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Community engagement more important than material wealth

Tuesday, March 14, 2006

Community engagement more important to happiness and productivity than material wealth
By Terry Hadley
March 14, 2006, Morris J. Wosk Centre for Dialogue

Helliwell said that isolation from the community continues to be on the increase, as our cities have transformed into global centres attracting a high turnover of people from around the world

Relationships with family and friends and even joining community groups are more related to happiness and satisfaction than material wealth, according to John F. Helliwell.

And in the end, that affects productivity in the workplace and the bottom line.

"We overstate the importance of material consumption," Helliwell told The Vancouver Board of Trade at the launch of its new speaker program, Knowledge for the Boardroom — Dedicated to Corporate and Public Stewardship.

The event was sponsored by the University of British Columbia Sauder School of Business and technically by the Morris J. Wosk Centre for Dialogue.

Helliwell, who is one of the world’s foremost researchers on people’s happiness and well-being, presented his latest research based on surveys of more than 100,000 people both here in Canada and around the world. He currently works at UBC as fellow, Canadian Institute for Advanced Research and director, Social Interactions, Identity and Well-Being Program.

Helliwell showed how his results break new ground in highlighting the significance of a society’s well-being, or "social capital" — the value of people’s social connectedness through their networks and engagement in the community around them.

Helliwell analyzed data from Statistics Canada, which he claims is the best statistics-gathering organization in the world. Calling himself a "student of well-being," he admitted he had originally been a skeptical economist who had become convinced by the evidence. "We got these first results out and they blew my mind," he said.

Using an "Index of Life Satisfaction," tens of thousands of people, including those living in the Lower Mainland, were asked to rank from one to 10 all aspects of how satisfied they are with their lives. The studies were then carried out systematically in other parts of the world.

"This is taking economics back to its roots — the utility of people," said Helliwell. "Social capital, where it exists, is extremely important."

To illustrate his results, Helliwell put a dollar figure to give a recognizable value to how important certain factors are to well-being. Factors measured were engagement (how connected people are with others); employment (paid or not); family, friends and neighbours; good health; high quality of government at all levels, and adequate income (relative to expectations).

Results showed that being a member of an organization, in terms of increasing well-being, is valued at the equivalent of around $25,000, seeing family frequently at $125,000 and seeing friends frequently at more than $100,000. Trust towards others is valued at nearly $80,000 while negative evaluations included being separated from your spouse at minus almost $70,000 and illness topping the negativity list at minus $320,000.

In the workplace, the most valuable factor of well-being was trust toward management, valued at more than $500,000, when the most-trustworthy and least-trustworthy managements are being compared. This shows that even a modest change in workplace trust relations can significantly affect life satisfaction.

Helliwell quoted the first proponent of social capital, Havard political scientist Robert Putnam and author of Bowling Alone. He said while social capital increased in the first 70 years of the last century, it has been on a downward trend in the last 30 years.

Helliwell warned that disengagement, or isolation and disconnectedness from people in the community, continues to be on the increase, as cities have transformed into global centres attracting a high turnover of people from all over the world.

"Community takes time to build," he said. "That is even tougher in the high-turnover, modern urban neighbourhoods of today." Helliwell added that most violent crime is committed by people who tend to be "ill-connected." "We have to worry more about the people falling off becoming engaged," he said.

Ranking the national averages of life satisfaction on a scale of one to 10, Helliwell said Canada scored high — about the same as the U.S. and just slightly behind Denmark. Sweden, which also ranks high on the scale, has a high occurrence of people engaged in memberships of organizations, which in turn builds up "trust" relationships, or what Helliwell calls "trust capital."

Concluding a question-and-answer session, business and education leaders concurred the research is a breakthrough and should be applied to the business world. Happy employees are more productive and increase shareholder value, although "it hasn’t yet impacted business in a significant way as it should — at least not in the CEO’s office," said Board of Trade chairman and dean of UBC Sauder School of Business, Daniel F. Muzyka.

Dr. Ali Dastmalchian, dean of the Faculty of Business, University of Victoria, was convinced enough to put the theory into practice. "This will hopefully convince business schools to change and incorporate these elements into their educational packages," he said.

Helliwell agreed the "data is now strong enough to go into real-life situations" and said some of the same surveys had already been conducted in corporations.

Future Knowledge for the Boardroom seminars will focus on the importance of corporate and public stewardship in today’s society, and how competent corporate stewardship is directly linked to shareholder value and the success of the organization — by engaging with employees inside and the community outside.

"Corporate stewardship is vital to long-term shareholder and business success. Good corporate citizenship hinges on looking at the enterprise of human capital," said Muzyka.

Research reveals that workers place high value on non-financial job features like trust, interaction with co-workers and input in decision-making, which make up the social capital of the workplace.

Most importantly, a person’s overall well-being and satisfaction in life are significantly affected if any of these are missing in the workplace, and shows in their personal success rate and that of their organization.

The results highlight the many opportunities both managers and employees have to make their workplace better and to increase both individual satisfaction and workplace productivity.

"Some of these latest theories are brand-new to the marketplace," said Darcy Rezac, managing director of The Board of Trade. "The well-being and satisfaction of people in the workplace, the real currency of human capital, are directly linked to the efficiency and productivity of individuals in their personal lives and the organizations where they work. The Board of Trade is launching this new series to explore all aspects of corporate and public stewardship because these theories are vitally relevant to the business world today."

About Helliwell
John F. Helliwell is an Arthur J.E. Foundation Fellow of the Canadian Institute for Advanced Research (CIAR) and UBC (based on joint research with Haifang Huang). His data is from the new CIAR program on "Social Interactions, Identity and Well-Being." Helliwell’s paper, entitled How's the Job? Well-Being and Social Capital in the Workplace is available among others on the National Bureau of Economic Research (NBER) web site.

View Helliwell’s presentation (PDF/299kb)

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