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Finally, Proof That You Can 'Do Well By Doing Good'

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MIKE NORTON
Mike Norton

The phrase "doing well by doing good" has been used, at my last unscientific count, roughly 38 trillion times. Yet despite the buzz, there's surprisingly little rigorous evidence demonstrating that companies really can make money by doing more good -- by being, for lack of a better word, nicer.

It's critical to prove out the hard, cold, cash benefits to companies willing to try the warm fuzzies of caring about something other than shareholder value -- to redefine success as truly doing good and doing well. To this end, my collaborators and I have spent time over the last several years working with companies and non-profits to carefully document the positive impact of kinder, gentler corporate initiatives.

Imagine you showed up at work one morning to find an envelope on your desk. You open the envelope, and inside you find $20 and a cryptic message: Spend this money on a co-worker by the end of the week. What would you do? You'd have to pick who to spend it on -- Dave, the nice IT guy who helped fix your laptop? Monica, the VP of Sales who always has your back in meetings? -- and then you'd have to decide what to buy them. Lunch? Some music? A piñata?

In our experiments, we give cash to members of teams, from pharmaceutical salespeople to members of dodgeball teams to students working on class projects, and ask them to spend it on each other. The range and ingenuity of purchases is fascinating. And yes, one team actually did buy a piñata. Most importantly, when we look at the impact of this kind of prosocial spending, we find that teams that spend on each other tend to perform better. What's more, they even perform better than teams who get a more typical bonus: money for themselves. Salespeople who spent on others increased their sales in the ensuing month. Salespeople who spent on themselves? No change.

The benefits of prosocial bonuses extend beyond co-workers. In another experiment of ours, National Australia Bank gave some of their employees money to spend on charity. Unlike typical corporate philanthropy, where the CEO decides where all the money goes, the bank gave each employee their own "charity voucher," allowing employees to donate to whatever cause was nearest to their hearts, whether curing breast cancer or saving rainforests. Not only were employees who gave happier, but their job satisfaction increased as well.

And other research suggests that simply having a beneficiary in mind as you work -- of knowing that the work you do is helping others -- increases motivation and effort. One study at the University of North Carolina focused on employees at a call center whose job was to raise funds for the university. A substantial percentage of those donations went toward scholarships for students in need of financial assistance. Researchers brought one of those students into the call center to tell the employees how his scholarship had changed his life. This 10-minute experience was so emotionally powerful that one month later employees were still not only making more calls, but raising more money.

Taken together, these results suggest that encouraging employees to define success not only as "How much money am I making?" but "How much of a positive impact am I having on my co-workers? On the world?" leads not only to increased job satisfaction, but also benefits the bottom line.

Imagine a performance review where your yearly bonus was tied not just to how many widgets you sold, but how many you helped your co-workers sell, or how much impact you had on your community. It's a simply change to make logistically, but a huge change in mindset -- one that we hope more organizations will adopt.

This post is part of a series produced by The Huffington Post in conjunction with our women's conference, "The Third Metric: Redefining Success Beyond Money & Power" which will take place in New York on June 6, 2013. To read all of the posts in the series and learn more about the conference, click here. Join the conversation on Twitter #ThirdMetric.