Frontier businesses are making money and creating wellbeing at the same time, thanks to a recognition and appreciation that the two are deeply interconnected.
It takes a big shift in perspective from seeing wellbeing as something on the periphery, to instead being at the core of an organisation's mission and central to maintaining productivity.
Most leaders aren’t really trained in fostering wellbeing, and it shows.
The Australian Productivity Commission estimated a $19 billion cost to the economy every year, as a result of lost productivity from the impact of mental health conditions.
The recent National Working Families Report found that two-thirds of working parents reported feeling too emotionally or physically drained when they got home from work to contribute to their family. This has serious knock-on social costs and effects.
Psychologists have long told us that our children’s early years are critical for long-term development, but many working parents are emotionally absent due to work demands.
So, why aren’t we joining the dots?
While the impact of turning a blind eye to wellbeing is significant, the good news is that business leaders across the world are starting to change their views on the role of wellbeing in the mission of their organisation.
Through The University of Queensland (UQ) Business School, we researched 117 leaders from Alaska, India and Norway to find out how they view wellbeing in relation to their organisation.
We asked leaders how many of these eight components of wellbeing they take into account: economic, environmental, social, cultural, material, spiritual, physical and psychological.
We also asked leaders in the study which stakeholders they think about wellbeing for. Three very different types of leaders emerged.
Leader One: Wellbeing is for home
One group sees wellbeing as something employees do at home. This group restricts the meaning of wellbeing to just the mental and physical health of their employees.
Leader Two: Wellbeing is a support function
Another group actively supports the wellbeing of their employees through in-house support programs, including conducting regular one-on-one meetings with team members and providing free gym memberships for staff.
This group considers a wider range of wellbeing components to also think about environmental, cultural and social wellbeing, but these are all seen as separate.
Leader Three: Wellbeing is a strategic mission
For the third group, which is much rarer than the other two, wellbeing is a new frontier – a core strategic mission. For this group, wellbeing is about a web of wholeness. This group thinks about interactions between all eight components for not only employees but also their customers and wider communities as well.
A good example of this type of approach is the world-first ‘wellbeing budget’ launched under New Zealand Prime Minister Jacinda Ardern. This leadership approach recognises financial prosperity alone is not a sufficient measure of the quality of life, and that many wellbeing factors are interconnected to sustained economic output.
New Zealand's key five priorities for wellbeing in the budget are: improving mental health, reducing child poverty, addressing the inequalities faced by indigenous people, thriving in a digital age and transitioning to a low-emission, sustainable economy.
This approach tackles wellbeing proactively, which also affects the bottom line. Past budgets in New Zealand have funded mental health and addiction services only for those with the highest needs.
People with emerging issues or mild-to-moderate mental health or addiction needs have largely been left to their own resources or have faced lengthy waits before receiving help.
Yet it’s estimated that the economic cost to New Zealand of serious mental illness amounts to approximately 5% of Gross Domestic Product each year.
Instead of trying to optimise any one component of wellbeing, this emerging type of leader identified in the third group of our study has shifted perspective to see how all the components of wellbeing form an integrated strategy for a range of stakeholders.
The bottom line? They are focused on supporting employees, their families and communities, while building businesses.
How did these leaders reach this perspective? They progressively developed their capacity to include more and more complexity. In particular three things happened:
- They realised that both purpose and profit are essential to support sustainable business outcomes;
- They learned that wellbeing at work, in their business mission and wider society are all interconnected;
- They built a culture on wellbeing by surrounding themselves with people who have had similar realisations.
The third group of leaders are showing that wellbeing isn’t naïve, idealistic, feel-good stuff. They consciously juggle the needs of business, families and community in an ongoing balancing act.
They try to stay on top of their wellbeing impacts. Common types of conversations group three leaders might have include:
“Where are we doing avoidable stakeholder damage, and where are our opportunities to create better wellbeing value? We have satisfied customers, but what is the wellbeing cost to employees, their families, the natural environment or ethnic cultures around us?”
There are very real consequences for how we choose to deal with the balancing acts.
The Banking Royal Commission is a prime example of how a single-minded focus on optimising business outcomes can be achieved by destroying families and communities in the process.
My research at UQ Business School is responding to calls for a different type of leader by helping them deal better with increasing complexity.
The three different types of leader reflect different strategies for dealing with the tension between wellbeing, business, family and community.
Group one leaders avoid the tensions by sidelining wellbeing as people’s personal business. Asking these leaders to embrace wellbeing, family, community as well as their business can be overwhelming.
Group two leaders try to accommodate it by viewing the tensions as worthy of some support. This is a good transition point to greater awareness. Group three fully integrate the tensions and make the balancing act their core business.
But getting to the group three leader approach is a developmental journey, so that the leader is comfortable juggling more complexity.
Supporting leaders to handle more complexity is one of the most tangible ways that we can actually get the better leaders we want.
What seems key though is to stop treating wellbeing, economic outputs, family and community as either/or choices, and instead see how these things are vitally interconnected. Our success at realising this though is tied to our capacity to process complexity.
Support and capacity-building need to balance our strident critiques of leaders if we are to realise greater wellbeing goals through business.