The Happiness Advantage and How It Improves Productivity

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Clint Fontanella
Clint Fontanella


What comes first, unhappy employees or a drop in productivity? This may seem like a "chicken or the egg," debate as you could make the case for either option in this scenario. However, a new psychology principle provides an answer to this problem that many business owners have.

After studying for 12 years at Harvard University, Founder and CEO of GoodThink Inc., Shawn Achor, wrote his best-selling book, "The Happiness Advantage" which delves into the connection between happiness and success as well as why people struggle to find satisfaction in their work.

While these lessons were intended for individual help, many business owners have benefited from applying them to their entire company because this approach makes it easier to motivate employees and rally them around your business's goals.

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In this post, let's break down the Happiness Advantage then provide some ways you can incorporate it into your business.

The Happiness Advantage provides insight into subconscious decision-making and the roadblocks that prevent people from achieving their goals.

In his book, Achor describes the Happiness Advantage using seven core principles. These principles act as guidelines that people use to make significant changes in their lives. Let's review each one below.

Seven Principles of Positive Psychology

1. The Happiness Advantage

The first principle summarizes the overall idea of this theory. It states that when people are happy, they perform to the best of their abilities and therefore, are more successful. Rather than working hard to be happier, employees need to be satisfied in the present to achieve their goals.

This idea can be conflicting. That's because many of us were raised to believe that hard work leads to success — myself included. However, this principle doesn't devalue work ethic. Rather, it states that work ethic can be optimized if the employee is happy with their position.

2. The Fulcrum & The Leverdictate

In his book, Achor notes that happiness is subjective. People experience happiness based on how they perceive their environment and daily activities. He says, "happiness is not about lying to ourselves, or turning a blind eye to the negative, but about adjusting our brain so that we see the ways to rise above our circumstances."

This means that we can dictate our happiness by recognizing roadblocks and identifying how to overcome them. Once the path to success is defined, it becomes much easier to provoke change. Here's an example Achor uses to describe how we can change our attitude based on our interruption of a situation.

3. The Tetris Effect

The Tetris Effect refers to the brain's ability to scan an environment for positive and negative outcomes. Like Tetris, our minds try to find the outcome that best fits our understanding of the situation. With this principle, Achor believes that our brains can get stuck looking for solely positive or solely negative results based on our past experiences.

To combat negativity, Achor recommends ended each day by looking for positive experiences. By searching for happiness in your day-to-day routine, you're training your brain to actively seek out positive outcomes. This can help you recognize possibilities and workarounds that you may not have initially considered.

4. Falling Up

We've all heard some sort of cliché around this idea. My favorite is, "failure is just finding out what didn't work."

This is the idea that failure is a stepping stone to success. By looking at our missteps through a positive lens, we develop tenacity and get closer to achieving our goals. Viewing it negatively, however, will most likely lead to more failure which navigates us away from the desired outcome.

5. The Zorro Circle

In all honesty, I've never seen The Mask of Zorro. However, when I googled the scene Achor was referring to — the Zorro Circle — I knew exactly what he was talking about in his book. (Watch that scene here — no spoilers!).

When we're faced with stressful or difficult situations, we need to accomplish the small tasks first, then move onto the larger ones. This gives us a feeling of control and makes obstacles seem more surmountable. By solving multiple small problems in a row, we gain momentum to resolve the overall issue that's affecting us.

6. The 20-Second Rule

The 20-second rule is a guideline that helps people stay committed to their goals. This rule states that if you want to accomplish a goal, you need to remove any roadblocks that inhibit your ability to do so. This certainly rings true to me; I would find it extremely challenging to accomplish tasks if there are plenty of distractions standing in the way.

Ideally, you position yourself in a way that only requires 20 seconds to take the next step toward achieving your goal.

7. Social Investment

In his studies, Achor found a 0.7 correlation between happiness and social support. If you're like me and have no idea how correlation coefficients work, 0.7 means that there's a strong relationship between our happiness and how we interact with our friends and family.

Change is difficult, especially when we're trying to change habits that are ingrained into our daily routine. When our will power is tested, we need to rely on support from our friends and family.

Now that we've covered the fundamentals of the Happiness Advantage, let's review the benefits it will provide to your business.

Benefits of the Happiness Advantage

The Happiness Advantage was initially designed to make individuals happier. However, when applied to an entire business, this philosophy produces benefits that go beyond employee satisfaction. Let's review some of those advantages below.

Customer Satisfaction

When employees are happy that satisfaction trickles down to customers. Happy employees work harder because fewer roadblocks are preventing them from reaching their goals. They spend less time thinking about their own problems and more time considering the customers' needs. Whether they're in a customer-facing role or not, if your employees are working their hardest your customers will reap the benefits.


As we mentioned above, happy employees perform at their peak ability. That's because they're motivated and passionate about the task they're completing.

According to Achor's research, having a positive mindset can increase your brain's productivity by 31% compared to when it is in a negative, neutral, or stressed state. Additionally, having a positive mindset can improve your sales performance by 37%.

The graphic below is from a Gallup survey and it shows how companies with more employee engagement outperform companies well less engagement. In this case, companies in the top quartile were 21% more productive than companies in the bottom quartile. This means that the more employee participation you have, the more value you'll deliver to customers.

gallup employee satisfaction the happiness advantage

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Employee Retention

The best companies are built by teams filled with talented and dedicated employees. However, talent is highly valuable and if your employees aren't happy, competitors will lure away your best people. And, if you lose those employees, your business's growth may plateau, or worse, grind to a sudden halt.

By incorporating the Happiness Advantage into your corporate culture, you can retain your top-talent before they turn elsewhere. In fact, take a look at the section below for some tips and ideas you can use to infuse the Happiness Advantage into your business.

How to Use the Happiness Advantage

1. Employee Satisfaction Surveys

It's hard to make your employees happier when you don't know their problems. If you assume you do, you may make matters worse by enacting changes without their consideration

Instead, ask employees how they feel using satisfaction surveys like eNPS. eNPS, or employee Net Promoter Score®, is a one-question survey that asks employees if they'd recommend others to work at your company. Depending on their answer, employees are prompted with a follow-up question asking them to provide additional details. Even though the responses are anonymous, this system creates a quick and efficient feedback loop for the company to monitor employee satisfaction.

2. Career Development Programs

It's easier for employees to engage with your business when you take the time to invest in their development. Every employee wants to succeed, but some may not know how they can achieve their long-term goals. Development programs outline the path that your employees can follow to take the next step in their careers. This makes promotions seem more attainable and lets employees know that you're invested in their growth.

3. Corporate Incentives & Benefits

The number of incentives and benefits that your business provides may depend on your size and revenue. However, if there's an opportunity to add more value to the employee's experience your business should take advantage of it, even if it comes at a small sacrifice.

One company that did exactly this was the nutrition bar, Quest. Quest was founded in 2011 and in three years has become the second fastest-growing private company in the United States

In an interview with Brand Builder, its founder Tom Bilyeu said that — aside from money — autonomy, mastery, purpose, and significance are the four things that employees value most in their careers. People want more independence when doing their work, master news skills that forward their careers, a sense of purpose and belonging, and a feeling of significance when work is completed. By building his company around these values, Bilyeu was able to transform his organization from a three-man team to a 1.3K employee operation.

4. Networking Events

Networking events connect employees with management and senior-level staff in settings that they may not have chances to do otherwise. This not only helps them with career development, but it also creates stronger bonds within your internal teams. Employees feel more connected to your business if they're able to chat with executives and management that may not be available on a day-to-day basis.

5. Culture Code

A culture code is a document that outlines how a business will treat its employees and how employees are expected to behave in return. This resource makes your company's values clear and shows employees what they can expect when working at your business. By distributing this code to every employee, you'll hold management accountable to your company's standards.

At HubSpot, we have a culture code that each employee is shown during the application process. It highlights our company's core values and explains why our culture is unique. This lets applicants know that we take these values seriously and are invested in our team's overall satisfaction.

If you're looking to measure employee satisfaction, read about eNPS.

Editor's note: This post was originally published in October 2019 and has been updated for comprehensiveness.

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