In my P4 white paper (see "Let Go to Grow" cover story in the November 2011 Investment Advisor), I allude to the fact that the most successful advisory firms that I work with—and many of my business management strategies—are based on the idea that great employees are happy employees. Whether or not they embrace my P4 Principles, I encourage every business owner to take this notion to heart. Every business that hopes to be more than what one person can do has to rely on employees, and the business' success, at least in part, depends on how those employees perform. And there is a growing body of research (including mine) that shows that happy employees make substantially greater contributions to the success of their firms.
In his book, "Delivering Happiness: A Path to Profits, Passion, and Purpose," CEO Tony Hsieh writes about the success of Zappos.com, an online retailer with $1 billion in annual sales.
Zappos has a nearly total focus on the happiness of its employees, under the theory that happy employees are more able and willing to contribute to the success of the firm. I've come to that same conclusion. My research on successful advisory firms shows that they tend to have happier employees, as evidenced by lower turnover, virtually no employee complaints and a substantial number of their employees receiving a "great" rating by their employers. Hsieh distills the Zappos experience into four elements of happiness: "Happiness is really about just four things," he writes: "Perceived control, perceived progress, connectedness, and vision or meaning."
Element No. 1: Perceived Control
Zappos creates "Perceived Control" through training and advancement. "In our call center, we used to give raises once a year to our reps, which they didn't really have any control over," says Hsieh. "We decided to implement a skill set system instead. We have about twenty different skill sets (think Boy Scout merit badges), with a small bump in pay associated with each of the skill sets. It's up to each individual rep to decide whether to get trained and certified on each of the skill sets. If someone chooses not to get any, then he or she simply stays at the same pay level. If someone is ambitious and wants to gain all twenty skill sets, then we let the rep decide on the right pace to achieve that. We've since found that our call center reps are much happier being in control of their pay and which skill sets they attain."
