Redefining Employee Flourishing with Ali Khan

Ashish Kothari: My dear friend, Ali. I'm so excited to welcome you to the Happiness Squad podcast. I've been waiting for this conversation for a while. So welcome.

Ali Khan: Thank you so much for having me, Ashish. Working with you has been a learning experience. I'm sure this is not going to stop here. This is where we'll probably pick up from.

Ashish Kothari: It's just been such a joy. I'm excited about the things we're going to create together. We're united in this mission to help individuals, teams, and organizations flourish. So it’s just a joy, my friend.

So, we always start with this question to our guests: What does happiness mean to them and how has that definition changed over time?

But I'm going to ask you a slightly different question. What does flourishing mean to you, and how has that definition of what helps individuals and organizations flourish changed over time for you?

Ali Khan: Thanks for catching me off guard. First of all, flourishing and happiness are intertwined, that's the truth. I love your name, the HAPPINESS SQUAD, and happiness is a fundamentally core tenet, a foundation of flourishing within itself.

If I answer the question, we look at flourishing through the lens of work. We say it's about people reaching their full potential through the conditions that enable optimal performance, fulfillment, and growth.

When we think about that and how we reach there, hopefully it helps explain how it's changed over time. Flourishing, we find, has been there through the ages. It's been the red thread throughout history.

It's been there as part of foundational elements related to legislature thinking. It's been there from a spiritual thinking, a very strong religious principle thinking. It also has defined how organizations like to think about psychology as well.

Some of the greats have really come to this, but what we found is that it's really been fairly new in the context of the workplace. And when I say new, I mean in terms of how organizations have only really just started to bring the pieces together.

Originally, when we conceived SHAPE as an idea six or seven years ago, it wasn't actually looking for flourishing. It was looking for what businesses really want from employees, which is performance. They’re trying to enable performance.

And if you get performance as a leading metric, your lagging metric, which isn't true to say productivity is a lagging metric, but it's closer to that than it is to a leading metric. Along the way, the research thesis was what are the drivers that fundamentally help or hinder a person from reaching their peak performance every single day.

And as we started going through that, it became so easy to see that for example, if I'm going to have the right physical work environment, the right temperature, ergonomics, the right lighting around me, fundamentally you are in a heightened state. And therefore you are flourishing in those drivers, or you are struggling, or you should be striving in the midpoint to get to the top.

We didn't want to use languishing as a model point. We wanted to use flourishing as our case in point, striving and then struggling. If you flourish across all those drivers happens to be relationships and kindness and supportive and empathy, you have got the best possible chance to perform. So what we found was actually flourishing and performance really go well closely together.

Ashish Kothari: Very much linked with what I'm finding in my work, what Alex Edmonds has found, and what all the folks at the Center for Positive Organization Scholarship have been teaching for the last 20 years, like Kim Cameron, Jane Dutton, and Bob Quinn.

I love what you said about when you study flourishing at work and they are intertwined with happiness because work consumes the majority of our waking hours for most working people. If work has no meaning or worse, we find showing up to work draining, you can't have life satisfaction or happiness. They are fundamentally linked.

The second point, which is also really important as you link that, is why we so quickly connected and became such good friends. This work can help really unlock performance.

When we did research, we did an external survey around where organizations are. What we found is that only 25 to 30% of the full human potential is really being harnessed in many organizations.

I'm curious. You've done so much extensive work, Ali. What are you finding in the business case for flourishing and how are you articulating it in terms of the productivity and creativity that can be unlocked? What are some quantitative numbers you're finding?

Ali Khan: I'm going to give you just two examples for this one because we've got quite an extensive array of metrics starting to come together.

The first one is, if people want to have a look on my LinkedIn profile, they'll be able to see that we're articulating the value of flourishing through the context of: If you have this driver of flourishing present, what would it look like for you to flourish with or without that?

Let's say you've got a great manager. There are factors we’ve studied around that and some have surfaced. Your chance of flourishing can be up to seven, eight, nine times better. And if you don't, it can actually be negligible; it can really drag you down.

What we then start to do is peel away and start to layer more information on top. For example, if I don't have a great manager, but I've got really good self-determination and a wonderful set of colleagues, how much do they compensate for and drive that flourishing?

Now we're starting to find how those compensation, or as we call in the literature, confounding and contributing factors, start to define the more complex nature of how you measure this. So this is an entire methodology that we had to develop from scratch in order to answer that very question: What's the value of flourishing in real-life terms? So that's one aspect.

The second aspect I want to answer your question is the dollar value. Is there a dollar value to productivity fundamentally?

We spend a lot of time building another methodology we call the value of the benefit. So, a simple way of articulating this, there's one acronym everybody will remember very easily called CRAP, which stands for claims to risk, retention risk, attrition, absenteeism risk, and performance risk.

We went back to the literature and found economic models that link right into the heart of industry measures of those four areas. Now, three of those four are absolutely there in the Bureau of Labour Statistics, or in the UK, the Office of National Statistics. We went to 40 countries and started to collect that data. This was a two-year study.

What we assembled were lookup tables of what the government is telling us, and we could source them. What does an organization look like on average in an industry of a certain size and scope when you look at them from the lens of claims risk? And so, you've got insurance claims (health, life, etc.), employee liability, and so forth.

Then you’ve got retention. It's basically voluntary attrition. Then you've got absenteeism. All these numbers are recorded there. So in fact, we started to build a quite complex model. It's multi-layered. And then what we did was we applied it to your scoring system within SHAPE.

So when you scored, let's say, for example, 80, those 20 points have a value, and we can now link that value to the value of the benefit that you haven't availed. And when we can compare that and correlate that to the wage tranches that we are collecting from different people, you can actually construct a real dollar value that we think is around about 10 to 20 percent out of real CFO material quality information we're providing.

This is an entire methodology to look at productivity from a human capital, linking it to financial capital.

Ashish Kothari: There's so much there to unpack, and I loved many of the points you made. Let me start with how beautiful your acronym CRAP is—Claims, Retention, Absenteeism, and Performance. These are all quantifiable: productivity, absenteeism, retention, and I'm assuming in claims, it's healthcare costs and insuring your people, or does it also cover lawsuits or health risk claims?

Ali Khan: It covers all of that, from compensation to employee liability. It’s very extensive.

Ashish Kothari: I love that. There's a couple of other ones that we usually throw here in our methodology, one of which is creativity. The other one is we break performance into productivity and profitability as key measures, but the simplicity of CRAP is something most CFOs can grasp. And 10 to 20 percent is meaningful.

Think about this: when it comes to physical assets, we have strong models that know at what level these assets are performing and the potential for improvement. We're always improving them. If you're at 80%, you aim for 85%, then 90%. But if you're at 30 or 40, that's a big problem. You want to really focus on it.

We haven't had that for human assets until now. We're building these models that allow us to look at individual flourishing and quantify organizationally what level people are working at. There's a real opportunity to work on quantifiable dollars around the improvement we can generate.

What I also loved is this notion you mentioned thirdly, which is often people don't know where to start. It's a massive elephant problem. Everyone knows it, but nobody calls it out. And often we say, it's their problem or it's the organizational problem. It’s the “What can I do? My manager sucks, our culture sucks, and there's not much that can be done.”

What I love about your work is you're saying it's a whole set of factors. The absence of one does not preclude you from still taking action. So I love your example of the manager.

Share an example, Ali. Think about an organization where at the overall level, it might not have been the ideal situation, but is there a real story you can tell around a team that still managed using some of these specific interventions to improve their flourishing?

Ali Khan: I'll give you quite an emotional example. Just today, if people want to go back into my LinkedIn profile, they'll see a real case in point. This is two examples separately.

I went to an organization and they liked what we offered, but they only had a limited budget, all for mental health. I suggested that the problems might not be solely mental health related, as that was 80 to 90 percent of their human support budget, apart from learning and development.

They had it assigned in that bucket and were going to spend it there. I convinced them to try using it on SHAPE because we included mental health but also covered 120 different data points per person, providing a much broader view.

When we looked at the data and came back, we had quite an emotional conversation. They were focused on classical interventions related to mental health like meditation and EAP, occupational health.

We showed them that 60 percent of their problem was related to their culture. What are you going to do now? They realized they had to use a big chunk of their L&D budget for that. It shows how metrics help an organization really open their mind.

As a second example, last week we presented real results. There was a question we ask: "My business has low levels of toxicity, backstabbing, and malicious gossip." It's a scary question when you think about it. The score was around 30.

I paused, not knowing the founder of the business was listening to the debriefing. His voice came up and said, "I don't want these people in my business." It was a natural reaction for a founder when you see such a score and they knew about it. They had asked people not to engage in counterproductive behaviors.

So, I offered them an alternative approach, which was very pro flourishing. I explained the impact of negative behaviors on colleagues from a human perspective and therefore on clients and long-term performance. We managed to get a nice conversation going where we brought up the aspects of flourishing—kindness, support, caring—these are the aspects of happiness that people really want.

We got them to agree that people come to work to contribute to something bigger than themselves. We found that in the data and ended up honing down on a very interesting and honest conversation. Organizations know these issues, but they don't really have a number for it. When the number's staring them in the face, the conversation changes.

Ashish Kothari: I love both of those examples, Ali. The McKinsey Health Institute research highlights that only 3 percent of burnout is due to individual demands, 97 percent is due to organization, team, and job.

The same story on well-being: 27 percent is individual, and yet all the interventions are individual versus job, team, and organization. Kudos to bringing that right in the instrument where people can see it. Let's go back to the second example. This is always a tricky area because here's how it is. I'm curious how you delve into that story and conversation.

We know that when you invest in employee satisfaction and flourishing, the results and the business case are there. But we also know that it works if you have a 3-4 year plus horizon. This is Alex Edmans’ work.

Toxicity and pressuring people work this quarter. I can be kind and caring, but then I might not meet my quarterly goals, my stock tanks, I'm fired. That's what so many leaders convince themselves about. Part of it is not just convincing themselves, part of it is the reality of quarter-to-quarter performance.

Did you get into that dialogue? Did anybody ask that question? You're talking about caring and kindness, but there's a reason these people are successful, even though they are toxic. We know about them, but they deliver in the short term and everybody's stuck in this quarter-by-quarter cycle.

Ali Khan: Wow, that's a very telling question you're asking. Let me surprise you. What I found is that when you have numbers like this staring you in the face, the first thing that happens is a very different reaction. In this particular example, one of the colleagues on the call said, "I don't recognize what you're saying because it's not what I see."

Ashish Kothari: That's blindness, unawareness. Like, "I don't even recognize this."

Ali Khan: Right, so you get that kind of reaction. The answer to that was quite straightforward. How many people do you work with in your total company that we've looked at? Five. It's that classic case: you are the average of the five people around you.

Your team is probably having a great time, but we also know that there is no such thing as a monoculture anymore. Monocultures are made up of the sum of the microcultures inside an entire business.

You could be in one part of an office living a great life with five people around you, but in another part, a whole bunch of people could be hating it, and nobody knows about it because they're not getting involved. You're blind to it because you can't see it, but the numbers don't lie.

Once they get over the fact that we're just a mirror, and if you deny this, you're worse off than before. When you came to this with an open belief, it's very hard for them to argue that short-term solutions will really work. We don't really get into those conversations.

Will Fleming from Oxford University published a piece of work at the beginning of this year that said well-being doesn't actually work in its current form very much. It's quite scary because a lot of organizations are plowing money into what they call wellbeing services, but they're negligible in their impact.

Ashish Kothari: I've been saying this for the last five years. Ninety-five percent of wellbeing investments that companies make have gone up because we hear all the time, "We're spending a lot of money on wellbeing, of course, this matters, we care." But they're all low ROI. They're individual; you're not fixing the problem.

Ali Khan: The example I like to give involves work being done by Harvard University. We're part of the community of practice, and I'm getting to see information from Tyler and Matt Lee's work. It’s wonderful to see that they're publishing about the concepts of love.

Consider when you're young, and your parents ask you to do something. There are two ways they can do it. One is through screaming and shouting, expecting you to just follow orders. What's the sustainability of that approach?

This concept of well-being in: 2023

Sustainable well-being incorporates core tenets aimed at achieving long-term views. Many organizations are really pushing this. For example, the Wellbuilding Institute is focusing on a longer three-year commitment from organizations towards a much larger and deeper impactful view of helping people in the building, even though they focus on the building itself.

inable well-being starting in: 2024

Ashish Kothari: Let’s delve into that. I also want to reserve some time towards the end to discuss three or four things that often divert people from this path.

There are job pressures, time pressures, lack of prioritization, matrixed organizations, and what we call death by 10,000 different priorities, along with leaders who are ineffective at helping their teams figure it out but just shrug it off as just the way things are. That's really driving some of the stress, anxiety, and feelings of helplessness.

But let's come back to that conversation in a minute. I love your flourishing wheel, the 12 domains, and I want you to share a little about those with our listeners. If people step back and think about flourishing as much more significant than mental health—because many people default to mental health—what are your 12 domains, Ali?

Ali Khan: Thank you so much. When we went to the literature with the question, "What do you look beyond physical and mental health to truly understand a person's ability to perform to their best possible state?" We found the literature was guiding us towards many concepts, but we focused on those based on statistical rigor and significance.

So fundamentally, what are the P values that give us the best predictive value of each of the different topics? We looked at things like job satisfaction, employee commitment, and employee engagement. We considered manager's style, corporate culture, and the business essentials, drawing from your famous work over at McKinsey, the 7S.

We found the 7S is wonderful, but it's even more powerful when you add a couple of other S's. We call it the S10 model. You democratize it, get everybody's view, and find a disparity between the management team's observed view versus the people at the ground level. We've done some amazing band analysis that helps show a whole different picture all of a sudden.

Corporate culture is very difficult to measure, very intangible, but we found something wonderful. Companies like Human Synergistics, known as the Kleenex of measuring culture in the world, have models we looked at, and we found that we could measure to their quality with just 25 questions, what they can do in about 150 questions.

This is called Cronbach's alpha score, for the listeners, so you can look it up. It means that you've got the single prime or the alpha that tells you what typically 10 questions might tell you.

, created by Fred Reichelt in: 2003

We used the same approach to scientifically work out the most powerful questions we got to the 25 there, and then the final two or three. So we've got the physical and the soft work environment. These are everything from noise all the way through to your IT systems, aspects that you physically work with every day.

We measure those two and then not only psychological and physical health, but also what we call life outside of work. You bring your whole self to work, but you're also bringing your baggage with you. We measure the fundamental tenets a person's going to be impacted by in work as a result of what's happening outside of work as well.

We originally had 250 questions, by the way, and through a series of deductions and high-grade measurements, we've now got it down to about 150 factors, which you measure all within a 25-minute survey, making it very powerful.

Ashish Kothari: And you're on your way to further distill it over the coming years to make it smaller. I love a couple of things in your model, and we just took the survey. We're in the process of looking at the results.

What Ali and I are really trying to figure out is a very close collaboration around the Pearl model that I've talked about on this podcast, which is all around factors at the job, team, and organization level that leaders can take action on.

There's a 90 percent overlap with what Ali has; we have a 25-30 question survey, there's 150. So we're mapping it up because I love the platform that Ali has built. It took us 5 minutes to onboard. It took me about 10-15 minutes to go through the questions, partly because I understood the construct of the questions.

But if you're reading it for the first time, it might take longer. We're trying to figure out how to create this view at a team level from the data that once you take it, literally tells you at an individual team what level you are performing at and what is the biggest driver that will help you improve that performance.

A lot to come, that's what Ali and I are so excited about. But what I loved about the domain, number one, several things really stood out for me.

The first one was recognizing, people talk about bringing your whole self, but most people will say they're not interested in what's happening outside or it's not their job to address it, and nobody is looking for someone to address it. But we need to understand it because if somebody's struggling personally, they're not going to show up.

And if you're in that moment, give them the autonomy, the flexibility, even just care, or a listening ear, or a hand on the shoulder to say, "I know it is hard right now and we are here for you." Even further, if you're able to do something to help them, you're going to have someone whose heart you've won for life.

So I love that we're saying, "Hey, let's sense into how our people are doing in life, not just at work." I love that.

The second thing I really liked is how often people underestimate how the lack of systems, a clear strategy, and all the S's, get in the way. The problem isn't just multiple priorities; they're not clear what they need to execute everything.

I have one client who told me, on paper it looks really good when you're really high up. We have five strategic priorities, five pillars, very clear. Within those five pillars, we have seven different sub pillars, and within those seven pillars, we have 25 different sub pillars. So, when you really add it up, we don't have five priorities.

We've got 120 priorities, and any one of them, they're like, I have to solve for sustainability, diversity, supplier diversity, cost, innovation, manufacturing, and quality. And oh, by the way, every day, depending on who I talk to in a cross-functional team, I'm being told this matters more today.

And I love the 7s, the 10s that you've created, because it kind of says, "Hey, as a business system, are people clear?" Because if they're not clear, that's a huge load that you're putting on people.

The third thing, the whole physical and the soft, the hard and the soft, the physical and the software environment, I found to be really interesting. It's really important, but there is such an opportunity also to further shrink that down to find what are some simple ways in which, but it is so right.

We don't explicitly often think about how our work environment is affecting how we are working everything from lighting to what's present in terms of food, is the place structured. We do that in lean manufacturing all day long. 5S is a key lever. Why don't we have a similar level for our work environments and for our software environments, which is as much a part of work environments, physical as software.

I think it's wonderful, friends. I really invite you to go to the website of Shape, look at the 12 domains of Flourishing. It'll have you reflect on your own organization and see, can I really get underneath maximizing what we are getting from all the amazing human beings that are working at our place.

So, Ali, when you looked at these 12 domains, how many people have taken this survey? How many companies, like how much data do you have now around this?

Ali Khan: Okay. So we're still at the early stage through the process of training the product. The questions are not made up by us. When people ask if the questions work, we chuckle because they come from the literature, they're already proven, and we've got the weight of millions of completions out there that we're bringing on board. We've already had a boost beforehand.

What we've done is we've worked hard to refine the way they work with each other. For example, how much does culture contribute to an erosion of mental health predictively? We're starting to unpack those secrets now.

We never really reveal, let me pause and just say, I want to become famous for being the company that says, "We do not kiss and tell." From a promotional perspective, we now have clients who are happy for us to tell the world that they are using SHAPE and we've got some advocacy.

People can see that on the site, but the multi-thousands of people that have completed it, what we can say is absolutely beyond statistical significance. There are values there. We're working with academia now as well, where they would like to study certain topics using SHAPE data.

They're not studying us; they're studying topics using SHAPE's data because we've got a single-hit platform that gives them data in a GDPR compliant, highly private, confidential way. We then give them the analysis they can follow through on, perform further thesis work on top of that, and they can do the publishing as well. So quite a lot all coming together there.

Ashish Kothari: So thousands, hundreds of thousands of people have actually taken Shape, not companies, but individual responses.

Ali Khan: Not hundreds of thousands just yet, but that's absolutely on the pipeline in terms of the size of the organization.

Ashish Kothari: Let's get there, but the bigger point you're making is that you have enough with what you are predicting, what you're saying has statistical significance behind it and is publishable as well. Quality.

Ali Khan: Yes, and publishable as well. Quality.

Ashish Kothari: I love that. So what are you finding overall when you look at the 12 domains, Ali, and let's take a balcony view. Are you finding certain factors that organizations tend to be leading on and certain factors that tend to always be lagging or kind of out of sight, out of mind?

Ali Khan: It is so variable. When we looked at a company in Australia just a few weeks ago in the education sector, the results were wildly different. We're digging into trend lines across the board.

For example, we see trends like females struggling more in life outside of work. In certain industries, we're starting to see men are struggling less, and we're trying to dig deeper into what potential clues might be coming from, because correlation is not causation.

We're looking at what the longitudinal data might lead us to understand what's really happening under the hood, both in the work environment and outside.

The thing that struck me the most at the moment is how Shape is constructed; it really gets under the hood from the perspective of the people in a scientifically validated way. You can't really predict what's going on in that business until you've done the proper survey. It's wildly different.

Ashish Kothari: And when you look at a company, how across teams are you finding the factors to be the same or different?

Ali Khan: You do see similarity in terms of experiences among different types of teams. Our network component allows people to denote, "I work for this person; these people work for me." By building the network nodes, you get a mathematically pure organizational chart validated by every manager and their teams.

It's turning out to be more accurate than the HR systems in the organization. Because of that, we can study the information with much more rigor and depth to really look at what the correlations look like when it comes to some of the core tenets and factors of flourishing.

Ashish Kothari: I love it. So this notion of being able to look at it overall is interesting, but really being able to study it layer by layer, level by level, and finding what is similar organizationally that we can work on, but more importantly, what is team specific that the teams can action, and what are some things that are individual that individuals can action?

Ali Khan: Absolutely. Every person can make a really big difference. We've created a whole new algorithm, which is very unique, around not just focusing on your weakest areas, which is typically what we're told within a lot of surveys. In fact, a lot of measurement systems drive up the weakest scores first.

But what you find is that if you've created a North star called flourishing, the things you might want to do instead are not just about the weakest scores, but across the board, the things that align to give you the best possible chance to flourish.

So we've shifted the focus onto those actions, which are different per person, per team, and for the whole company.

Ashish Kothari: That was the other thing that I found to be really insightful, friends. As you're looking at surveys, as you're studying this problem, let's not focus only on what we are weak at; let's look at what we are good at, which actually increases the probability of success.

In the end, there's only so many things we can focus on at one time. It's important to understand which ones significantly improve the results that we are looking for, and they might be different by a team, individual, and organization.

The invitation again is to take granular approaches to really optimizing our human assets, just as you take granular approaches to optimize store productivity, to study, diagnose manufacturing systems, lines, equipment. We don't do one size fits all. Let's not do one size fits all interventions here as well.

Let's really use the science to understand and choose the right interventions and also enable individuals' autonomy to be able to take actions. We do that in stores, we do that in factories. We're not driving it from the center a year after the survey or six months after the survey with a program that is one size fits all. We really support individuals to be able to pull and deploy.

There's a real breakthrough approach here that can be created using this level of granularity and actionability of data.

Ali Khan: And Ashish, thank you so much for having me. I want to invite everybody to go to shapepowered.com. We have what we call the Book of Flourishing, a very nice gift for everybody.

Simply put your email address in, and immediately you will receive the Book of Flourishing, which is just a three to four minute read going through and understanding the power of what Flourishing can do, what it really means, and where it came from.

Thank you so much again for having me. I am a big fan of your model as well, and I think we will find so much synergy between the two worlds coming together because people cannot achieve flourishing without human support, and the work you're doing is fantastic to help them do that.

Ashish Kothari: Thank you, my friend. As we bring this podcast to a close, I just personally want to ask you, you've been an entrepreneur, starting something from scratch and growing it. What are some of your three to five tips that allow you personally, Ali, to be at your best? What are some things that nourish you and allow you to flourish?

Ali Khan: I have to force myself to really remind myself that pausing, taking a step back is an absolute necessity. I've learned that getting time with my family is actually the thing that you miss the most because you get so used to the daily grind of working.

My real pride and joy is one of my sons who is quite entrepreneurial. He's just picked himself up and moved over to California for six weeks. Saim's moved over; he's just landed in San Francisco.

He's been there a week and is a little homesick. My other son is wonderfully getting involved as a Project Manager within the utility sector here in the UK. My youngest one is just starting her finals at school for her age.

We've got this diversity of different things happening. So, to keep on top of that as well as work gives me plenty of challenge and diversity. And the other thing, friends, people who keep you grounded, who take you back to normality.

Actually, to not have heightened levels of thinking and pontification, as I call it, at all times is quite a nice thing to do. And I've got some pretty good friends. If they're probably listening to this, they'll chuckle because they keep me grounded.

Ashish Kothari: I love it. Friends and family always reminding, setting boundaries, coming back to what matters. My friend, this has been such an amazing conversation. Thank you for the beautiful work we are doing. I'm really excited about what we are collaborating and building together. Have an amazing rest of your day.

Ali Khan: Thank you so much, Ashish, and really looking forward to a deeper collaboration as we go through the next few years. Thank you.