Copy of First Happiness…Then Success: Why Purpose-Driven Leaders Get the Order Right (TPL Insights #316)

By Rob Andrews

Most leaders I have known over the past three decades share a common assumption. If they can just hit the number, land the promotion, close the deal, or scale the company, happiness will follow. Success first, happiness second. It sounds logical, but the research says it is backwards. And I have a client whose stock price went up 40-fold in eight years, which proves the point.

Arthur Brooks, a professor at Harvard Business School who has spent his career studying the science of human happiness, makes this argument directly. He writes that chasing success has costs that can end up lowering happiness, no matter how hard and how smart you work. One study he cites showed that even when a boss doubles an employee’s pay, job satisfaction nudges up only marginally and then drifts right back to where it started. If compensation were the engine of happiness, you would expect a very different result.

The evidence points in the opposite direction. When researchers look at what actually drives success, they find happiness leading, not lagging. Scholars who surveyed hundreds of studies concluded that happiness leads to success across multiple life domains, including income, health, friendship, and work performance. Not the other way around.

As a practitioner who has been studying organizational health for more than thirty years, I find this entirely consistent with what I have seen inside organizations. The healthiest, highest-performing cultures I have encountered are not full of people who found happiness after achieving success. They are full of people who found meaning in their work first, and their success followed.

A $55 Million Company Running on Fumes

In 2014, Allen Austin began working with the board of directors of a $55 million engineering construction consulting firm. The firm was 37 years old, technically excellent, and beloved by its customers. But by every measure of organizational health, it was failing on the inside.

When we administered the TPL Organizational Health Index across the organization, the results were striking. The purpose score came back at 1.61 out of 5.00, second-lowest of all nine principles. Leadership scored 2.11. Measurement scored 1.51. The firm had no unified vision, no clarity of strategy, no systems for workforce engagement, and no way to connect daily work to anything larger than the task in front of each person. Junior engineers did not understand how their work affected the company at all. The organization was running at 120% of capacity, burning out its best mid-career people, and watching them leave for competitors.

And yet revenues were record-high. The Texas economy was strong. The company was busy.

That is the trap Brooks is describing. Financial success was masking the absence of the conditions that produce sustainable success. The firm was not a purpose-driven organization. It was a technically proficient organization riding a favorable market. Those two things are not the same, and eventually the difference shows up.

We brought in a new CEO in January of 2015, selected through our FORESIGHT search process after the OHI gave us everything we needed to define what that leader had to be and do. His first order of business was not the P&L. It was purpose. Then unified leadership. Then clarity. Then stakeholder engagement. Then measurement. The TPL principles, in order, applied with intention and consistency.

What Applying the Principles Actually Produced

In his first year, the new CEO delivered a 22% revenue increase over the best year the firm had ever recorded. The year after that, another 14%. By month 33, revenues had grown from $55 million to $83 million and EBITDA had more than doubled, from $10 million to $25 million.

That was just the beginning. Over eight years, the firm tripled revenues from $55 million to $141 million. It tripled EBITDA, from $10 million to $52 million annually. Net operating margin expanded from 18.2% to 41%. Total EBITDA generated over the seven-year period was $233 million, against a baseline projection of roughly $70 million had nothing changed. The incremental enterprise value created since Allen Austin engaged the firm exceeded $595 million. For shareholders who held their position, the stock price increased approximately 40 times. The total cost of the engagement was $286,667.

That is the ROI on purpose. That is what happens when you build the conditions for people to find meaning in their work.

What Brooks Gets Right

Brooks frames his prescription in practical, not theoretical, terms. He tells leaders to focus less on visible success metrics and more on the less visible ones. He tells leaders to find one employee, explain concretely how that person’s work serves others, and thank them for it. Then do it again. Scale that over time, person by person, until the organization has a shared understanding of why the work matters.

That is not motivational content. That is operational culture-building, which is exactly what TPL is designed to produce at scale. The Leading with Purpose principle is not a values exercise. It is an operational imperative that has a measurable effect on revenue, margin, retention, and enterprise value. The Atlas Industries story is the proof.

Brooks also points out that up to 77 percent of corporate employees feel like a cog in a machine. That number should alarm every leader who reads it. It means the majority of most workforces are going through the motions, disconnected from any meaningful impact. Productivity is capped. Turnover is elevated. Innovation is suppressed. And all of it is invisible on the income statement until the day it stops being invisible.

The Question Worth Asking

If you are a leader reading this, here is a direct question. Can every person on your team articulate, in plain terms, how their work serves someone else? Not in a corporate mission-statement way. In a real, human, specific way?

If the answer is no, that is a leadership problem worth solving this week. Not next quarter. This week. Find one person. Tell them what their work actually means. Thank them for it. Build that into your rhythm. Purpose is not a one-time speech. It is daily behavior, reinforced by systems and sustained by leadership that takes it seriously enough to practice it consistently.

The Right Order of Operations

Happiness leads to success, not the other way around. A firm that scored 1.61 on purpose in 2014 generated more than half a billion dollars in incremental enterprise value and a 40-times return for its shareholders over the next eight years. Not because the Texas market was favorable. Markets are favorable for everyone. Because a leader walked in, applied nine principles for building organizational health, and created the conditions for people to find meaning in their work, align around a shared vision, and perform at a level they had never reached before. Get the order right. Everything else tends to follow.

Warmest,

Rob Andrews

Chairman & Chief Executive Officer

Celebrating 28 years of Executive Search, Leadership Advisory, and Interim Executive Excellence

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