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How Some Companies Are Thriving In This Strange Economy

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It has always seemed kind of obvious to me that if a company hires great people and then creates a corporate culture where those people feel respected and supported - the company is hugely increasing the odds that it will succeed.

Yesterday I was talking to a potential client whose company is about to go through a significant change (they're splitting  from their joint venture partner of almost 20 years). She was bemoaning the fact that her boss, the company president, seems to think that putting more than minimal energy into helping his employees through the transition is "touchy-feely" and a waste of resources.

Then this morning I read a really interesting article here on Forbes by Jaquelyn Smith, The 10 Companies With The Biggest Jumps In Employee Happiness.  The statistics she cites are from Careerbliss.com, the website of CareerBliss, a company that calls workplace happiness "the core of their mission."  They got their results by looking at ten key factors (work-life balance, one’s relationship with the boss and co-workers, the work environment, job resources, compensation, growth opportunities, company culture, company reputation, daily tasks, and job autonomy), and asking respondents to rate both the importance of these factors to them, and how they would rate their company on each.

As I was reading through the list of companies that have done the most to improve their "employee happiness" scores over the past year, according to these criteria, I got curious.  Lots of research shows that employee satisfaction is strongly correlated to positive business results; I've often written about it here at Forbes and in other forums. I wondered if it was true in this case, as well.

So I looked up the financial results of the top 5 companies on the list: Qualcomm , which improved its happiness scores by 30.2%, Philips Healthcare, which saw a 15.6% increase, Insight Global, where the score rose 12.5%, and finally Oracle and Comcast , which increased their  scores 9.4% and 8.9%.

And their financials, in a world economy where many companies are struggling, look pretty darn good.  Three of the five - Qualcomm, Insight Global and Comcast - are rocking it, with solid increases in both revenue and net income.  Philips Healthcare and Oracle are holding their own, with 2013 results comparable to 2012....and I suspect, in both cases, their success is significantly constrained by external factors (for Philips, the European economy; for Oracle, the disruptive and wide-ranging changes in their industry).

All of which goes to this point: in a business world where there are lots of success factors over which you have little control, one of the things over which you DO have control is how you treat your employees: the company culture you create.

And it leads me to wonder, given this data, and all the other data that supports the connection between well-treated, satisfied employees and good business results...why are so many companies still awful places to work, places where employees feel marginalized, not trusted or respected, like cogs in a machine? Why are there so many executives who still reject the idea of focusing on improving employee satisfaction as superficial, immaterial, a waste of time and money?

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Check out Erika Andersen’s newest book, Leading So People Will Followand discover how to be a followable leader. Booklist called it “a book to read more than once and to consult many times.”

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