The Economics of Happiness

Chip Conley knows what matters. That’s because, as CEO of a boutique hotel chain in the Bay Area, he saw what it took to go from rock bottom after the dot.com crash ruined the silicon valley hotel business, to the peak of success afterward.

Ironically, for his business to be triumphant in that tough time, it took a commitment to people over profits. It was meaning over money that actually brought in the money. Specifically, Conley channeled Abraham Maslow, and his Hierarchy of Needs pyramid, to determine how he could focus on the highest needs of his employees, customers and investors. It was brilliant in it’s simplicity. And it worked. Not only did they survive the downturn, his empire grew considerably to it’s current status of the second largest boutique hotel chain in the United States.

Conley expounded on his Maslow applied to business theory in an amazing book called Peak: How Great Companies Get Their Mojo from Maslow. It’s one of my personal favorite business books because it is so comprehensive, practical, insightful and full of references to additional material. If there is one thing I would give to someone who wants the road-map for building a great company – this is it.

But Chip Conley isn’t done. Next he’s turning his sights beyond a single business to making the right connections between success and happiness in how we measure all businesses. People will manage what they measure, and Conley saw that when he started measuring happiness drivers in his business, then he could increase the engagement of his stakeholders, which in turn increased profits. And in this case the same is true for our economy. We just need to start measuring the right things.

Today the top measure of our economic success is Gross Domestic Product (GDP), which counts the total value of all the goods and services we create. Not only does it include a bunch of things we aren’t very proud of, and that certainly don’t drive happiness, but what is more worrying is what it doesn’t count. GDP doesn’t measure any progress of things like health, learning, integrity, innovation, joy, or strength of relationships. These more intangible measures are the actual drivers of happiness, and they are also the leading indicators of productivity and economic success.  Conley points out that Robert Kennedy had it right when he said that GDP “measures everything in short, except that which makes life worthwhile”.

In this TED talk, Chip Conley gives a great introduction of his Peak model, and then makes a compelling case for the new success measurement system which has emerged – Gross National Happiness. Everyone would agree that happiness is the most important thing in life – so let’s figure out how to actually increase it.

Related posts:

1. Big Ideas Should Get to ‘The Point’ Whether you want to organize an event, petition for change, or raise money, The Point is a revolutionary way for individuals to combine their influence and make things happen they...
2. Our Not So Secret Motivations Money is the ultimate motivator, right? Nope. Dan Pink (and Science) will tell you that it's all the warm and fuzzy stuff that really DRIVES people....
3. Still Want to be an Astronaut? A Brooklyn-based man and his young son were recently successful in launching a capsule into space using a weather balloon - and they got some amazing footage. It's a great...