Four Leadership Lessons From The World’s Happiest Countries

Every year, the World Happiness Report ranks the world’s happiest countries, based on responses to the Gallup World Poll. In 2024, Finland topped the rankings for the seventh consecutive year, with all the other Nordic countries featuring in the top 10. Other high performers included the Netherlands and Switzerland. Given that work takes up a major part of many adults’ lives prior to retirement, we can assume that management approaches in these nations contribute to their citizens’ happiness.

So, what can leaders learn from the world’s happiest countries?

1. Low power distance fosters wellbeing

“Traditionally, Finnish organizations have low power distance between their leaders and the rest of the organization,” says Sami Itani, professor of practice for the department of management studies at Aalto University School of Business in Finland. “Anybody can approach the CEO, even in large organizations.”

Itani believes that the Finnish workforce culture reflects the country’s society more broadly since levels of socio-economic polarization in Finland are among the lowest of all the countries that belong to the Organisation for Economic Co-operation and Development. “When business leaders have a shared social background with their employees, it makes their organizations socially more united and generates trust between the leaders and their internal and external stakeholders,” he says.

Transparency is also prized in Finnish society, with all annual incomes being public information. As a result, there is little gender difference in terms of salaries for people doing a similar job.

“Another aspect of general happiness for us is a balance between work and free time, which managers not only understand and respect, but also use themselves,” Itani explains. “Despite the possibilities for remote and flexible work in most professions, the evenings and weekends are for friends and family.”

2. Empower remote workers

In the Netherlands, which ranked sixth on this year’s happiness index, more than half (52%) of workers work from home for some or most of the time. This is a higher proportion than in any other EU country.

Hybrid working fits the Dutch national culture, according to Dr Pascale Peters, professor of HR management at Nyenrode Business University in the Netherlands. A study by Peters and her colleagues, commissioned by the Zadelhoff Nyenrode Institute for Real Estate Research, found that workers value hybrid working because it allows them to balance their work and non-work obligations while maintaining or even improving their productivity.

Nevertheless, the study revealed that while employees like flexibility, this factor is not the primary source of their workplace happiness. They also value the psychological safety provided by a physical office, having autonomy and the ability to share knowledge, and leaders who demonstrate an empowering management style (signaling trust and providing support where necessary). “All these factors can contribute to employees’ perception of self-determination, which in turn can contribute to their autonomous motivation to be proactive and innovative,” Peters says.

3. Provide psychologically satisfying work

“We know that having a psychologically satisfying job is key for overall happiness,” says Mads Nordmo Arnestad, associate professor of the department of leadership and organizational behavior at BI Norwegian Business School in Norway (the country ranked seventh on the index). “After all, we spend most of our waking hours at work. The Norwegian management culture favors trust and empowerment, allowing employees to experience a high level of autonomy. This autonomy has also been tied to intrinsic motivation, lower levels of stress and increased productivity.”

Arnestad adds that while autonomy and task variety are key to worker satisfaction, a job still has to pay. He says that in Scandinavian countries, low-paying jobs are awarded higher wages than in other countries. “A big part of the Scandinavian success story is adequately paying employees so that they are able to focus on their tasks and not constantly having to worry about their personal finances,” Arnestad explains.

4. Build consensus

In Switzerland (ranked ninth on the index) consensus underpins the national management style. Managers proactively seek out the opinion of others before coming to important conclusions – a process that is thorough, even if it has the drawback of being slow.

“For any managerial decision to be made, this decision has to be perceived as positive for the whole team or even the whole organization,” says Dr Jean-Philippe Bonardi, a professor at Swiss business school HEC Lausanne and board member of QTEM (Quantitative Techniques for Economics and Management) network. “This is why the process of consensus building, in which many people are involved, is so important for key decisions.”

Nevertheless, their focus on building consensus doesn’t stop the Swiss from being pragmatic. “The final decision is taken at the top once the process of consensus building has taken place,” Bonardi explains. “This is certainly one of the strengths of the Swiss managerial style and something that I think is closely related to happiness as it avoids two typical types of frustration: not being consulted and no decision made in the end.”

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