The assumption that growth is a necessity sits at the heart of our society.
- Economic growth, for example, is touted by every Chancellor at every Budget speech as being a key objective.
- A new Chief Executive is appointed within a company. They are set growth targets for turnover and profit. Increase the share price, grow the company.
- A financial planning firm takes on a new client and begins managing their investments. The target? Growth.
The Government recently provided grants for companies to pay for business coaching. The programme was called Growth Accelerator and it targeted those who were projecting 20% p.a. growth. Those companies who had been long established, employed hundreds, had excellent social responsibility policies, produced products and services useful to society but were NOT forecasting growth were not targeted by the Government.
Objectives That Don’t Involve Growth
But is growth always the best target? Are there other ways of setting targets and measuring success that are not related to money?
Take, for example, PADI, the “the world’s leading scuba diver training organisation”. Now, PADI are a private limited company. They derive income, they sell products and services, they make profit.
But financial growth is not necessarily a significant driver for them. For many, if not all, of the staff and owners, a more important driver is maintaining the safety levels of what is an extremely dangerous sport and pastime as it grows in popularity around the world.
Growth With A Purpose
When we create a financial plan for our clients, we first discuss what the future might look like. The aim is not to create a fixed position to aim for, but instead to get a feeling for future objectives and motivations.
It also means that when we come to manage clients’ investments, we can construct portfolios to achieve those client objectives. In this way we can focus on how much risk the portfolio needs to take, rather than asking the client how much risk they want to take (which is a rather meaningless question).
The investment growth required (or not) has a purpose – the future financial wellbeing of the client.
The Growth of Happiness
Financial advice used to be all about investments, pensions and tax. The work of financial planners is to get the focus of our clients onto what makes them happy, and then structure the investments and pensions to get there. This change in focus is also taking place in the public sector and workplace.
Happy City was established to move the focus of decision making – at everything from an individual level to public policy – away from purely economic indicators, and to focus instead on happiness which is why we felt it was important to get involved with Happy City.
There are a plethora of indicators already available to councils and Government, and Happy City have undertaken extensive academic research to produce their Happy City Index. This gives policy makers in local councils a real insight into how well they are creating the right conditions for happiness across various sectors, and enables them to focus policy making accordingly.
Not only that, it means they can measure the Index again at a later date in order to demonstrate the effectiveness of their policies.
Happy City have now developed a similar tool in the workplace, the Happiness Pulse, which is a natural compliment to our approach at Ovation. Here, we run financial wellbeing workshops for groups of employees, and this new assessment tool for employers and HR departments enables companies to help create their wellbeing plans as well as prove the difference they have made.
The old saying that money can’t buy you happiness clearly is not true. Just ask someone who has received a bonus from work which means they can go on holiday.
There comes a point, however, where more money doesn’t bring more happiness. This is true whether it relates to economic growth, profit from a business or personal wealth. Growth certainly has a place, but that place should not be at the heart of decision making.
There is a real change taking place in society and business to recognise this change in focus, a recognition that we need to focus on what makes us happier, not just wealthier.