m377 how to cultivate purpose 1072019 - stanford university

CASE: M-377 DATE:11/24/18

SophiaPink,SaraGaviserLeslie,JakePoses,DebraSchifrin,andStanfordGSBGeneralAtlanticProfessorofMarketingJenniferAaker,andpreparedthiscaseasthebasisforclassdiscussionratherthantoillustrateeithereffectiveorineffectivehandlingofanadministrativesituation. Copyright©2018bytheBoardofTrusteesoftheLelandStanfordJuniorUniversity.PubliclyavailablecasesaredistributedthroughHarvardBusinessPublishingathbsp.harvard.eduandTheCaseCentreatthecasecentre.org;pleasecontactthemtoordercopiesandrequestpermissiontoreproducematerials.Nopartofthispublicationmaybe reproduced, stored ina retrieval system,used ina spreadsheet,or transmitted inany formorbyanymeans –– electronic, mechanical, photocopying, recording, or otherwise –– without the permission of theStanfordGraduateSchoolofBusiness.Everyefforthasbeenmadetorespectcopyrightandtocontactcopyrightholdersasappropriate.Ifyouareacopyrightholderandhaveconcerns,pleasecontacttheCaseWritingOfficeat [email protected] orwrite to CaseWritingOffice, StanfordGraduate School of Business, KnightManagementCenter,655KnightWay,StanfordUniversity,Stanford,CA94305-5015.

HOWTOCULTIVATEPURPOSE(ANDAUTONOMY,COLLABORATION,ANDEXCELLENCE)

INCOMPANIES

INTRODUCTION

Innovationanddigitaltransformation—fancywaystosay“atonofchanges”—havebecomethe new normal in business. Rigid rules can’t adapt quickly, so leaders need a flexiblemindset thatcanadjustwhenthepictureshifts. Theyneedtheemotional intelligencetoconnectmoredeeplywiththeir teams,partners,andcustomers,andthementalagility toworkwiththosegroupstosolvecomplexproblemsnimbly.(Notaskingmuch,weknow.)Howdo you achieve this? We argue that thekey is to anchor onmeaning and purpose,fueledbyhumorandlevity.Employeesandcustomersneedasenseofmeaningandpurpose—thefeelingofbeingpartofamissionthanisbiggerthanthemselves.Thereare(atleast)threebenefitstothisapproach.Anchoringonpurpose:

1. Isassociatedwithgreaterhappinessinthelongrun.12. Boostshealth.Thosewhofeelconnectedtomeaningandpurposearehealthier,tend

tolivelonger,2,3andevensleepbetteratnight.43. Increasesengagementandjobsatisfaction.5 Thosewhofeelconnectedtomeaning

andpurposeatworkaremoreengaged,workharder,andstaylonger.

HowtoCultivatePurpose(andAutonomyCollaboration,andExcellence)inCompaniesM-377

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Peoplewant to be valuedmembers of awinning team on an inspiredmission. Buthere’s thehitch:AlthoughmostCEOs thinkpurpose is important for theirorganizations,themajoritysaytheydonotknowhowtoharnessoractivateit.Activating purpose requires (of course) an acronym—PACE: Purpose, Autonomy,Collaboration,andExcellence.Thesefourprinciplesprovideguidelinestokeepemployeesandcustomershappy,satisfied,andcontributingtotheorganization.In this case study, we’ll share examples of how to activate PACE in employees andcustomers. At the end, we’ll provide five examples of companies and organizationswhosuccessfullyactivatedtheseprinciples.

WhatarePurpose,Autonomy,Collaboration,andExcellence?

Purpose:Feelingthatyouarepartofsomethingmeaningful. This isachievedwhenyoufeel you are part of something bigger than yourself, and when shared goals mattersignificantly.Autonomy:Perceivingthatyouareincontrolofyourfuturepath,abletoworkonthingsyouaregoodat,and learnnewskills. This isachievedwhenyoufeelyouhavethetrustfromyourselfandotherstomakedecisionscriticaltoyourwork.Collaboration: Cultivating meaningful relationships. This is achieved through sharedexperienceswherecollaborationisproductive,innovative,and/orfun.Excellence:Afeelingofforwardmomentumandimprovement.Thisisachievedwhenyoufeel valued and see the concrete,measurable, and positive differences that your actionshaveonothers.

HowCompaniesCanActivatePACEforEmployees

Purpose:Peoplewill oftenworkharder fora causeother thanmoney. Forexample,oneresearchstudyoffered lawyerscompensation,around$30perhour, forprovidinglegalservicestoneedy retirees. Although the lawyers rejected the offer to receive nominal payment fortheirtime,theywerewillingtoprovidetheseservicesforfree.Thisseemingirrationality—thewillingness towork for freewhile being unwilling to receive payment for the sametask—occursbecausemarketandsocialenvironmentsintersectinanunusualway.Whenmoneywasoffered,thelawyersusedmarketnormstoconcludethat$30/hourwasnotfaircompensationfortheirtime. Whenmoneywasnotmentioned,however,theyusedsocialnorms—i.e.,helpingthoselessfortunate—tomaketheirdecision.6Bygivingemployeestheopportunitytoprovidetheirservicesforfreeandtakingthemoutof amarket environment, companiesmay find that employees become less selfish,more


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collaborative, and more helpful. Google gains a tremendous amount of goodwill fromemployeesbychangingtheirrelationship fromamarketrelationshiptoonegovernedbysocialnorms. Offering free food,childcare,exerciserooms,andflextimearesomeof theways Google builds relationships with employees. When the company then asks theseemployees to attend out-of-townmeetings at a moment’s notice or work long hours tomeet a deadline, they are less likely to balk at these requests because they feel theiremployerhasuphelditsendofasocialcontract.7Companies can address employees’ frustration over a lack of fulfillment in their jobs byengagingtheminphilanthropy. Since,despite theevidence, it ishardtoconvincepeoplethatmoneydoesnotbuyhappiness,someresearcherssuggestweshouldtakethedriveformoneyasagivenandthenshifthowpeoplespendit.8Onewaytodothisisforcompaniestoofferemployeestheopportunity tocontributetosocialgoodcausesthroughcorporategivingprograms.Theyincreasetheattractivenessoftheseprogramsbyofferingmatchinggifts,oreventheabilitytohelpdeterminewherethedollarsgo.Inthisway,employerscanactuallyhave a role inmaking their employeeshappier. For instance,when researchersfollowedpeopleaftertheyreceivedbonuses,theyfoundthatemployeesgotnomeaningfulboostinhappinesswhentheyspenttheirmoneyonmaterialthings—clothes,electronics,and furniture.However,bygivingevena small amount to charity, they feltbetter.9 Onestudy found that individuals are four times more likely to be loyal to a social goodcompany,andwouldaccept14percentlowerpaytowork foracompanythatengages insocialgood.10When companies emphasize the social aspect of their relationshipwith employees, theynotonlyinstillmeaningintheiremployees’workbuttheycanalsobuildemployeeloyalty,flexibility, and awillingness topitch in.11 For instance, employees at the drug companyPfizerresearch,develop,andmarketprescriptionpharmaceuticals.Insteadoffocusingonthese routine aspects of work, Pfizer puts forth a mission of “working together for ahealthierworld.”ThismissionenablesPfizeremployeestofeeltheyareworkingtowardsahighergoal anddoing social good. While theworkmaybenodifferentunderamissionstating, “We find cures for diseases,” the idea of “working together” and doing italtruistically “forahealthierworld”allowsemployees to see themselvesasengaged inasocialrelationshipwiththeircompanyandaspartnersinreachingahighergoal.Activities that enable employees to take part in projects that create social good, such asrebuildingahome,volunteeringataschoolevent,orparticipatingindisasterreliefefforts,also give employees the opportunity to interact with colleagues in a different socialenvironment.Whileworkplacesare,ofcourse,socialenvironments,doingvolunteerworkin almost any capacity offers a new experience as well the chance to feel good aboutoneself,excited,proudandactive—allemotionsthatarestrongpredictorsofhappiness.12Somecompaniestendtosteerclearofpromotingsocialinteractionasameansofcreatingidentity and meaning because they view socializing as a distraction from work.13 Theimportanceofthissocialinteractionshouldnotbeignoredbecauseitisvitaltoemployees’happinessandengagement.Addingtwohoursofsocialtimeontheweekends,forinstance,couldincreaseaveragehappinessby2percent.14


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Gettingteamstoworktogetherbothinandoutoftheofficemayleadtomorestabilityasemployeesget toknoweachotherbetterandcreatecommongoalsoutsideof traditionalworkinteractions.Justassoldiersinarmyunitswithstablemembershipreportedgreatersocialsupport,betterphysicalandmentalhealth,andmorecareersatisfactionthanunitswithchangingmembership,companieswithstableemploymentmightexperiencethesamebenefits.15Further,thesecloserelationshipscouldalsohavetheeffectofreducingstressatwork.16Autonomy:Companies can also focus on building autonomy—allowing their employees to makechoices the employees believe will best set them, and therefore their company, up forsuccess. Asana, a Silicon Valley start-up focused on task projectmanagement software,gave each employee $10,000 to spend on office setups. The company also allowedemployeestooptfordifferentexecutiveandlifecoaches,dependingontheskillstheyweretryingtoacquire.17Googlealsodesignedforautonomybyencouragingemployeestospend20percentoftheirtimeworkingonprojects thatwere interestingandmeaningful to them—but theseweretasks that theirmanagershadnotspecificallyassigned. Employees could spend timeonprojects theypersonally feltwere important to the companyor fromwhich theyderivedpersonal satisfaction. The 20 percent program kept employees happy; it improved theiroutputintheother80percentoftheirtimeandhasledtothedevelopmentofproductsandfeatureseventuallybroughttothemarket,includingGmail,Google’se-mailproduct.Zapposarrangedasystemtogiveemployeessomecontrolovertheirsalary.Thecompanygave employees a small pay raise for each of the 20 Zappos “skill sets” they mastered.Employeescouldchoosetomasterasmanyskillsetsas theywanted,orcouldoptnot tomasterany,andremainatthesamepaylevel.Collaboration:Cultivatingmeaningfulrelationshipsamongemployeesisanimportantdriverofhappinessandbringsrewardsbacktothecompanyaswell.Ifcompaniesfostertheserelationshipsina fun way, it will maximize the impact. One example of a company that did this isBabyCenter,whichguidedmothers-to-bethroughtheirpregnanciesandcreatedanonlineandin-personcommunityforitsmillionsofcustomers.Every six weeks, BabyCenter took employees off their regular jobs for three days toparticipate in BabyCenter Innovation Days. Amid pizza parties at the beginning andcelebratory ceremoniesat theend,BabyCenteremployeesworkedacrossdepartments—teamingupwithpeopletheyhadneverworkedwithbefore—tocomeupwithideastheywere passionate about that drove the company forward. Employees felt energized andrefreshedbythesedaysanddevelopedlong-lasting,meaningfulrelationships.To foster internal collaboration, Zappos encouraged employees to socialize outside ofwork, and requiredmanagers to spend 10 to 20 percent of their time hanging outwith


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their teammembers.Zapposalsopublished itsCultureBookannually; itwasmadeupofemployees’thoughtsonwhattheZapposculturemeanttothem.Thecompanysharedthebook both internally and externally, to help employees to feel like they were having asharedexperience.Happiness could also be important for employee retention; whether employees hadmeaningfulrelationshipswiththeirmanagersorco-workerscouldplayacriticalroleinthedecisiontostayratherthanmoveontoanotherjob.Asoneadagesuggested,“Peopleleavemanagers,notcompanies.”18Excellence:Companiesthatenableemployeestohaveameasurableimpactwithintheorganizationandon customers create another form of happiness. For example, JetBlue fostered a non-hierarchicalculturetoallowasmanyemployeesaspossibletohaveanimpact. InMarch2012, a coordinator (a first-levelmanagement position) cameupwith an idea for a freepublicity stunt. This successful stunt went from conception to execution in just a fewhours,astheideadidnothavetogothroughmultiplelayersofbureaucracytogettothepeoplewhocouldmakeithappen.Implementingmechanismsthatmakeemployeesfeelvaluedisanotherdriverofhappiness.A company thatdid thatwellwasKelmarSafety,whichmanaged a “How’sMyDriving?”program.Whencustomersdialeda1-800numbertogivedriverscomplimentsandthanks,the company made sure to pass these compliments along to the drivers—unlike thepractice in many other companies, where customer input reached management, ratherthanemployees.19Googlemadeemployeesfeelvaluedthroughprogramssuchasspotandpeerbonuses.Thecompany paid particular attention to its employee survey, giving employees the feelingtheycouldmakearealdifferenceinthecompany.Googlealsoofferedenrichmentclassesinsubjectsthatcouldleadtoemployeecareeradvancement,whileitsrapidgrowthmeantemployeesexperiencedasenseofpersonalgrowthalongwiththecompany.Foremployees,happinessmightcomefromthefeelingofprogressandmomentum,bothintheircompanyandintheirowncareertrajectories.

HowCompaniesCanActivatePACEforCustomers

Purpose:Charitablegivingwasonetried-and-testedwaytopromoteconsumerhappiness,justasitwas with employee happiness. Companies could use gifts to cultivate a positive publicimageandwarmth,whichwouldthenlikelyincreasecustomerspending.20Teenagerswithfavorableimpressionsofacompany’sphilanthropywerethreetimesmoreloyalthanthosewithoutapositive impressionofabrand. Further,90percentof teenswouldswitchtoabrandaffiliatedwithagoodcauseifpriceandqualitywereequal.21Andtheimpactcould


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begreaterstill—beyondcreatingapositiveimpression,involvingemployeesincorporategiving could enable these employees to experience greater well-being and highersatisfactionthanemployeeswithnoinfluenceoverthecompany’sspending.22Insomecases,charitablegivingcanbeusedevenmoreeffectivelywhentiedtoapurchaseorotherspecificactionperformedbyacustomer. Companiescouldengagecustomersbygivingthemanoptiontomakeacontributionatthepointofsaleortellingthemaportionoftheirpurchasepricewillgotoacompany’scharitableactivities.TheGap’s“GiveandGet”program,forexample,allowedcustomerstoallocateaportionoftheir purchases to the nonprofit company of their choice and inspired them with thetagline,“Bewhat’spossible.”Pepsi’s“Refresh”projectwasanotherexampleofacorporateeffort intendedtohelppeopleandcompaniesworkingonsocialgoodprojectsboth largeand small—while positioning the Pepsi brand as a catalyst for optimism. Anyone couldsubmitasimpleapplicationforfunding,andconsumerscouldvoteonlinetosteerthePepsisupportforsocialgoodprojects.IntheseconditerationofthePepsiRefreshProject,Pepsicreatedanevencloserlinkbetweenthedonationsandpurchase,givingconsumersacodeforextra“powervotes”underthecapofeachbottleofPepsiandDietPepsi.23Similar to the Pepsi Refresh Project, American Express initiated the “Members Project,”invitingAmexcardholderstoproposeideasforaprojectthat“canmakeadifferenceintheworld.” Membersvoted todeterminewhichprojectwould receive$2.5million from thecompany. Customers and the corporation becamepartners in doing social good, amovethathelpedincreasecustomerloyaltyandimprovethecorporation’sreputation.24Innovativecorporatesocialgoodprojectscouldgenerateenormousdividendsforabrand.Theycouldenablethebrandbothtoexudewarmthandalsoincreasetheamountoftimecustomersspentwiththebrand. Themoretimeconsumersspentwithabrand,themoreengagedtheybecame,andthemoretheymightthenfeelthatthebrandrepresentedthemas individuals. Then, when brands drew consumers’ attention to their time spent on aproductandtheexperiencesgainedwithabrand,companieswereabletodrivefeelingsofconnectionbetweenconsumersandtheirbrandofchoice.25Warmthoftenwasoneemotion related tohappiness,but fostering feelingsofwarmth inyourbrandwasnotalwayspositiveforthebottomline.Forstarters,customersmightnotbepreparedtoseecorporationsascultivatorsofsocialgood.Companiesthatattemptedtocommunicate their greater purpose had to contend with the stereotypes that surroundboth nonprofit and for-profit entities; people tended to perceive nonprofits as beingwarmer than for-profits but less competent. Perceptions of competence could drive thewillingnesstobuy,whichmeansthatconsumerswereoftenmoreeagertobuyaproductfromafor-profitthananonprofit.Onestudyaskedcustomerstodescribetheirviewsonnonprofitandfor-profitcompanies.WhenconsumersreviewedInternet-basedbusinesseswithwebaddressesending indot-org, such as donorschoose.org, they perceived the company as caring and worthy, butwithout a high level of competence. However, studies of several firms showed that


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consumers perceived competence as a better predictor of global endpoints (e.g.,willingnesstobuy)thanwarmth.Admirationforafirm,however,wasadistinctdriverofbuying intent. Thus,companiesmightneedto findawaytoemphasizebothcompetenceandwarmth. Iftheycoulddothat,theymightbeabletoincreasecustomers’admiration,whichdrovebuyingintent.26Autonomy:Companies like Zappos had identified one way to drive happiness: Give consumersautonomy. Companies could create these feelingsof autonomybygivingpeople tools topersonalizetheirexperiences. Nike, forexample,decidedtooffercustomizablesneakers.Similarly,healthcarecompaniesincorporatedtoolstoenableuserstoaccesstheircharts,schedule appointments, or speak with physicians, making a previously inaccessibleindustrymoretransparent,whilegivingpatientsmorecontrolovertheirowncare. Allofthesemethodsincreasedtheamountoftimethatcustomersspentwithabrand—andthis,inturn,helpeddrivecustomerengagement.In a phenomenon dubbed the “IKEA Effect,” research demonstrated that self-madeproducts (i.e., items consumers built from kits they purchased from IKEA) increasedperceptionsofvalue.Consumerswerehappierwiththeirself-madeproductsthansimilaronesbuiltbyexperts. However,thisaddedlaboronlyledtoincreasedhappinesswhenitresulted in the successful completion of tasks. The “IKEA Effect” disappeared forconsumerswhodid not complete their projects.27 The implications of the “IKEAEffect”shouldserveasawarningforcompaniestryingtocreateautonomyfortheirconsumers—oneapproachwouldbetogiveconsumerssomerope,buttrytoavoidhavingthemtripandfall.Collaboration:BabyCenterwasaplace that cultivated relationshipbuildingbetweencustomersand thecompanyaswell asbetweencustomers themselves. The companyhada robustwebsitethatofferedadviceandfosteredatwo-waydialoguewithcustomers.BabyCenteralsohadBabyCenterBirthClubs,whichconnectedwomenatthesamestageofpregnancytogetherandfacilitatedmeetingsbetweenthem.Long-standingfriendshipscameoutoftheseclubs.Zappos used the telephone as a relationship-building tool. The company did notcompensate telephone customer service operators based on the number of calls theyhandled;theirinstructionsweretospendasmuchtimewithcustomersasittooktoresolvetheir issues. Zappos said these conversations allowed employees to develop a personalemotional connection with the customer, which helped build the brand. Zappos alsocapitalizedonthelatestsocialmediatrends,includingTwitter.CEOTonyHsieh’s@Zapposaccounthadover1.65millionfollowers.Thecompanyreceivednumerouse-mailsinwhichcustomerssaidtheydecidedtobuyfromZapposthatdaybecausetheywerefollowingthecompanyonTwitter.Theymadecommentssuchas,“IfeellikeIknowyou.”28BeautyTalk,cosmeticsvendorSephora’sinteractivewebsite,enabledcurrentandpotentialcustomers to communicatewithandaskadvice fromotherusersandbeautyexperts.Ascustomersbuiltrelationshipswitheachother,theyfoundthewebsitetobeasafeandfun


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place to ask each other personal beauty questions they probably did not want to askelsewhere. There were certain customers giving advice who earned the title “BeautyMavens”becausetheyhadbecometrustedsourcesof informationandguidance forotherusers.Excellence:Companies needed to identify customers’ emotional goals and create the sense thatspendingtimewiththebrandwillhelpthemachievethosegoals.Asmentioned earlier, when customers participated in a company’s social good projects,they would feel the impact of their actions and connect that positively to the brand.Anotherwaytodesignforimpactwasmakingcustomersfeelvaluedbyprovidingcustomerperksandavoice—forexample,throughaninteractivewebsiteorblog.Ideally,companieslookedtodevelopalow-cost,high-touchstrategytomaximizethisgoal.Companiescouldalsopromotehappinessbymakingcustomers feel theywerepartof itsforwardmomentum—partofawaveofexcitement,progress,anddrivetowardexcellence.Beingassociatedwithsuchabrandcouldmakecustomersfeeltheywerepartofaspecialclubofpeople“intheknow.”Thiscouldbeespeciallytruefornichebrandsandproducts,butappliedtoallbrands.Forexample,Applehascapitalizedoncustomers’desiretobeattheforefrontoftechnologyandinnovation,andcustomerswerewillingtopaymoretobeapartofthatmovement.Similarly,WholeFoodsshopperswerewillingtopaymoreforfoodfrom a company they believed to be at the forefront of a new foodmovement featuringorganicproduceandpromotinglocalfarms.Lastly,companiescouldincreasecustomers’feelingofimpactbylisteningtoandactingoncustomers’ complaints, compliments, or other issues. For example, a JetBlue customershowedupatcheck-inwithaboxthatcontainedafoldingbike.Eventhoughtheboxfittheweightand size requirements for check-in luggage, JetBlue chargedhima$100bike fee.The customer tweeted his dissatisfaction, and that night JetBlue changed its policy onfoldingbikesandtoldthecustomeritwasrefundinghisfee.JetBlue also enabled customers to have impact through its volunteer panel of 10,000 to12,000 frequent fliers. The company turned to the panel for feedback on its ideas andprograms.WhenJetBluewasintheprocessofnamingitsnewpremierprogram,theairlinepresenteditsideatothepanelistsandtheyhatedit.Becauseofthisfeedback,JetBluewentwithadifferentname.


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FIVECASELETS:PACEINCOMPANIESANDORGANIZATIONS

HerearefiveexamplesofcompaniesandorganizationswhosuccessfullyusedelementsofthePACEapproach.

1.PACEintheU.S.Military

Organizations lookedtocreatepurposebyconnectingpeoplewithsomething largerthanthemselves. For the U.S. military, this was the key factor that the 1.4 million-personorganization used to drive happiness. Many of themilitary’s traditions and institutionsalignedwiththeobjectivetoconnectmenandwomentoahighergoal.

Purpose:TheU.S.militarywasbuiltontheideaofpurpose,asitwaspredominantlymission-driven.Since the U.S. military transitioned to an all-volunteer army in 1973, individuals whoascribedpersonalvalue to themissionof serving their countryhadpopulated the ranks.Themilitary capitalizedon this emotionbyhighlighting thevalueof themission—itwasthisresponsibilityof“servicetothecountry”thatmightpromptanarmyrangertosays/hewasreadyandwillingtoreturntoAfghanistaneventhoughs/hehadtwoyoungchildrenathome.Themilitarywasfulloftraditionsthatinstilledasenseinservicemenandwomenthattheywerefollowinginthefootstepsofothers. ThegroundsofU.S.militarybasesweredottedwithstatues;dormswerenamedafteraccomplishedgenerals;andeachunithadauniquesongand flag. These symbols connected soldiers tosomething larger than themselves—theywerepartofmorethan200yearsoftradition.

Autonomy:Servicememberswere trained to followorders in themilitary, so autonomywas not anattribute usually associated with the military. However, the military designed forautonomyinthesenseoftrainingmemberstobeabletothinkontheirfeet,takeinitiative,andactindependentlywhennecessaryindangeroussituations.

Collaboration:TheU.S.militarycultivatedmeaningfulrelationshipsbyembracingthe ideaofseparationforcohesion.Themilitarywenttogreatlengthstoseparateitselffromtherestofsociety.ItestablishedseparateinstitutionsdedicatedtotrainingandhighereducationatplaceslikeWest Point and the U.S. Naval Academy. Military personnelwore uniforms that clearlydisplayedtheirranks,achievements,andactsofheroism.Throughthesemechanisms,themilitary could delineatewhowas in the organization andwhowas not. This created asenseofcohesionandcollaborationforthoseontheinside.TheU.S.militaryjudgeditsleadersontheirabilitytofostercohesionwithintheirunits,andthatwasasubstantialcomponentoftheirperformancereviews.Theextenttowhichtroops


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derivedtheirhappinessandself-worthfrombeingpartofacohesiveunitwasimportantindriving necessary outcomes for themilitary. Inmoments of grave danger, for example,membersofthemilitarywereconditionedtorunintothelineoffirebecausetheyfeltanobligationnottolettheirunitsdown.

Excellence:Themilitaryencouraged itspersonnel tousetheirskills towardthegoalofexcellencebyconstantlyreinforcedmessagingthatitsmemberswerethebest,mostcapableforcesintheworld.Themilitaryinternallypromotedtheidealsthatithadbest-in-classtechnology,thebest training,andthehighest levelofpreparedness. Inanenvironmentwhere itspeoplewerewalkingintounknownsituationsandfacingsignificantdanger,theU.S.militaryusedits technology,know-how, training,experience,andresourcestogive itsmembersonthefront line the confidence that they were ready for the tasks at hand. Servicemen andwomenfeltasenseofproductivityandbelievedthat theirskillswerebeingusedtowardthe goal of excellence. The military also promoted the concept of excellence by givingpromotions and publicly awarding medals and other meaningful honors foraccomplishmentsandactsofbravery.

MeasuringPACE:For the military, the ultimate measure of success was whether soldiers left for civilianemployment—or stayed on to become career military personnel. Because the cost torecruitandtraineverysoldierwassohigh,attritionhadsignificantcosts.Retentionrates,particularly for highly performing military personnel, were a key evaluation metric forofficersandprovidedthemwithaclearandconstantmeasureofperformance.

TheDownsidesofPACE:One downside of collaboration was that military personnel became accustomed to, andalmostdependenton,thehappinessfosteredbycohesionwhiletheywereinuniform.Thiscould leave members of the military with an emotional vacuum when they departed.Happiness that came fromcamaraderieunder conflictwasverydifficult to replicate inanon-conflict environment.Everydayactivitiescould seemmundane relative to lifeon thebattlefield,andtheseintenseemotionsandhighlystimulatingexperiencesweredifficulttoreplace.Another downside of collaboration was that the pride military members had in theirinstitutions and organizations could make service members blind to mistakes. Thecombination of a “do not embarrass the organization” attitude, camaraderie, and careerincentivescouldresultincover-upsofmistakes.Thewell-publicizedstoryofthedeathofPatTillman, a formerNationalFootballLeague starwhobecameanU.S.ArmyRanger, isoneexampleofasignificantcover-up.Tillman,itwaslaterrevealed,waskilledbyfriendlyfire in Afghanistan, though for several years the military maintained he was killed byenemyfire.


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2.PACEatThumbtack’sTeamPhilippinesWatch to learn about Thumbtack:http://vimeo.com/thumbtack/review/41594488/5c6e344cadWatchtolearnaboutTeamPhilippines:http://www.youtube.com/watch?v=BKYfy3_7cuwSanFrancisco-basedstart-upThumbtackwasamarketplaceforlocalservicesintheUnitedStates. Consumers told Thumbtack what they needed done, and Thumbtack solicitedcompetitive quotes from its network of professionals. In 2012, itworkedwith 260,000localbusinessesand independentprofessionals incategories fromhomeimprovementtoeventstohealth&beauty.WhenThumbtack needed to fill positions that requiredEnglish language proficiency butlittle content-specific knowledge, it turned to a labor outsourcing start-up called oDesk.Thumbtack’s founders contracted with a Filipina businesswoman, Mikan, who beganfindingpeopleacrossthePacifictodooddjobsforthebuddingstart-up.Twoyearslater,Thumbtack employed 175 people in the Philippines—10 times the number of full-timeemployees at its headquarters—all working from their homes scattered throughout thePhilippines.Thumbtack’sTeamPhilippines,asthecompanycalleditsoverseasoperation,hadcollectivelyproofreadandeditedseveralhundredthousandpiecesofcontent,handledtensof thousandsof customer supporte-mails, andperformedcountlessother recurringandone-offtasksovertheInternetorviaSkype.

Purpose:Thumbtack fostered a culture in which contractors felt they were part of somethingmeaningfulbycreatinga family-likeenvironment.Thecompanyattributedthesuccessofitsoffshoreoperation to this culture. The conceptof a familybusinesswas core tohowThumbtackbuiltandmanageditslargeoffshoreoperation,eventhoughithadnophysicalofficeandmanymembersofitsteamhadnevermetface-to-face. Theculturewasoneofthe main reasons team members made significant sacrifices to work for Thumbtack.Thumbtackpaid its teammembersanaverageof$2.25perhour—half asmuchas somecouldearnincomparablejobs.ManyteammembersworkedatnightinthePhilippinestocoincidewithU.S.businesshoursandworked100-plushourweekstopitchinduringpeak-demandperiods.

Autonomy:OnewayThumbtackmadecontractorsfeelincontroloftheirdestinywasbyallowingthemtowork fromhome. Setting themupathomeoffices representedbotha significant costsaving forThumbtackandaperk for teammembers. Inacountrywhereopen-airbuseswerethenorm,andpeoplehadtocontendwithfrequentflooding,commutingtoworkwasamajorhassle.OneteammembergaveupacallcenterjobtojoinThumbtack;theratewashalfofwhatshewasmaking,butshenolongerhadtocommute.Workingfromhomealsogaveteammembersthe flexibility to takecareof theirchildrenwhileearningan income.


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Thenatureoftheworkallowedteammemberstofittheirworkintotheirfamilyschedulesandothercommitments.Localmanagementwasanotherdriverofautonomy.AlthoughoveralldirectioncamefromThumbtack cofounders Jonathan Swanson and Sander Daniels in San Francisco, Filipinostaffmanagedtheteamonaday-to-daybasis.Collaboration:Thumbtack had severalmechanisms it used to cultivatemeaningful relationshipswithintheteam,includingteame-maillists,meet-ups,andreferralbonusestoconnectemployeestoeachother.Teame-mail listsworked inthe followingway:Eachof the foursub-teamshadane-maillist used not only for work-related messages but also to share personal news. Teammembers frequently sent around photos of children or requests for vacation ideas.Managers sent group e-mails wishing teammembers “Happy Birthday” and celebratingeach employee’s anniversary of joining Thumbtack. E-mails were not formal andcorporate, butwere filledwith emoticons, colorful text, and distinct signatures. E-mailsbecameawayforteammemberstoexpresstheirpersonalitiesandgettoknoweachother.Meet-uppartieswereorganizedbyemployees inregionsof thecountrywherenumerousteammembers lived so they could get acquaintedwith one another. Occasionally, thesewere organized and paid for by Thumbtack, but mainly they occurred because teammembersinitiatedthem.Onmeet-updays,dailytasksaccumulatedandconsumersintheUnitedStatesmightbe leftwaiting. Thumbtack’smanagementbelieved thiswasa smallpricetopaytobuildacohesivePhilippinesoperation.Thumbtack also instituted referral bonuses to create a more integrated team. Thecompany paid its team members $20 for each new member they recruited to TeamPhilippines.Many teammembers recruited their friends and even their spouses—therewere two married couples on the team—helping new employees feel immediatelyconnectedtothebroaderfamily,andincreasetheirsenseofbelonging. Thebonusesalsomade recruiting the responsibility of the whole organization, and made everyone feel agreatersenseofownership.

Excellence:Thumbtack propelled employees toward excellence by offering training, providingperformancereviews,andlisteningtofeedback.Thumbtack created comprehensive onboarding and training documents and videos toallownewteammemberstogetuptospeedandeasilyfindassistance.Withoutcoworkersin shouting distance, it was important that Thumbtack put all the information at itscontractors’fingertips,bothtoproducehigher-qualityworkandtoavoidfrustration.Thedeputydirectors in thePhilippinesestablisheda formalprocess forregular feedbackwitheachemployee. Thumbtackwasable to trackspeedandqualityofcompletedtasks.Managementnotifiedteammembersoftheirrelativeranking,focusingeachstaffreviewon


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areasthatneededimprovement.Forexample,onememberoftheOutboundCallingTeamwastoldinherreviewthatsheneededtobe“lessformalandmoreconversational”inhercalls.Shefoundthisquiteusefulandthankedhermanagerforthefeedback.Intermsoflisteningtofeedback,theSanFranciscoteamusedwebportalsandothertoolstoconstantlysolicitfeedbackfromthePhilippinesabouthowtomaketheTeamPhilippinesjobseasier.Thumbtackdesignedforemployeeprogressbyofferingadvancementopportunities.Fromits firstemployeeonward,Thumbtackhadahistoryofpromotingmanagers fromwithin,giving employees a sense that they were moving ahead along with the success of thecompany.

MeasuringPACE:Managers in the Philippines and San Francisco kept a close eye on hard and softbarometersofhappiness.TheU.S.teamtrackedattritionofTeamPhilippinesemployees—generally not more than a few team members a month—from each of the four teams.Deputy directors routinely solicited feedback about what Thumbtack could do to maketheir experience better. They also gave end-of-year surveys to let each team memberevaluatetheperformanceofhisorherteamleader.

TheDownsidesofPACE:OnedownsideofautonomyforThumbtackwasthecostofemployeeflexibility.Oneofthebenefits of working for Thumbtack was the ability towork from home at convenient—though sometimes inconsistent—hours. However, this could result in inconsistentresponse times for customers. Thumbtack also ran the risk of Internet outages, whichcouldtakeasignificantportionofitslaborforceoffline.3.PACEatIndiegogoIndiegogo, a San Francisco-based crowd-funding website, connected fundraisers andfundersfromaroundtheworld. By2011,thecompanyhadhostedover100,000fundingcampaigns. Indiegogo took the concept of happiness seriously; three of its 29 full-timeemployeesfocusedoncustomerhappiness,andthecompanyhadanEmployeeHappinessInitiativethatincludedemployeesfromacrossthecompany. IndiegogofounderandCOODanae Ringelmann defined happiness for employees as fulfillment of expectations,optimizationofpersonalskills,andsuccess.

Purpose:Indiegogolearnedearlyonthatitsemployeeswereself-selectingintheirdesiretobepartofsomethingmeaningful.OneofthetopreasonspeoplecametoIndiegogoandstayedwiththe company was its mission to democratize fundraising and create an equal playingfield— empowering people all over the world to raise money for ideas they werepassionateabout.Indiegogo’scorevalueswerecollaboration,authenticity,empowerment,


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andfearlessness.Ringelmannsaiditsmissionandcorevaluesunifiedandstrengthenedthecompany.Employeepassionforthecompany’smissioninfluencedIndiegogo’shiringpractices,anditbeganscreeningforpeoplewhoweremissiondriven.Eachcandidatehadfourinterviews:twoskillsinterviewsandtwocultureinterviews.

Autonomy:Indiegogo gave its employees a sense of autonomy by encouraging them to work onprojectsthatexcitedthemandoptimizedtheirskills,evenifitmeantchangingtheirareasof responsibility. Performance reviews, in addition to addressing short-term goals,exploredwhereeachemployeewantedtogointhesubsequentthreemonthsanddesignedaroadmaptoachievethosegoals.Followingthatphilosophy,Indiegogoallowedemployeestofigureoutwhichinitiativestheywantedtopursue,andemployeescouldstaywiththoseinitiativesforaslongastheywantedtoorfelttheycouldaddvalue.Inaphoneinterview,Ringelmannelaborated:

Allowingpeopletosaywhichinitiativetheywantedtobeinvolvedinwasagoodmovebecausetheinitiativesgotpeoplewhohadopinionsaboutthingsor had experience with certain elements to be able to offer that kind ofperspectiveandnotgetstuckinthatoneroletheywerehiredfor.

The idea was to institutionalize this process, and Indiegogo was working on finding abalance between allowing employees to follow their passions and making sure thecompanycompletedneededtasks.

Collaboration:Tofostercollaboration,Indiegogobelievedthatitneededtomeasureemployeehappiness.The company conducted employee happiness surveys every two months, in whichemployees ranked how they felt about statements on a scale ranging from “stronglydisagree” to “strongly agree.” The questions remained constant, allowing Indiegogo tocapture trends over time. The results of these surveys significantly influenced howIndiegogo designed its operations. A big shift came after the survey found companycommunications consistently scored the lowest. Employees reported that departmentsweresiloed,witheachgroupoperatingindependentlyinsteadoftogether.Inresponse,thecompanyrevampeditswayofworkingbybuildingcross-functionalteams,whichallowedthewholecompanytogiveinputoneachinitiative.Thisrestructuringchangedthewholeworkplace dynamic. For example, employees got upmore often from their desks to goacross the room and speak to people in other departments,making employees feel theywereallpartofthesameteam.Inaspecial initiative inMay2012, Indiegogoconducted fourvaluesworkshopstorevisitwhat itsvaluesmeant. Foronehoureachweekfor fourweeks, thecompanyhadan“AllSmiles” meeting. Anyone who wanted to attend could do so. During these sessions,everyone drew pictures of what it meant to be empowered, fearless, collaborative, andauthentic,andthensharedthosepictureswiththerestoftheteam.


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Excellence:Tohelpemployeesachieveexcellence,everyweekIndiegogoshared itsKeyPerformanceIndicators (KPIs)with all its employees. The company showedhow theworkdone thatweek, both individually and collectively, affected the KPIs, and it compared them to thecompany’sfuturegoals.Awhiteboardevenshowedupdatedstatisticseveryday.In addition, every day at morning meetings Indiegogo highlighted individual members’achievementsthatweek.Employeesalsohadthechancetoshowtheirauthenticselvesbytalkingaboutcampaignstheywerepersonallypassionateabout—forexample,education,Africa initiatives, or jazzmusic. This processmade all employees, especially thosewhowere not customer facing, feel more connected to the impact the whole company washavingoncustomers. Inaddition, thecustomerhappinessgroupsharedfunquotes fromcustomers,bothatmeetingsandonawhiteboard,connectingemployeestocustomers inanotherwaythatdemonstratedemployees’ impact. Allof thismadeemployees feel theywerevaluedmembersofthecompany.Thesemechanismsgaveemployeesasenseofprogressandproductivity,butasIndiegogowas a start-up, Ringelmann said employees had to realize that progress was defineddifferentlythanatalargercompany:

Astart-upistherightplaceforapersonthatiswillingandwantstoworkona lotofdifferent thingsand just get theirhandsdirty. It isprobablynotagreat place for someonewho says, “I want to be in X position three yearsfromnow.ThereforeIneedtogetthesethreepromotionsbythen,andherearethethingsIneedtodotogetthosepromotions.”Soprogressatastart-upisnotnecessarilytrackableorevenmappable.

MeasuringPACE:Inadditiontotheemployeehappinesssurveyconductedeverytwomonths,everyweekthecompanycollectedanswersto the followingquestions fromtheoperationsandcustomerhappinessteams:• Whatisgoingwellinyourrole?Anymajorsuccesses?• Whatarethechallengesyouarefacing?Whereareyoustuck?• Anysuggestionstoimproveyourrole,team,ortheorganization?

For the teams not related to operations and customer happiness, the company left it tothemtodecidehowtomeasurehappinessintheirdivisions(anotherinstanceofdesigningfor autonomy). In addition, therewere quarterly “AllHands”meetings,where Indiegogooftendidmultipleretrospectiveactivities.

TheDownsideofPACE:Indiegogo did see downsides to the focus on happiness. Ringelmann acknowledged thathappinesswasaloadedword,whichcouldsetthecompanyupfordisappointmentamongemployeesiftheydidnotfeeltheirindividualhappinessgoalsweremet.Also,attimesthe


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happiness initiative and the tactics used to achieve its goals could feel too scientific,structured,andacademic,andcouldlosesightofthemoreintangibleaspectsofhappiness.Anotherdownsidewas the impactof changingprioritieswithin theEmployeeHappinessInitiative.Ringelmannexplained:

InotherinitiativeswhenyouplantodoX,Y,andZandsuddenlyZbecomesmoreimportantandyoudothatfirst,noonetakesthatpersonally.Butwhenwe apply the same kind of thinking to the Employee Happiness Initiative,peopledotakeitmorepersonally. Forexample.ifthecompanysays,“Let’sdo thehiringprocessbefore theperformance process,” somepeoplemightsay,“Ismyperformancereviewnotasimportant?”


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4.PACEatSalesforce.comDespiteitsrapidgrowth,Salesforce.comwantedtokeeptheorganizationsmallandnimble.For the San Francisco-based enterprise cloud computing company, the benefits of asmaller,more engaged team outweighed the advantages of staffing up. As a result, thecompany remained focused on keeping its employees passionate and engaged.Salesforce.comwas in the business of success, and all four drivers of happiness (PACE)were consistent with its mission to propel itself from a small company that did thingsdifferentlyintoacompetitortosoftwaregiants.

Purpose:Salesforce.com created a sense of purpose by having every employee fill out a five-pagedocument each year that helped them focus their goals and align those goals with thecompany’s overall mission. When he founded the company, Marc Benioff devised adocument, which was called V2MOM—“vision, values, methods, obstacles, andmeasurement.”29 Teammemberssaid theprocessof aligning themselvesand theirgoalswith the overall mission helped make everyone feel they were part of achieving thatmission,whichwas:“Wearesuccessfulifourcustomersaresuccessful.”ThisclearmissionwasfrequentlyrepeatedinthehallsofSalesforce.com.To build competence within its organization, Salesforce.com used its impressive trackrecord to bolster the confidence of its employees. In an environmentwith a significantamountofautonomy,Salesforce.combelieveditwasimportanttomakeitsemployeesfeelthatthey,andthebroaderorganization,wouldsucceedbyadoptingthecompany’scultureandphilosophy.Salesforce.comworkedtomaintainitsconsistentrankingsamongFortunemagazine’s“100BestCompaniesToWorkFor”anditsstrongrevenuegrowthratessinceitsfounding.

Autonomy:Giving employees autonomy was ingrained in the culture of Saleforce.com, wheremanagementencouragedemployeestomovearoundthecompanytofindworktheywerepassionate about. In many large companies, managers were incentivized to keep theiremployeesintheircurrentjobs.AtSalesforce.com,however,ifanothermanagerwantedtohire an employee and that employee wanted to transfer, no one could block the move,creating an openmarket policy. The company even set up internal job fairs topromoteinternaltransfers.Itwasnotuncommonforpeopletoswitchjobsmorethanonceayear,includingonemanagerwhohad15differentjobsin10years.Thisgaveemployeesasenseofchoiceandpromotedincreasedcommitmenttotheirprojectsandthecompany.

Collaboration:OneofthewaysSalesforce.comcultivatedcollaborationwastoconnectemployeestooneanother virtually. Salesforce.com developed its own internal social network to helpemployees connect virtually. Chatter, which eventually became an externally marketedproduct, allowedemployees toquickly findanswers to theirquestionsandgenerally feelmore connected to each other. This type of social media vehicle enabled peoples’


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personalities toplayoutonapublic stage. Itwasalso scalable inaway that e-mail andphysicalinteractionscouldnotbe.Salesforce.computconsiderablethoughtintosettingupitsoff-sitemeetingstoencouragesocial connections. For instance, the physical layout was designed to increaseinteractions—employeesswitchedtableseverydayandwereassignedexercisestocreateteambondingandnetworking.Thecompanykepttheagendalight,leavingplentyoftimeforsocializing.

Excellence:Salesforce.comdesigned forexcellencebyallowingemployees’ voices tobeheardby topmanagement.Forexample,whenSalesforce.comhelditstwice-yearlyWorldwideManagerMeetingwiththetop300executives,thewholecompanyheardthebroadcastoftheentiremeeting. Not only did employees get to be observers, they could also comment onexecutives’ presentations in real time. The top 300 executives took notice; themeetingroomsfeaturedlargemonitorsthatshowedafeedofemployeefeedbackasitcameonline.

MeasuringPACE:The ultimate measure of happiness at Salesforce.com was employee turnover. Thecompany believed employees “votewith their feet.” From the top down, eachmanagerknewhows/hewasdoingintermsofemployeeretention.Managerswhohadhigherthanaveragestaffturnoverwerecoachedonwaystoimprovethismeasure.Salesforce.comalsomonitored externalmetrics, includingGlassdoor.com, a publicwebsitewhere employeessharedspecificsabouttheirjobsandcompanies.TheDownsidesofHappiness:ThereweretwomaindownsidestohappinessforSalesforce.com:thecultureofautonomyandthedo-it-yourselfmodelwerenotforeveryone.For employees accustomed to more rigid guidelines, the culture of independence atSalesforce.com could be a tough transition, and they often struggled to adapt. Someemployeespreferredbeingtoldtodo“A, thenB, thenC,”butmanagersatSalesforce.comrarelygavethatkindofdirection.Tomaintain its tight-knit, transparent culture, Salesforce.com tried to stay as small andlean as possible, using a do-it-yourself model. Employees had to manage their own ITneedsandprovidetheirownadministrativesupport.Attimes,thiscouldbefrustratingtothe already stretched and challenged employees, and the policy risked appearing as aninefficientresponsefrommanagement.


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5.PACEatFerrariFerrari,aneliteItalianautomobilecompany,sold7,200sportscarsin2011,eachwithanaveragepricetagof€200,000.Thatyearthecompanyhadrecordsales,withrevenuesof€2.2billion,up17percentfrom2010,andprofitsof€310million,up9.5percent. Brandlicensing accounted for€40million euros,with products that ranged from sporty Pumaclothing and shoes for racing fans, to luxury products such as Vertu mobile phones, toelectronicgamesforvariousdeviceswithSony,Microsoft,andElectronicArts.Ferrarihadfourmaingoals:hirethebestpeople;makethebestproducts;extendthecompany’sglobalreach;andbevictoriousinFormulaOne—themostprestigiousracingseries,whereFerraricouldboastunprecedentedsuccesssincetheFormulaseriesstartedin1950.Thecompanydidnotmarketitsproduct;themarketingcamefromitsFormulaOnevictories.Ferrari owners enjoyed a close relationshipwith the company through awide range ofexclusive services and activities they could take part in, from driving courses to rallies.Ferrariorganized special events, suchasa three-daydriving tour through Italy. OwnerscouldflyorshiptheircarsbyboattoItaly—fromasfarawayasJapan—tobepartofthiseliteevent.Purpose:FerrariemployeeshadasenseofpurposebecausetheywerepartofthatspecialandeliteFormulaOneteam.Ferrari’sviewwasthatitdidnotsimplysellcars—itsolddreams.AsaconsistentwinnerinFormulaOne,thecompanymadesureitsemployeesknewtheywerepart of a winning team. The company employed the best people, so the winning teamfeelingwentbeyondtheracetracktothecompanyitself. AfterworkemployeescouldgohomeintheirredFerrariworkoveralls,whichwasastatussymbolforsome.Autonomy:Ferrarigaveemployeesafeelingofautonomybyhelpingthemplantheircareersfromthemomenttheywerehireduntiltheirlastdayonthejob.Oneofthefirstthingsnewhiresdidwas sit down with a manager to figure out where they wanted to go. They wereencouragedtodowhattheyweregoodatandtofigureoutinwhichareastheywantedtogrow.Youngeremployeeswereassignedamentortoguidetheminmakingthebestcareerdecisions.Olderworkerswerenotputouttopasturebutbecamementors.Collaboration:Ferrariworkedhardtobuildacompanythatwasemployeedriven,ratherthantheotherwayaround.Salarieswereslightlyhigherthanatsimilarcompanies,butaboveallFerrariprovidedimportantbenefits.Forexample,thecompanyhelpeditsemployeesgetthebestinterestratepossibleonafirstmortgagebydirectlynegotiatingwithbanks.Thecompanyalsoprovided inexpensive flights foremployeeswith familyoutsidetheareatogethomeonweekends,andofferedfreesummercampandschoolbooksforchildrenofemployees.Employees had an 8 a.m. to 5p.m. work day with a one-hour lunch in the factoryrestaurant, and the company had a sustainable environment with trees and vegetationinsideandoutsidethebuildingtocreateapleasantatmosphere.Therewasalsoadoctor’sofficeattheheadquarterswithfreemedicalfacilitiesforemployeesandtheirfamilies.


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Excellence:Ferraridesignedmultipleways todriveemployees towardexcellence, includingayearlycompetitionamongits1,500blue-collarworkers(mostlyskilledworkersinvolvedinalltheproduction processes) to come up with the best idea to improve the process or theproduct.30TheprizewasaweekendfortwoawayinanothercitylikeVienna,orasimilartypeofprize.FerrariDirectorofCommunicationsStefanoLaisaidtheemployeesdidnotenter the contest simply because of the prize, but because it gave them a sense ofownershipandpridetohelpthecompanytosucceed. Througharobustsafetyreportingsystem, employees also played an important role in keeping the accident rate low. Inaddition,thefirstpublicdemonstrationofanewFerrarimodelwasinsidethecompanyforemployees—toshowthemthefruitsoftheirlaborbeforeeveryoneelseintheworldgottoseethelatestcarmodel.TheDownsidesofPACE:Apotential downsideof a senseof purpose and strive for excellence at Ferrariwas thatemployeescouldputsomuchenergyandemotion intotheir jobbecausethey feltpartofsomething special that it could lead to frustration if they did not become high-levelmanagers.Whileemployeesreceivedtheirearnedpromotionsandpayraises,noteveryonecouldbecometheCEO.Oneotherpointrelatedtoyoungeremployees:IfFerrariwastheirfirstemployer,theymightnotappreciatethebenefitstheyhadandmightthinkitwasthesameeverywhere.

MAKINGITHAPPEN:APACECHECKLISTSohowshouldcompaniesdesignforPACE?Tostart,hereisachecklistofthingstokeepinmind.ActivatingPACEinEmployeesPurpose:

• Doemployeesunderstandthemissionofthecompany?• Isourmissionattachedtoahigherpurposeorgoal?• Iseachemployee’srolesufficientlytiedtothatmissionandhigherpurpose?

Autonomy

• Doemployeesfeeltheyareincontroloftheircareerpath?• Doemployeesfeeltheyhavetrustinthemselvesandfrominfluentialotherstomake

criticalworkdecisions?Collaboration

• Doeseachemployeehaveatleastseveralsocialconnectionsatwork?• Does the company foster social connections—especially those of work-related

teams—atandaroundwork?


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Excellence• Doemployeesfeelvaluedbythecompanyandcustomers?• Doemployeesseeameasurableimpactoftheirworkonothers?• Doemployeesfeelenergized?• Do employees feel they are moving toward excellence—personal and company-

wide?• Iseachemployeechallenged—butnotoverwhelmed—inhisorherrole?

ActivatingPACEinCustomersPurpose

• Isourbrandaffiliatedwithahigherpurpose(overandaboveprofit)?• Arecustomersabletobeapartofthishigherpurpose?

Autonomy

• Do our products and services give the consumer sufficient autonomy to makedecisions?

• Aretoolsinplacetoallowconsumerstocustomizetheirexperiences?Collaboration

• Do you have an effectiveway to communicatewith customers and allow them tocommunicatewithothercustomers?

• Isthereanavenuefortwo-waydialoguewithcustomers?Excellence

• Doconsumerswanttospendtimewithourbrand?• Dowedemonstratewehavecompetentproductsandservices?• Do customers feel the company ismoving forward and that they are part of this

momentum?• Do customers feel the company is continually improving toward its goal of

excellence?• Doourproductsandservicesbuilduptheconsumers’ownconfidence?• Docustomersfeelvalued?

1R.W.RobakandP.W.Griffin,“Purposeinlife:Whatisitsrelationshiptohappiness,depression,andgrieving?”NorthAmericanJournalofPsychology,2(1),2000,p.113.2A.Steptoe,A.Deaton,A.andA.A.Stone,“Subjectivewellbeing,health,andageing,”TheLancet,385(9968),2015,pp.640-648.3PatriciaA.Boyle,etal.,“EffectofapurposeinlifeonriskofincidentAlzheimerdiseaseandmildcognitiveimpairmentincommunity-dwellingolderpersons,”ArchivesofGeneralPsychiatry,67.3(2010),pp.304-310.4A.D.Turner,C.E.Smith,andJ.C.Ong,“Ispurposeinlifeassociatedwithlesssleepdisturbanceinolderadults?”SleepScienceandPractice,1(1),2017,p.14.


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5D.B.Rosso,K.H.Dekas,andA.Wrzesniewski,“Onthemeaningofwork:Atheoreticalintegrationandreview,”ResearchinOrganizationalBehavior,30,2010,pp.91-127.6DanAriely,PredictablyIrrational(NewYork:HarperCollins,2009).7Ibid.8MichaelNorton,LalinAnik,ElizabethDunandLaraAknin,“TheBenefitsofProsocialSpending:IndividualsandOrganizations,”presentationgivenatStanfordUniversityGraduateSchoolofBusiness,February12,2010.9ElizabethDunnandMichaelNorton,“HelpEmployeesGiveAwaySomeofThatBonus,”HarvardBusinessReview,July-August2008,p.27.10JoanneWojcik,“VolunteerWorkBenefitsEmployers,EmployeesasWellastheCommunity,”BusinessInsurance,Vol.42Issue25,June23,2008,pp.14-16.11Ibid.12MihalyCsikszentmihalyiandJeremyHunter,“HappinessinEverydayLife:TheUsesofExperienceSampling,”JournalofHappinessStudies,2003,pp.185-199.13SusanCartwright,NicolaHolmes,“Themeaningofwork:Thechallengeofregainingemployeeengagementandreducingcynicism,”ManchesterBusinessSchool,TheUniversityofManchester,2006,www.choixdecarriere.com/pdf/6573/Cartwright_Holmes(2006).pdf(December1,2018).14“WeekendsandSubjectiveWell-Being”NationalBureauofEconomicResearch,WorkingPaperNo.17180.https://www.bakadesuyo.com/2011/07/whats-the-secret-to-making-your-weekends-more/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A%20bakadesuyo%20%28Barking%20up%20the%20wrong%20tree%29%20(December1,2018).15FrederickJ.ManningandTerrenceD.Fullerton,“HealthandWell-BeinginHighlyCohesiveUnitsoftheU.S.Army,”JournalofAppliedSocialPsychology,May1988,Volume18,Issue6,pp.503-519.16A.AbbeyandF.M.Andrews,“ModelingthePsychologicalDeterminantsofLifeQuality,”SocialIndicatorsResearch,16,1985,pp.1-35;andD.PerlmanandK.S.Rook,“SocialSupport,SocialDeficitsandtheFamily:TowardtheEnhancementofWell-Being,”inS.Oskamp(Ed.)FamilyProcessesandProblems:SocialPsychologicalAspects(NewburyPark:Sage).17LaurenDrell,“Sixcompanieswithawesomeemployeeperks,”Mashable,August7,2011,http://mashable.com/2011/08/07/startup-employee-perks/(December22,2018).18VictorLipman,“PeopleLeaveManagers,NotCompanies,”Forbes,August4,2015,https://www.forbes.com/sites/victorlipman/2015/08/04/people-leave-managers-not-companies/#278fdc7347a9(December22,2018).19DanHeathandChipHeath,“MadetoStick:WhyCompaniesShouldPavetheWaytoPraise,”FastCompany,September17,2008.20MichaelNortonetal.,op.cit.21JoanneWojcik,“VolunteerWorkBenefitsEmployers,EmployeesasWellastheCommunity,”BusinessInsurance,Vol.42Issue25,June23,2008,pp.14-16.22MichaelNortonetal.,op.cit.23PepsiRefreshProjectOpens2011VotingSeason,PRNewswire,April28,2011,http://www.prnewswire.com/news-releases/pepsi-refresh-project-opens-2011-voting-season-120881814.html(December22,2018).24Ariely,op.cit.25CassieMogilnerandJenniferAaker,“TheTimeVersusMoneyEffect:ShiftingProductAttitudesandDecisionsThroughPersonalConnection,”JournalofConsumerResearch,August2009,pp.277-291.26JenniferAaker,et.al,“CultivatingAdmirationinBrands:Warmth,Competence,andlandinginthe‘goldenquadrant,’”JournalofConsumerPsychology,November2,2011.27MichaelJ.Norton,The‘IKEAEffect’:WhenLaborLeadstoLove,SSRN,March4,2011,http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1777100(December22,2018). 28SeeStanfordGraduateSchoolofBusinessNo.M-333,“Zappos:HappinessinaBox,”writtenbySaraGaviserLeslieandProfessorJenniferAaker.29AriLevy,“Salesforce’sMarcBenioffunpluggedfortwoweeks,andhadarevelationthatcouldchangethetechindustry,”CNBCTech,December30,201,https://www.cnbc.com/2018/12/30/salesforce-marc-benioff-talks-tech-ethics-time-magazine-and-vacation.html(December30,2018).


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30Blue-collarworkersatFerraricomprisedmuchoftheskilledworkforceinvolvedinalltheproductionprocesses,fromfoundingthealuminumalloysfortheengines,weldingandassemblingtheall-aluminumbodies-in-white,machiningenginecomponents,assemblingtheengines,andassemblingthecars,plusmechanicswhoworkedintheexperimentalandR&Dareas.

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