What we can learn from the happiest countries in times of adversity

It might not seem like the right topic these days with the world facing the terrible situation of COVID-19. But on the other hand, this is maybe exactly the right moment to stop and take time to really understand what makes us happy not only individually but also collectively in our communities and the countries we live in. 

The world Happiness Report 2020 came out last week and Denmark was again number 2, just behind our friends from Finland who are number 1 for the third time in a row. Again this year, not surprisingly, we find all the Nordic countries in the top 10. Both US and France are up one place to respectively 18th and 23rd. 

People often ask me how we measure this “happiness” that I always prefer to refer to as “well-being” or “life satisfaction” since it reflects it much better. The 6 variables are GDP per capita, social support, healthy life expectancy, freedom, generosity, and absence of corruption. In addition, they look at positive and negative emotions experienced yesterday. 

Income differences are the single largest contributing factor, at one-third of the total, because of the six factors, income is by far the most unequally distributed among countries. GDP per capita is 20 times higher in the top ten than in the bottom ten countries. Having said that, it appears that living in a

higher trust environment gives an average life satisfaction of 7.72, compared to 6.76  ( out of 10 ) in the lower trust environment. The effects of trust on inequality of well-being are very important. Average life satisfaction is estimated to be almost one point higher (0.96 points) in a high trust environment than in a low trust environment. One very interesting point in the report is also that when faced with adversity (divorce, unemployment …) being in a high trust environment limits the effects on our overall well-being as supposed to living in countries with low trust and poor governance. 

The authors of the report have also taken a closer look at the “Nordic model” to try and explain why the Nordic countries repeatedly come out at the top. 

They identified the following:

Freedom to choose your life :  Autonomy and the freedom to make life choices are known to be connected to subjective well-being. A study of more than 60 countries shows that the degree to which autonomy and the overall freedom to choose your life are valued in those countries is a better indicator of well-being than national wealth for example. Denmark also has one of the highest levels of social mobility and people have a sense of having  equal opportunities. 

Trust : Trust in other people is strongly linked to happiness in communities. Not only trust in other people but also trust in institutions and government. Again the Nordic countries are known to have some of the highest trust levels in the world. They are also the countries with the least corruption ( Denmark is the least corrupt country in the world according to Transparency International ) with the exception of Iceland (36th) which can probably be explained by the banking crisis a couple of years ago.

The welfare state: I often refer to the welfare state as “a common project with a sense of purpose “ and indeed, people seems to be happier in countries with a well-functioning and generous welfare state with trust in both government and institutions. Several studies also indicate that the Nordic countries prefer more equal societies, and since inequality has a negative impact on happiness, especially among the poor in Europe, it seems that low levels of inequality contribute to the happiness of Nordic countries. 

Social comparison : We know from several studies that comparing ourselves and our lives to others has a negative impact on our well-being. People’s subjective perception of their own well-being compared to others appears to have bigger influence than objective measures such as income. Since the Nordic countries are amongst some of the most egalitarian countries, this happens less than in other parts of the world. An interesting study comparing United States and Denmark shows that the favorable difference in happiness for the Danes was particularly true for low income citizens. Being poor in Denmark does not have as big an effect on happiness as in the US, where the gap between rich and poor is much larger and where there are not similar welfare services available for the poor. 

My masterclasses and teachings at Sciences Po and HEC executive Education on well-being and performance in companies are inspired by the Danish ( or Nordic) model as it is described above. 

When leaders focus on cultivating trust in their teams they generate more well-being but also more innovation, engagement and performance. This is equally true and reinforced when there is a high level of “psychological safety” in the company culture. This is obtained when people feel free to be themselves, ask questions, suggest ideas, admit errors, express doubts without being afraid that those surrounding them will make fun of them, embarrass or even humiliate them. 

Finally, I make leaders reflect on their common project with a sense of purpose ; In what way are they contributing in making the world a better place through the activities of the company and how can they increase engagement amongst the teams by making this purpose clear to everyone. 

In the middle of this major and unprecedented crises facing COVID-19, it seems that the companies not having taken such measures into account are suffering more due to the massive use of remote work which requires a solid level of trust and engagement from the team members. 

With these morning reflections from my confinement in Paris I wish you all a nice day, please stay safe and stay home.