A price on happiness

Interesting read in the Financial Times on Irrational Capital and its shift to make stock picking decisions based on how happy a workforce (appears) to be. Irrational Capital announced that it had created a 'black box' of proprietary data including employee survey outcomes to determine the emotional health of a workforce. It is now ‘betting’ through its investments that employee satisfaction will translate into improved performance and retention, ultimately resulting in higher returns for investors.

This announcement generated a huge amount of interest and cynicism but, so far, Irrational Capital’s approach seems to be working with its new fund outperforming peers. Who can say if this is just chance, but for me, one of the most striking elements is the acknowledgement that our relationship with work has changed. Irrational Capital has literally put a value on the connection that people feel at work and demonstrating that happiness and employee satisfaction translate into productivity gains.

It debunks once and for all that culture is a nice to have. In fact, investing in engaging with your team and culture will translate into productivity gain and shareholder value. Culture, strategy have to go hand in hand for lasting impact.