What does it mean to be happy at work? Is it enough to keep your customers happy and not worry about your workforce? Absolutely not, says Matt Phelan, and he’s got the data to prove it. Matt was previously a farmer, then he co-founded a global data and digital marketing agency, and is now Head of Global Happiness at The Happiness Index, the startup he co-founded.
In this episode he makes the argument that keeping your staff’s happiness at the forefront in everything you do will benefit in countless ways – and could even make you more money. He’s passionate about understanding how people experience happiness, and advocates for using data to visualise the connection between employee happiness and customer happiness.
Paul Sephton: Today we are talking about happiness in the workplace. My guest is Matt Phelan, a co-founder of the startup, The Happiness Index, and their self-appointed Head of Global Happiness. Having previously co-founded a global data and digital marketing agency, Matt is passionate about understanding how people experience happiness and advocates for using data to visualize the connection between employee happiness and customer happiness. In today’s episode of The Soundbar, we’ll be revealing the real employee metrics your company should be focusing on and how to uncover your true career goals.
Matt, I am particularly excited to speak to you today, because it is the perfect time to record this. Reason being, I think you know why, but your company, The Happiness Index, is launching in Denmark this week. And as you may know, Jabra is a Danish company headquartered in Copenhagen. But let’s talk about The Happiness Index ahead of your launch in Denmark and find out a little bit more about the company and your career, which led you to founding it.
Matt Phelan: Well actually, it’s a bit of a funny one, which is my actual original part of my career was working with animals. By trade, I’m actually a farmer. My areas of interest were psychology, marketing, data. I was a geographer as well, so I love to travel and things like that. But this sort of career led me down a marketing path, because marketing combines a lot of that stuff like psychology, data, insights in many ways, and it allows you to be creative. So I studied marketing, then got into a marketing career, but was very lucky also to work for The Guardian newspaper in London via a company, a division of it called Cable, which was data and insights.
But I effectively got my dream job after that, or what I thought was my dream job. But after one day I realized that I wanted to leave that job because of one thing, which was the culture. And I knew immediately after starting that job that I was in the wrong place. So it led me, and I wish it was more like, “I woke up one day and had a dream and decided to start my first company”, but I left a company because I couldn’t handle the culture and I wasn’t the right fit, to start my own business, because I just wanted to be able to create a culture that I felt that I could be myself in. So I went very quickly from starting my dream job to the day after realizing that my dream job wasn’t always what I expected it to be. We built that company up and sold it, and now I am Head of Global Happiness and co-founder of The Happiness Index.
Paul Sephton: So, tell me a little bit more about what The Happiness Index is all about.
Matt Phelan: Again, I wish I had all these grand plans, but The Happiness Index was created by accident. We’re a bunch of geeks, really, but we built a company, a marketing agency on a very core principle that customers didn’t come first, which the first time you explain that to the people they go, “Oh my God, you must be crazy.” But our philosophy was that if you look after employees really, really well, they will look after your customers and you’ll make more money. So we grew a really fast and really incredible company on that philosophy.
Our philosophy was that if you look after employees really, really well, they will look after your customers and you’ll make more money.
But because we’re geeks and we’re data people, we weren’t happy with just having a philosophy, we felt like we had to be able to prove it. So we built a little bit of technology called The Happiness Index to track the correlation between how your staff are feeling and how your customers are feeling. We called that bit of tech The Happiness Index. Eventually lots of people started asking for it, that piece of tech, because we were using it on our customers as well. And they all said, “Can we have that tech?” And we said, “No, because it’s an internal tool.” But eventually we realized there was a demand for it, so The Happiness Index was born.
Paul Sephton: So you’ve got this deep fascination with culture after having that hiccup with your first job, where you found out really quickly that it wasn’t what you were looking for. You’ve also gone through quite a few different sort of areas of interest and industries to get to where you are today, co-founded two companies. How with hindsight would you advise someone to figure out things like culture fit and whether they are or aren’t right for a company in accelerated an amount of time as possible while still giving it an actual shot?
Matt Phelan: Yeah, I would say it’s a bit like being Goldilocks. So I just say to everyone, just try everything. Just try stuff until you find that place where it makes you feel special, because what might work for you, Paul, might not work for me and vice versa. Some people like a very set culture, some people like a very free culture. Quite often, for me it’s the fit between the brand and the employee. So I would just say, get out there, work in loads of different types of places, do all the… I’ve done all the jobs like being a dishwasher through to coding websites, all very different things, but you just got to try. Just try all these different places and pick up the good and the bad from it. And you’ll start to paint a picture around where you want to be.
Paul Sephton: These days at least, there seem to be two different and completely opposing theories around work experience. Some people say that for success, you really have to become a master of one thing, find your niche, become an expert, that is how you will find your career success. Others say that it’s definitely preferable to get as broad a skill set as possible and that that will equip you in life to have the most successful career. Does either argument resonate with you more or less?
Matt Phelan: Yeah, well I think it comes back to a wider discussion around technology, and a lot of the estimates that the data shows that technology, and I’m in part of this, and artificial intelligence and machine learning is going to replace lots of jobs. But the jobs it’s going to replace are the ones that are repetitive process. So they’re actually the jobs that we don’t want to do anyway. The reason I think there is that, is because it’s the old world and the new world, and my personal opinion is the thing that is going to be most valuable in the future is the most human aspects, which is things like storytelling and creativity.
If we just take Steve Jobs as an example, Steve Jobs’s famous definition of creativity is that it’s connecting the dots. So if you take Steve Jobs as an example, he created one of the most successful businesses of all time by focusing on effectively those early computers through to the iPod. But if you look at his story, it’s not really the story of dropping out of university for me, it’s the story of dropping out of university and trying different types of porridge, going back to the analogy, because he dropped out of university but stayed at university and just went to random courses.
He went to the calligraphy course, which became the typeset for Apple keyboards, which became whoever you want to believe copied by other people and became the standard. So I think in your earliest days, it’s a point to have a look around there, because the more stuff you do, I think it improves your deep expertise in another area. So I think it’s fine to pick one thing and go for it, but still expose yourself to other areas.
Paul Sephton: So Matt, you’re combining organizational psychology with these big data lakes you’re generating on employee satisfaction. Let’s talk a little bit around work-life balance, because you’re seeing increasing statistics on things like burnout, but you also have people who are really wanting to accelerate their careers and advance them. Where do you think the sweet spot is to be able to have a great and successful career without damaging your health or completely imbalancing your life?
Matt Phelan: One of the things that is measured a lot by companies is what’s called employee engagement. Employee engagement is the way traditionally a company measures and collects data on how their employees are performing. As an employee, you see it as the annual survey, which is a thing that HR don’t want to send out, because it takes too long. It’s the thing that you don’t want to fill out, because it takes too long to fill out, and it’s the thing that HR don’t want to analyze when they get the data back.
What we realized when we look at our data is there’s a lot of companies that are scoring really well on employee engagement, but they have high burnout rates in their staff. So, a lot of the measurements and the data that companies are collecting are from a period of time when the workforce was more monotonous, it was more factory-like, but robots and technology replaced a lot of those roles, but we haven’t changed the way that we work.
There’s a lot of companies that are scoring really well on employee engagement, but they have high burnout rates in their staff.
So again, if going back to how do you get yourself ready for your career? I think research is really important. The first podcast I did where I interviewed one of the senior marketers at Chelsea Football Club, and his great advice. He was saying, “If I’m ever interviewed somewhere, I ask as part of the interview…” At the end of the interview when they say to you, what questions have you got and your mind goes blank and you can’t think of anything, or you’ve got a couple of boring questions that you’ve planned, he always says, “Do you mind if I just sit with the team for a half a day just to get a feel for the culture here?” I would encourage people who are looking to find and make sure they don’t end up in burnout is to check the place out first.
Paul Sephton: The metrics for engagement in the workplace are clearly outdated. The other thing which I think has seen a lot of change, especially in the last decade, are the methods for retention, what we look for in value in an employer in terms of benefits and what will make us actually stay with someone. It used to be ping pong tables, foosball tables, and Friday bars, and it’s shifting more towards the right collaboration and communication technology, access to flexible working policies, maybe remote working, and these more tangible types of benefits. What do you think the main approach which managers should take these days is when it comes to attracting and retaining top talent?
Matt Phelan: I think the foosball table and all that stuff, that was sort of a red herring where people like Google could create these cool offices, couldn’t they? And they could put all the foosball tables in and then everyone else copied it and realized it didn’t make people happy. When it comes to building your program design, I think the best programs are where the manager’s empowered and then the manager is building something bespoke for that employee.
I think the best programs are where the manager’s empowered and then the manager is building something bespoke for that employee.
So one of the examples, I mean before we were getting on air, you were telling me that you’re from Cape Town. So if I’m trying to recruit you and we’re having a conversation and you make it clear to me that you have family in Cape Town that you want to see four times a year, but that means you wouldn’t have enough holiday to get back there and all this kind of stuff. If you’re saying to me, allowing you to work from Cape Town like four weeks a year is going to be the difference, then that’s what I should be doing. I think one the problems, and I can’t talk for global law, but the way that UK law works is that there’s an equality law. So if I treat you in one way, but I don’t allow someone else to have that, then they may have a case of discrimination against them. The way and the environment and the culture has been tailored to that individual employee so that they can perform for themselves and for the company.
Paul Sephton: As someone who has co-founded more than one company, you’re no stranger to leading from the front when it comes to setting that cultural tone and maintaining it. But I’m sure of all people, you know then that it’s really tricky to handle culture when it comes to a company with high growth and scaling that. How do you think the best way to sustain a culture is when you’re undergoing growth or turbulent times as a company and it can be easy to perhaps lose sight of?
Matt Phelan: So the first thing is, I’ve made loads of mistakes in this area. The first three to four years of our first company, we had an absolutely wicked culture. It was so good. It was just the best place to work, but we made the assumption that that meant it was always going to be good and we neglected it in a couple of moves we did when we were expanding it. I made the mistake of not realizing that the foundation of everything is culture. I see culture now as like an ecosystem in a plant and it’s something you need to continually water. Those little things can build up into big things. Technology can help because it can take data and turn it into insight and it can scale it all up. So if you’re a company of 10,000 employees, then technology is absolutely needed to do that. But don’t forget on the ground level, just making sure you’re coaching your managers on how to be a coach themselves. That type of stuff is just going to be so powerful.
I see culture now as like an ecosystem in a plant and it’s something you need to continually water. Those little things can build up into big things. Technology can help because it can take data and turn it into insight and it can scale it all up.
Paul Sephton: So most people will always just say, “Oh, if you don’t like a company, leave, go.” But I think it’s a bit more complex for a lot of people in work where for whatever dynamics or reasons, personal or professional, they’re not in a position to leave and they might perhaps try to instead tackle the company culture or be a positive tool to affect change in it. How do you think people should go about trying to change a culture or engage with it if they’re in that position before actually deciding that they do need to find somewhere else to go to?
Matt Phelan: I think ultimately it comes from wherever the leadership in the company is coming from. So quite often we’re engaged by the HR director, one of the first questions I ask them is, “Does the CEO believe in what you are doing?” Because if it’s a tick box exercise, it doesn’t matter how much money you spend with The Happiness Index or on our competitors or whatever, it’s going to have limited impact. The best cultures are getting rid of command and control and it’s all about networked communities. They’re getting rid of the hierarchies. But if someone is that real, that leader that just sees it’s still all about hierarchy, it’s going to be really struggle to change it.
But there are great small ways that you can do it. You can volunteer to set up the culture committee. You can say that you’d like to then take that feedback and put it into a report for the board. So I don’t believe there’s any company anywhere where you can’t make an impact. One of the things that data does really well is it depersonalizes and takes it away from opinion. So if you can start collecting data, you can turn up into meetings and effectively break the barriers down because you’re saying, let’s just say you did a small survey of say 50 to a hundred people and you just present that into a management meeting and say, “Well, this is what the people are feeling. It’s all anonymized.” But it’s not your opinion. You’re not turning up to the management team or the CEO and belittling them. You’re just saying, “Look, 25% of people think that if we made this change, it’s going to be a better place to work.” So I think collecting data, even if it’s at its basic level will really help people do that.
Paul Sephton: Matt, you guys are in this unique position where you’re combining big data and these psychological insights and you’re really marrying the two in terms of the outcomes you’re then advising on. Do you think that there’s some kind of sweet spot which people can meet or marry when it comes to big data and psychology? Or do you find that there’s sort of resistance to one or the other because it seems to be an either or, but you guys are doing a very good job of mixing them?
Matt Phelan: We go right into the neuroscience of this stuff. What you’ve got is you’ve got different schools of thought, but in my opinion, one of the barriers and one of the challenging paradoxes is experience and gut instinct versus data. But when you really look at it and you get into the neuroscience, the reality is a lot of your gut instinct and experience and feel are actually informed by data. You just don’t know how it’s informing you. What we’re trying to do with all this stuff is allow data to enhance your instincts because you got to remember that humans evolved and evolved and evolved over millions of years to where we are now. What we’ve got as a human is actually an incredible, incredible instinct. So it’s not about pushing the individual in the human away, it’s about giving the human more data to build, to make the right decisions.
One of the barriers and one of the challenging paradoxes is experience and gut instinct versus data
Paul Sephton: I think that’s something we see a lot of at Jabra when it comes to the fear around AI and it being something which, like we discussed earlier, is seen by many as something which will replace jobs. The way we look at it is that it’s going to be a tool which will actually, along with the data regenerates, greatly assist us in our jobs and only make us more productive and more capable of high performance in our careers.
Matt Phelan: Absolutely. In the same way that your mobile phone can be good and bad for you, but at the end of the day it’s got all the bits of information in the well that you need to do your job, but there’s downside to it like being on social media and stuff like that too much. But getting the balance right between the two is so important for the future.
Paul Sephton: Speaking of productivity, how at The Happiness Index do you guys relate something like how happy you are to how productive you are at work?
Matt Phelan: What we’re finding is happiness is what the employee wants. Engagement is what the employer wants. So if you get the balance between the two, you create a thriving culture. If you just get happiness without engagement, you’ve got everyone just sitting around smoking doobies. So there’s good and bad both sides, but getting the balance right of the two because an individual now, because of things like crowd funding, technology, whatever, any of us can start a business tomorrow and have it up and running within 24 hours.
It could be crowd funding, the access to finance there that companies are realizing that it’s a two way street. They don’t have the power over the individual that they used to have. And what I’m seeing happen now is that people used to be able to ignore it and say, “Well we’ll treat the customers well and we’ll treat the staff like a sweatshop.” But the reality is now, consumers are now more aware of what they’re buying.
So not only do they look at things like where is this product being sourced? They actually look at how companies treat their employees. The reality is the way you treat your employees is now impacting your brand. So we’re actually seeing more merging of the HR department and the marketing department. So even in our own organization, we’ve merged HR and marketing into one department called Humans. So my co founder, Chris Highland, he’s the head of Humans because he heads up HR and marketing. So we’ve seen a massive merger of all this stuff into brand.
The reality is the way you treat your employees is now impacting your brand. So we’re actually seeing more merging of the HR department and the marketing department.
Paul Sephton: Major disruption all round it seems with job titles. And we’re seeing things like marketing with customer satisfaction or customer experience getting blended. Do you think that HR have a lot of catching up to do generally across all fields? Or what’s your temperature check right now on how in touch and advanced HR is as a function within most of the businesses you’re working in?
Matt Phelan: I was quite shocked because I only joined the HR community about nine to 10 months ago and I was quite shocked at where they are with data and insight. I would say they are where marketing was in about 2009, 2010 and I think it’s a commercial money thing, which is big budgets went into advertising and marketing industries because those big budgets they were said, spend that money there because you’re going to win more customers and you’re going to make more money. That’s a good business investment. And I just think HR and the people side of it has been under invested. So you’re getting people like myself that have come in from a different industry and just applying what we know alongside HR people. So we’re just working in collaboration with HR people to give them what they’ve always wanted, which is data and insight to build these thriving cultures. So, yeah, I do think it’s a good 10 years behind where marketing is.
It’s been a great change to see in the last little while how much people care about where they work, how much people care about what brands they buy and the purpose of those brands. And it’s interesting to see you talking about it now because I’m sure it must affect people’s happiness a huge amount if they find that purpose in their company. Now, I’m not about to suggest that we’re all going to love our jobs every second of every day, but in the longterm it must pay off a lot. If you are working for a company or brand which you fully buy into in terms of their purpose. How much does that purpose affect our success in our careers and our happiness overall in our work? And should that be the number one thing we look for when we’re joining a company?
I now see the leaders of the business, the CEO, so 80% of CEOs used to come from a finance background. You’re getting more marketers in there. I expect to see more HR people take that path because I think the CEO’s role now is to only do two things, which is to communicate the vision and purpose and protect the values of the organization. Because if a company in the future doesn’t have a purpose, the right people are not going to join it. You’re not going to have the right values and they’re not going to grow. So I think all this stuff is slowly coming together and some companies are just not realizing it and they’re just going to find themselves very, very quickly out of fashion and out of business.
Because if a company in the future doesn’t have a purpose, the right people are not going to join it. You’re not going to have the right values and they’re not going to grow.
Paul Sephton: So if you look at the overall picture right now and you look at your data Matt, which countries or regions do you think are leading the race in terms of taking the most progressive approach here?
Matt Phelan: More than national based, I’m seeing it more company-based. And there was a stat the other day that 50% of employees expect their CEO to have a view on social matters. People think that one of the best ways to change the world is through companies rather than through the governments. So there’s a massive trend towards that and people expecting that. The big example we have in the UK is the Cadbury’s chocolate maker, they created places for the workers to live in a place called Bournville. We’re working with a big huge tea company at the moment that’s building houses for their workers in Sri Lanka and Kenya. We’re seeing companies using it to get a massive competitive advantage over their competitors.
And even in our marketing agency, we put playrooms in. So if you wanted to bring your children to work you could and we did it for the right reasons. We did it for good, but as soon as you’re giving a potential client a tour of your office and they see how you look after your staff, they want to work with you because they look at you and think, “Wow, these guys are actually looking after people. I think we’d like to be part of that.” The return on investment on all these things is much higher than you think. It’s a boring point but it comes back to data and actually measuring the full impact of this because, so I actually think it’s cheaper and better business sense to invest and spend money looking after your staff.
Paul Sephton: It’s an interesting one in terms of how business is changing and growing more global and like we had touched on remote work, do you think that the future of work for us in terms of our concepts of a company where you work and how you work is going to become far more liquid or change in definition or outlook based on the fluidity with which we can now access jobs and work for people on a global scale?
Matt Phelan: My view of the future is that you become Paul.com and I become Matt.com and we collaborate around purposes that we’re all passionate about and we can help with. And sometimes that purpose may exist for 15 years, sometimes it may exist for 15 seconds and I think what a company becomes is not this big beast that puts people through their payroll and employs people, I think the great companies are the ones that are going to collaborate all these people together on the big visions because what’s going to become the key winning point is companies that learn to treat people that are not their direct employees really well.
Paul Sephton: Will this constant search for purpose start to affect entrepreneurship? Because if there’s anything that’s become prevalent in the last few years, I would say it’s the on Silicon Valley innovation and in certain cultures, the hype around entrepreneurship and sort of lucking out with that dream. Do you think that as we look for careers, which drive more and more purpose, we will look to join brands and that’ll have a negative impact on entrepreneurship? Or that it’ll actually lead more and more people to branch out and start their own businesses based on a purpose which they feel they have?
Matt Phelan: Yeah, I just think it’s the war for talent. If you look, a lot of people left the traditional industries like banking and finance to join the tech companies because they were cool and funky because they had foosball tables, but that’s not enough. And there’s companies out there that have moved to the next level around like four day work weeks and all that kind of stuff. And the battle for talent is just going to continue. The power has moved from the company to the individual and that battle for talent is going to get bigger and bigger. And if we look at our data, what’s the number one thing that makes your employees happier is them being appreciated and respected. And the number one thing that employees say they want more of currently is flexibility.
So building a company around those two things make sense now. If you get to ultimate flexible and you achieve that, there’s going to move onto the next thing. And that’s where the sort of psychology and the Maslow hierarchy needs is quite outdated now. But it’s still a great model to look at is what an employee framework should look like. Because if you look down the bottom, your safety and your shelter, they’re the first two things you’ve got to be provided like a wage, a potential roof or an office or whatever. As people move up the Maslow hierarchy of needs, companies have to provide more of that and we’re starting to see it in the wellbeing space now where employees are starting to expect their employer to help out with financial advice. The level that companies need to go to is increasing and those that just keep down at the basic level of money are going to lose out.
Paul Sephton: Matt, let’s take a second to talk to the 18 year old version of yourself because that guy was working on a farm or trained in farming, working with animals, and then ended up going down this wild rabbit hole of marketing, co-founding two companies, and just this week launching in Copenhagen The Happiness Index. What advice do you think in hindsight you would give to yourself with all of the perspective you now have?
Matt Phelan: Well, I just want to tell you one thing, because that I actually interviewed an 18 year old developer a couple of weeks back and he’s brilliant, if we could get him, it would be a massive thing because we’d have got him from going to some big tech company or something. And I asked him what his dream job looked like. And he said, “Any job where I can work on my laptop anywhere around the world where I don’t have to go into an office.” So I just want to give you an insight in what an 18 year old thinks like now. So for us, we don’t care where he works, but if one of our competitors is offering him a job, offers him exactly the same package as us, but says, “You’ve got a report to London, Victoria every morning at 8:30 AM and be here until 6:00 PM”, we’re going to win that battle for talent.
So if I was giving my 18 year old advice, I would have done more of a Goldilocks stuff. I would have traveled and experienced more cultures. And I think it’s good to get a mix of places, like a mix of countries, places. I’m really, the fact I grew up on a farm and I worked with animals really helps me because when you work with animals, they can’t speak to you, so you have to get really good at nonverbal communication. That’s just two examples of working on a farm versus working in tech, but if the battle in the future is based on creativity, the definition of creativity is connecting the dots, then if I’m advising my old 18 year old self or an 18 year old that’s listening to this podcast, then you better get out there and see some dots so later in your career you can connect them up and become successful.
Paul Sephton: And now you’re also interviewing a lot of people for jobs. If you were looking for potential or when you’re sifting through people’s CVs and trying to figure out who’s going to be a good fit, what stands out for you or jumps off the page?
Matt Phelan: Oh, that is such a good question, but I just think it literally goes back to how much are they going to prepare to prove to you that they believe in it? Because we’ve struck gold with the happiness index in the fact that every person and their dog wants to come and work for us. They read us stuff like, “freedom to be human”, and, “everyone should be treated like a human, not a number.” And they read that stuff and you almost meet people and they go, “Oh my God, I want to work for you and I don’t even know what you do.” We get this kind of mania, which is great, but that means the quantity of people who want to work is well outstripped, but what we really look for is someone that goes above and beyond.
And what I mean by that is someone who just comes in and goes, “Oh my God, Matt, look at this. I’ve just connected a couple of data points here.” Or, “I did this,” or, “I’ve gone and mystery shopped a customer’s in store,” or, “I’ve gone and spoke to five employees that work in the department store down the road and got some feedback on how they’re feeling about how they work there.” So for me it’s words… What is it? What’s the saying? Actions speak louder than words. So I think if you’re going into an interview, it comes down to quality, not quantity. Find the places you really want to go and work and go and show them. Show them how much you want to work there, don’t just rock up for an interview and answer the questions, actually go and do something deep that’s going to impress that company.
Paul Sephton: Matt, it’s been a whirlwind. We have ping ponged from what you would do as an employer to what you would do as an employee, we’ve gone from 18 year old you to present day you, and we’ve sifted through quite a few industry insights from both sides of the fence. Thank you so much for joining me today.
Matt Phelan: Thanks Paul. If anyone listening has any questions, just drop me a line.