?

Does the same hold true for those in IT related work;  small and often distributed teams and demanding deadlines; it’s fluid and fast-paced. Do the principles of strong culture and employee relationships still apply? Are they able to drive happier staff and, ultimately, greater productivity?

The answer is a resounding yes. Fourteen companies on the 100 Best Companies list are technology companies. They all claim to be innovative and have high growth.

If we look at the iOpener research data for IT teams, the summary doesn’t make great reading:

  • Happy: They perceive that their performance and happiness at work are only average.
  • Goal achievement: Over half of them fall into the lowest two categories.
  • Motivation: A third are in the lowest category. So while they will do the work, many don’t find it very motivating. This may be because their goals are hard to achieve. Goals aren’t helpful when they’re impossible.
  • Pride: This is surprisingly low—a third of the people don’t feel proud of where they work. This may be tied to the next point.
  • Culture: Responses polarize around culture—some perceive that it’s fair, while others see it as deeply unfair. This reflects poorly on leadership.


Everyone is responsible for happiness

Even if your company culture isn’t perfect, it’s possible to create a microculture for your agile project, which will in turn make it easy to see measurable progress. And measurable progress, if you remember, is a clear driver of happy staff.

Everyone in the organization, from the top down, is responsible for designing and building an environment where workers can be happy: executives, managers, team leaders, and team members. Everyone makes a contribution. It’s said that a person influences the culture more than the culture influences the person—one bad apple can have a huge effect.


Improving Productivity with a Culture of Structure Problem Solving


Executive team

Executives are responsible for putting in place everything needed to drive and reinforce the values and culture of the company. They need to set a very clear mission so that everyone, no matter their role, is clear on how they contribute to it. Crafting a mission statement isn’t easy. Often they can be too generic, as in this example from marketing guru Guy Kawasaki’s book, Reality Check: “To deliver superior quality products and services for our customers and communities through leadership, innovation, and partnerships.” Yawn…that could be any company.

A great mission statement is tight, inspirational, and emotional. Kawasaki cites these examples:

  • Federal Express: “Peace of mind”
  • Nike: “Authentic athletic performance”
  • Target: “Democratize design”
  • Mary Kay: “Enriching women’s lives”

On May 25, 1961, before many of us were born, John F. Kennedy famously united the US around the simple mission of bringing a man to the moon and back.

In fact, JFK’s full statement to Congress was, “I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth…But in a very real sense, it will not be one man going to the moon. If we make this judgment affirmatively, it will be an entire nation. For all of us must work to put him there.” JFK recognized the importance of aligning everyone around a very clear goal.


Read More: Improving the culture of your team - Between Business & I.T.


Managers and team leaders

Departmental managers and team leaders need to reinforce company culture with their actions and recruitment decisions. They should ensure that their teams have a clear understanding of the scope and deliverables of their projects. But it’s more than that. Their teams need to be really engaged if they’re going to do their best work. That is best accomplished by having a mantra for the project which may different from but related to the company mission.

Team leaders have another critical role that is even more important than reporting and monitoring: looking ahead and working to remove obstacles or roadblocks before they hit the team. Finally, they need to make sure that the team dynamics and tools encourage collaboration.


How to improve productivity with happier teams and culture transformation


The team

Team members also have a role to play. They need to show up, be engaged, and strive to do their best work.


Read More: Culture Transformation - Performance Metrics that Matter and Effective Productivity Measures


Your life’s best work

A beautiful example of all of this coming together is Slack.

After seven months’ development on Slack, just two weeks before the launch of the Preview Release, and way before Slack was a headline-grabbing success, the team was sent a memo titled “We don’t sell saddles here.” This memo has just been made public.

I believe this memo was a watershed moment. It got the team refocused on what they were doing and why it was important. It wasn’t even about the product features. It wasn’t about what Slack users could do with the product but what Slack users could achieve.

While the Saddles memo is long, it’s worth reading in full.

Why saddles? Because sometimes people grasp new concepts better with a simple analogy. The memo talks about a hypothetical Acme Saddle Company. When selling saddles, Acme sales people shouldn’t be talking about the quality of the leather but rather selling horseback riding. It lets Acme think big and potentially be big.

A real example of this is Harley-Davidson. The motorcycle company doesn’t sell motorcycles—it sells a lifestyle. Their mission statement is “Fulfilling dreams of personal freedom is more than a phrase. It’s our purpose and our passion.” Also, the company knows a thing about loyalty. How many of your customers will tattoo your company logo on their bodies?

Back to the memo. The last section heading asks a simple question: “Why?” This question is answered in the final sentence: “The answer to ‘Why?’ is ‘because why the f*&^ else would you even want to be alive but to do things as well as you can?’ Now: let’s do this.”


It’s the progress, stupid

Progress is what ultimately motivates us all and makes us happy—working on a team where we feel we’re making progress, working alongside people we trust and connect with, creating something really important.


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