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What Business Leaders Can Learn From Bhutan

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Having spent the past 32 years in the Silicon Valley/Bay Area region, I guess I've grown accustomed to start-ups wreaking havoc in mature industries. Hewlett-Packard, Apple, Google, Facebook -- they all were launched within a 15-mile radius of my alma mater, Stanford University, and they went on to revolutionize not just their industry, but they changed our relationship with technology and, frankly, in Facebook's case, our relationships with each other.

So, it's no surprise that I'm fascinated with a little, almost-mythical country in the Himalayas that is revolutionizing how world leaders are looking at the definition of success. Like The Mouse That Roared (a popular book and film from the late 1950s about an imaginary, bucolic country situated between France and Switzerland that becomes the admiration of modern society when it declares war on the United States), Bhutan is getting the kind of attention an off-off-Broadway play gets when you know it's destined to be a hit. In 1972, the 17-year old King of Bhutan asked the blasphemous question, "Why are we so focused on Gross Domestic Product? Why aren't we more concerned with Gross National Happiness?" For nearly 40 years now, Bhutan has been reinventing itself based upon the premise that the ultimate public good a leader can provide his or her people isn't material possessions, but instead it's happiness or well-being.

This "beginner's mind" idea has found fertile ground in the 21st Century as more than 40 countries are now studying their own GNH (Gross National Happiness). Nicolas Sarkozy recently announced what some are calling a "joie de vivre index" in France based upon an 18-month study of two Nobel economists who recommended that the largest countries of the world end their obsession with GDP and consider some new intangible metrics. In essence, they're suggested that GDP -- which focuses exclusively on tangible production and consumption -- no longer should be our sole definition of global success especially at a time when 64% of the world's GDP now comes from the intangible service industry. In other words, GDP measures outputs which might have made sense in a more mechanized, industrial era. But, given the knowledge era we now live in, measuring those inputs that influence the output is a more holistic method of evaluating whether we're creating sustainable success.

This may seem abstract, but it's extremely relevant to business leaders who have come to realize that a myopic focus purely on the bottom line can have the same effect as driving a car at full speed all the time without doing occasional maintenance and refueling. Here are three important lessons for business leaders to learn from Bhutan:

(1) Leaders don't create happiness for people. The Prime Minister of Bhutan told me his goal is "to create the conditions in which happiness can flourish." Abraham Maslow once suggested business leaders "can set up the conditions so that peak experiences are more likely, or one can perversely set up the conditions so that they are less likely." Great leaders create healthy habitats. From those healthy habitats sprout the outputs we're looking for whether it is happy citizens or a profitable business. Silicon Valley has an eco-system that is primed for innovation, but as many regions of the world have learned, you can't easily replicate the intangibles that create such a cultural habitat. So, first brainstorm with the leaders in your company about what cultural "conditions" would help your company flourish and what kinds of specific things you can do to create that habitat.

(2) Leaders value and measure the intangible. The Bhutanese have created a science behind the art of happiness. They measure four (4) pillars, nine (9) key indicators, and 72 various metrics to help them understand whether they are creating fertile conditions for happiness. The Gallup organization has developed 12 questions that help leaders measure employee engagement like "At work, do you have the opportunity to do what you do best every day?" or "Does the mission/purpose of your company make you feel your job is important?" It's time for leaders to distinguish between what they can easily count ("Are you being paid enough?") with what employees most value. The intangibles of mission and meaning are powerful fuel for knowledge-driven industries, so find ways to measure these vital inputs.

(3) Leaders are willing to deviate from the norm. Most world leaders didn't take notice when the teenage King of Bhutan asked his impertinent questions about GDP. Those that did notice chuckled and chalked this idea of GNH up to "Buddhist economics." But, if you're a small country or a small company, your best strategy to compete with the big boys is to find a niche and own it. In my case when I started my company 23 years ago by purchasing an inner-city motel, I went after rock 'n roll bands as our core customer, even though conventional hoteliers told me I was crazy to want these party animals. Yet this target customer was perfectly suited to my funky motel and this was an untapped market (bands) that was growing and recession-proof. Similarly, it took 30 years for the world to embrace Bhutan's approach to GNH, yet this "happiness niche" has turned out to be much larger than the King of Bhutan ever imagined. Find a niche, embrace it wholly even if it's unconventional, and deliver on your promise better than any of your competitors.