World-first wellbeing budget
I’ve got a crush on New Zealand’s Prime Minister, Jacinda Arden. There, I’ve said it. She recently posted a video on LinkedIn about her time at the World Economic Forum in Davos and conversations she’d had there about how governments will measure their success in the future. That GDP is too narrow a measure and has become a proxy for measuring the wellbeing of a nation. New Zealand will be adopting OECD measures including a Living Standards Framework (LSF). 2019 sees the introduction of a world-first wellbeing budget and 4 wellbeing criteria for success.
The LSF looks across the human, social, natural and financial/physical aspects of those things that affect our wellbeing – the ‘four capitals’. It is a tool that emphasises the diversity of outcomes meaningful for New Zealanders, and helps the Treasury to analyse, measure and compare those outcomes through a wide and evolving set of indicators.
Critically, these 4 Capital measures will impact how the NZ government makes policy decisions. Of the 4; Social Capital is defined as a sense of belonging (cultural identity) and Human Capital includes physical and mental health. I believe this sets an interesting precedent; if governments are in agreement that economic measures like GDP are no longer enough to benchmark the health of a nation; where does that leave how we measure the health of our organisations?
Dying for a paycheck
This rather morbid subheading is in fact the name of a book by Jeffrey Pfeffer, a Stamford business professor who writes about how modern management practices are toxic to employees hurting engagement, increasing turnover and destroying their physical and emotional health and company performance. Let’s face it employee wellbeing has made it into the top three of priorities for business and for very good reason...
“95% of human resource leaders say that employee burnout is sabotaging their workforce. Key factors driving burnout are: poor management (30%), employees seeing no clear connection between their role and corporate strategy (29%) and a negative workplace culture (26%). Additionally, employees are most likely to leave their company if they don't feel valued (60%).” - (Research conducted by The Workforce Institute @Kronos).
As an Anthropologist and leadership coach; I study corporate culture and belief systems, what’s fascinating to me is how the convergence of social science with neuroscience and behavioural genetics is shining a bright light on defining the conditions optimal for humans to not only survive but also to thrive at work.
If you want to get to grips with the employee burnout epidemic; you need first, to understand, the relationship between emotional intelligence and wellbeing.
What is emotional intelligence?
EI is a set of social and emotional skills, that influence the way we perceive and express ourselves, develop and maintain social relationships, cope with challenges and use emotional information in an effective and meaningful way.
Why do humans have emotions?
I always ask clients this question and most often get met with blank faces. The simple answer is survival. Strong emotions give us the energy to move away (think fight or flight response) or towards something or someone (e.g. falling in love). Emotions are signals that contain data. Emotions can be managed. Emotions can be used to influence yourself and others. EQ + IQ together produce the optimum decision-making. EQ is a proven indicator of performance and leadership.
“67% of abilities essential for effective performance are emotional and 90% of great leaders are high in emotional intelligence.” - Daniel Goleman
At the start of any leadership development programme I collect EI data at both an individual and a team level using an MHS assessment tool called the EQ-i 2.0.
Wellbeing is different from the other EI capabilities in that happiness both contributes to and is a product of EI.
Out of 15 emotional intelligence traits there are 4 that are most typically tied to happiness defined as our sense of wellbeing, they are;
● Self-regard; believing in oneself and living according to our values
● Interpersonal relationships; well-developed relationships serve as a buffer from the negative effects of life’s daily demands.
● Self-actualisation; happiness comes from a willingness to learn and grow on a journey aligned with our values
● Optimism; in the face of setback and disappointment, the ability to recover and claim a happy state is contingent on one’s level of optimism
Two out of these four wellbeing traits are directly linked to self-perception. Our sense of self is developed from birth, is influenced by nature and nurture and tied to a set of values that is unique to each of us. When personal values are not congruent with organisational values expressed through leader behaviours and expectations; emotional wellbeing is compromised. In simple terms; when humans don’t trust and respect their leaders, the internal fire that powers their motivation and high level performance gets extinguished.
When you add to this long working hours, unfair compensation, loneliness and an unreasonable workload you have the perfect conditions for employee burnout.
What have you done for your shareholders today?
Reflecting on the work of the NZ government; business and indeed the wider investment community now has an incredible opportunity to adopt a broader framework for measuring success outside of profitability, EPS and EBITDA. In the UK; the new corporate governance code (effective Jan-19) requires public organisations to report on culture and values as it relates to performance. The logical next step is to report on wellbeing factors; a wellbeing index perhaps?
I challenge the business world to start measuring and reporting on #humansustainability factors across; mental, physical and emotional fitness. Humans engage and perform at their very best when they feel; accepted; valued; in control and safe. It’s not rocket science.
I’m currently looking to partner with UK organisations wishing to measure EI well-being factors and how they correlate with both performance and engagement. Please get in touch.
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