31-Jan-12
GNH
IN
BUSINESS
Acknowledgements
The GNH in Business project and this report have only been possible due to the input, guidance and support of many
visionary people from Bhutan and internationally. A heart-felt thank you to all of the following individuals for their
contribution, patience and willingness to be pioneers on a journey that is only just beginning. Apologies to anyone who
may have been omitted from the acknowledgements unintentionally.
Bhutan:
•
Lyonpo Dr Pema Gyamtsho, Minister for Agriculture, Forests & Environment, RGoB for his encouragement and
continued support for the case study companies to undertake this project;
•
Dasho Ugyen Rinzin, Chairman, Yangphel for his enlightened leadership;
•
Brent Hyde, General Manager, Hotel Zhiwa Ling for his tireless energy and enthusiasm for implementing the
GNH in Business model within the hotel operations;
•
Karma Lotey, CEO, Yangphel for his commitment to ‘greening’ the business;
•
Karma Choden, Managing Director, Yangphel Adventure Travel for her positive attitude and continued support
for the project;
•
Sonam Peldon, GNH Task Force Leader at Hotel Zhiwa Ling for her trust in the process;
•
Khemraj Gurung, GNH Task Force Leader at Yangphel for his hands-on involvement;
•
GNH Task Force members at Hotel Zhiwa Ling: Dhurba, Somnath, Narayan, Passang, Purna, Phub Lhamo,
Gelmo, Aum Sonam, Rinzin Lhamo, Sonam Deki, Bhim for their patience;
•
GNH Task Force members at Yangphel: Sonam Pelden, Chimi, Nawang Choden, Drowa, Novin, Rita, Sonam
Chogyel, Deki, Yeshey, Phub Gyem, Kunezang, Pelden for their honesty;
•
Dasho Karma Ura and the staff at the Centre for Bhutan Studies for their willingness to support a private
sector initiative.
Internationally:
•
Richard Boele, Director, Banarra Sustainability Consultancy, Sydney, Australia for his guidance in the right
direction to begin the project;
•
Nicolette Boele, Principal Climate Change, Banarra Sustainability Consultancy, Sydney, Australia for listening
and supporting whenever there was a challenge;
•
Maryanne Cantwell, Carbon Management Consultant, Djakiri Consulting, Maitland, Australia for her diligence in
preparing the carbon footprint calculations for Hotel Zhiwa Ling and Yangphel;
•
Simon McArthur, Economic Development Manager, Newcastle Council, Australia for his advice on structuring
the vision, mission and core values workshop;
•
Jonathan Strauss, SEED Consulting, Sydney, Australia for preparing the Carbon Response Management plan for
Hotel Zhiwa Ling;
•
Joanne Davies, Conservation Volunteers Australia for her support and materials on Leadership and Change
Management;
•
Silvio Calabi, Mentor and Editor, Main, USA for being an inspiring mentor on a creative journey;
•
Paul Rogers, Tourism Consultant, Lennox Head, Australia for reviewing the draft document and providing
valuable feedback.
About the Author
With more than 20 years experience in blending the fields of environment, business and well-being, Isabel Sebastian
has been working on a uniquely integrated approach to sustainable business. She has lived in Germany, Australia, India,
Tajikistan and Bhutan and worked with a wide range of organisations including private companies, governments and
NGOs, such as travel & tour operators; airlines; tourism industry associations; local, regional and national tourism
organisations; protected area management agencies; hotels and resorts; development agencies and as a Director of her
own consulting firm. Her expertise in guiding organisations on the journey of sustainable business, project and people
development have brought her to Bhutan to embark on this GNH in Business project. Isabel has been living and working
in Bhutan for almost 6 years. Isabel is also a member of the Prime Minister's Advisory Committee in the program
development for Bhutan’s first GNH Centre.
Copyright © 2012 Isabel Sebastian. All rights reserved. Permission granted to reproduce for personal and educational use only with acknowledgement of
the author. Commercial copying, hiring, lending is prohibited.
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
2
GNH
31-Jan-12
IN
BUSINESS
Dedication
This work is dedicated to one of Bhutan’s greatest Saints, Drukpa Kuenly who was and still is revered today
for his unconventional wisdom, poetry and ways. One of his sayings seems fitting here:
"If you think I have revealed any secrets, I apologise;
If you think this a medley of nonsense, enjoy it!"
Abbreviations
ABTO
CBS
GAB
GNH
HAB
MICE
RGoB
TCB
YAT
ZL
–
-
Association of Bhutanese Tour Operators
Centre for Bhutan Studies
Guides Association of Bhutan
Gross National Happiness
Hotels Association of Bhutan
Meetings, Incentives, Conferences and Events
Royal Government of Bhutan
Tourism Council of Bhutan
Yangphel Adventure Travel
Hotel Zhiwa Ling
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
3
31-Jan-12
GNH
IN
BUSINESS
Table of contents
Acknowledgements ........................................................................................................... 2
About the Author ............................................................................................................. 2
Dedication ..................................................................................................................... 3
Abbreviations ................................................................................................................. 3
Table of contents ......................................................................... Error! Bookmark not defined.
Introduction ................................................................................................................... 5
PART 1 – EXECUTIVE SUMMARY AND THE CONCEPT OF GNH IN BUSINESS ....................................... 5
1.
Executive Summary .................................................................................................... 5
2.
Premise for the project – The story of why? ........................................................................ 7
3.
Economic development in Bhutan .................................................................................... 7
3.1 The private sector in Bhutan ...................................................................................... 9
3.2 The tourism sector in Bhutan ..................................................................................... 9
3.3 The case study companies at a glance ......................................................................... 10
3.3.1 Yangphel Adventure Travel (YAT) .......................................................................... 10
3.3.2 Hotel Zhiwa Ling .............................................................................................. 10
4.
About Gross National Happiness (GNH) ............................................................................ 11
4.1 Happiness – defined and measured ............................................................................. 12
4.2 ‘GNH in Business’ .................................................................................................. 13
4.3 What makes ‘GNH in Business’ different from other sustainable business models? ..................... 16
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
4
31-Jan-12
GNH
IN
BUSINESS
Introduction
This draft report presents the case study of a pioneering project taking place in the Kingdom of Bhutan.
Part 1 summarises the key points from the case study and describes the broad concept of a GNH in Business
model. This section of the report will mostly be of interest to business, industry and government leaders
who recognise the need for a new paradigm in the way business is practiced around the world. The concept
is based on Bhutan’s vision of Gross National Happiness and has the potential to be developed further and
to be applied worldwide.
For those interested to delve further, Part 2 explains the real ‘nuts and bolts’ of the GNH in Business
program as applied to the two case study companies in Bhutan. It presents in detail the process,
achievements, indicators, benchmarks and challenges that Yangphel Adventure Travel and Hotel Zhiwa Ling
experienced during year one of the three-year implementation program. Part 3 of the report draws
conclusions and highlights opportunities that drive this process forward to develop a showcase business
model of international significance. Part 4 includes Appendices with additional detailed workings and
results from the GNH in Business program as applied to the two case study companies.
PART 1 – EXECUTIVE SUMMARY AND THE CONCEPT OF
GNH IN BUSINESS
1.
Executive Summary
This report covers the philosophy and approach of a daring undertaking to develop a sustainable business
model and program based on Bhutan’s development philosophy of Gross National Happiness (GNH). The
term GNH was coined by His Majesty the 4th King of Bhutan some 35 years ago to emphasize the importance
of ‘happiness’ as a measure a society’s progress rather than just measuring a nation’s Gross Domestic
Product (GDP). Since then, Bhutan has developed an extensive system for measuring its people’s happiness,
for guiding government decision-making to favor decisions that will increase rather than decrease the GNH
index of the nation and for infusing the entire education system with GNH principles, values and actions.
Private business is now the obvious next sector to apply GNH principles and behaviors in its business
dealings with all its stakeholders and environments. Karma Tshiteem, Secretary of the GNH Commission
highlighted at the recent ‘Happiness & Economic Development’ conference held in Thimphu in August 2011
that “It is an urgent need that we engage the profit-driven business sector, and that we make the GNH
discussion relevant to this sector. Otherwise, we’ll have a very powerful force working against us.”
At the time of Karma Tshiteem’s statement, two of Bhutan’s more innovative tourism companies, Yanpghel
Adventure Travel and Hotel Zhiwa Ling, had already embarked on a GNH in Business project. This project is
the first initiative in Bhutan by the private sector to incorporate GNH values and ways of doing business in a
systematic approach.
In essence a GNH in Business program offers a tool to bring sane and responsible behaviors into the business
sector, which are driven by a genuine intention among the leadership of a business. A GNH Business is
nothing less than a powerful change agent within its communities with a genuine commitment to serve
others, rather than only it and has an unwavering commitment to sufficiency. These companies are able to
answer clearly and confidently three key questions: 1) What is enough profit for the owners and/or
shareholders?; 2) What do we do with the rest?; and 3) How do we spend the rest to increase genuine
happiness among our stakeholders?. This is of course not for the faint-of-heart and will only work for
companies that recognize that they have a responsibility and a part to play in finding solutions to the
current world economic crisis, environmental crisis and crisis of humanity. Therefore it is inevitable that
the discussion of sufficiency starts entering boardrooms all across the world. Business leaders who engage
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
5
31-Jan-12
GNH
IN
BUSINESS
with this topic in a swift, constructive and creative way will be leading the way to a new business paradigm
that is desperately needed sooner rather than later.
As part of this project a preliminary four-part GNH in Business model was proposed to the case study
companies. It incorporates everything that a Corporate Social Responsibility (CSR) program would do, plus
two important additional components. Firstly, a GNH business not only requires a company to do things
better in its relationships with external and internal stakeholders, with their environment and communities
– it also requires each individual within a business to become a more evolved human being that can
experience and share true and lasting happiness. This means that the key element of GNH that is not
normally addressed in CSR programs is a recognition that a transformation is required on an individual level
by all the people that make up a business starting from the owners/shareholders to management and
general staff. Secondly, the transformation that GNH in Business is looking to achieve is an increased
awareness of sufficiency, combined with a sense of empowerment that ultimately leads to powerful and
positive actions that balance profit-making with serving others.
The proposed four-part GNH in Business model includes a focus on: 1. Greening the business; 2. Driving
community vitality; 3. Evolving individual’s humanity; and 4. Doing business ethically & sufficiently. For the
case study companies the focus for the first year (2011) of the GNH in Business program was to build
awareness and understanding within Yangphel and Hotel Zhiwa Ling of GNH values and behaviors,
environmental impacts and monitoring of the company’s environmental indicators in waste, water and
energy. Since no previous sustainability indicators or benchmarks have been developed specifically for
Bhutan’s tourism sector, the case study findings presented in Part 2 of this case study report will be useful
in providing a basis for environmental benchmarks for the Bhutan’s tourism industry. This case study also
provides a basis for showing how GNH can be used as a tool in a business context.
In brief, the three-year GNH in Business program developed for Yangphel and Hotel Zhiwa Ling incorporates
the following stages:
•
Year 1 - Education and awareness raising within the company:
- of GNH philosophy, thinking, values and behavior to help staff and management understand how
these principles become part of business and can play a positive role; and
- of environmental and business conduct activities in the ‘Greening the Business’ and ‘Conducting
Business ethically & sufficiently’.
•
Year 2 – Implementation of initiatives that lead to transformation through:
- GNH experiential learning programs for all stakeholders about living, communicating and making
decisions in a GNH way;
- Ongoing monitoring of GNH indices among stakeholders and continued tailoring of the experiential
learning programs; and
- Engage in a process of sufficiency discussion and debate among the leaders in a business and set
sufficiency targets for the company.
•
Year 3 - Implementation and monitoring of initiatives that demonstrate lasting transformation
through:
- Sharing lessons learned through GNH in Business leadership programs;
- Broadening the reach to a wider circle of stakeholders; and
- Declaring sufficiency targets and spending excess profits on initiatives that will increase
community vitality and GNH indices of the stakeholder groups.
As for the case study companies, key results produced by Yangphel and Hotel Zhiwa Ling in year 1 (2011)
include:
•
•
•
•
130 training hours delivered to 471 participants on GNH philosophy and conduct as well as
environmental awareness and monitoring;
110 staff completed the GNH National Survey (analysis of results still in progress);
Environmental monitoring system implemented for waste, water and energy consumption;
Reductions in consumption in 2011 purely due to the implementation of education and awareness
raising on resource consumption resulted in:
- 6.45% reduction in energy consumption at Zhiwa Ling;
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
6
31-Jan-12
-
GNH
IN
BUSINESS
15% reduction of waste produced at Zhiwa Ling;
98% of waste is now recycled at Zhiwa Ling;
14% reduction in fuel consumption at Yangphel Adventure Travel; and
13 % reduction of per guest night carbon footprint at Hotel Zhiwa Ling.
While there are distinct advantages of developing a GNH in Business model and program within a specific
company, this approach constrains the ability to develop a comprehensive model and transferable model to
apply more widely across the private sector. It is therefore recommended that a public-private cooperative
project be developed, involving the Bhutanese government, donor agencies and the private sector to
further shape and define a transferrable GNH in Business model for Bhutan’s broader business community.
The work undertaken during year 1 of this study presents the opportunity to develop a functioning model of
GNH in Business through public-private cooperation. The result would be a GNH in Business program for
Bhutan to showcase and apply locally as well as export to the world.
2.
Premise for the project – The story of why?
Yangphel Adventure Travel and Hotel Zhiwa Ling first proposed a project of ‘greening’ their businesses
through their Senior Management and owners of the companies in early 2010. As a result of ensuing
discussions a proposal for developing a sustainability program for both companies was refined throughout
2010. The inclusion and integration of GNH as a key component in the companies’ sustainability efforts was
established within the final project proposal. Formal work on the project commenced with the engagement
of a full-time Sustainability Advisor from November 2010.
The process of shaping the companies’ Sustainable Business Program into a GNH in Business program
evolved throughout the first six months of the project in early 2011 and was to be implemented within the
case study companies over a three-year period. The premise for the project therefore changed from a mere
implementation of a ‘Sustainable Business Program’ with a focus on ‘greening’ initiatives, to the
development of a more holistic business concept that needed to demonstrate how GNH can be practiced in
action in the day-to-day activities of private sector companies.
While the case study companies are both from the tourism sector in Bhutan, the foundations that were
developed during year 1 of the program will be able to be applied to any industry sector anywhere in the
world. This case study report outlines the process, results, challenges, evaluation and next steps of the
GNH in Business program.
3.
Economic development in Bhutan
For a better understanding of the context of this case study is taking place, it is essential to gain some
insight into Bhutan’s current socio-economic development situation, the size and make-up of its private
sector and particularly the tourism sector.
As a landlocked nation between the world’s two most populated countries, China and India, Bhutan is a
country that seems small and insignificant economically and politically. However, its perspective on
economic development and growth have set this constitutional monarchy apart from its giant neighbors and
the rest of the world. Bhutan’s pioneering development philosophy of prioritizing ‘Gross National
Happiness’ (GNH) above GNP was the vision proclaimed by the 4th King of Bhutan some 35 years ago.
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
7
31-Jan-12
GNH
IN
BUSINESS
In this context, the following statement from one of Bhutan’s National Human Development Report’s makes
perfect sense: “Economic growth has never been regarded in the Bhutanese development philosophy as an
end in itself nor viewed as a panacea to the holistic socio-economic progress of the country and well-being
of its people. It is nevertheless deemed essential for furthering human development progress and for
attaining GNH, the ultimate goal of the development process in Bhutan.” 1
Even with the GNH philosophy as a backdrop, economic development in Bhutan has been rapid since the
country opened up to the outside world in the 1960’s. Its far-reaching development strategies have been
guided through the implementation of a sequence of ‘Five-Year Plans’, with the current 10th Plan being
implemented from 2008 to 2013. The current Plan’s overall objective is to reduce poverty from 23.2
percent in 2007 to 15 percent by 2012-13. 2
Bhutan’s population of about 700,000 people is spread across the mostly mountainous Himalayan Kingdom
with almost 65% of Bhutanese living in rural or remote areas and 35% in urban areas.3 Rural-urban
migration is one of the highest in South-Asia and a major issue facing Bhutan with an expected growth rate
of urban areas by 6% p.a.1 In addition, annual population growth is decreasing rapidly from 2.9 % per year in
2000 to 1.5 % in 2009.3 These trends combined may have a devastating impact on the rural areas of Bhutan
with a large proportion of young people leaving for employment in urban areas and the elderly population
being left to continue agricultural activities.
With an annual GDP of US $1,584 million in 2010 4 and an average GDP growth rate of 8.2% over the last
five years, Bhutan is considered one of the smallest economies in the world. Bhutan is also classified by the
United Nations as one of the 48 ‘Least Developed Countries’ in the world5, with an estimated 23.2% of the
population living below the national income poverty line of BTN 1,100 (or US $24 a month) in 2007. 3
Income poverty remains predominantly a rural phenomenon with nearly all the poor (98 per cent) residing
in the rural areas.4
In 2010, the highest contributions to Bhutan’s GDP 4 came from hydropower electricity sold to India
(17.6%), followed by agriculture (16.8%), construction (14.2%) and tourism (approximately 6%).3
The current unemployment rate is quoted as 2.5 % of the active population, however unemployment in the
age group of 20 – 24 year olds has increased from 4% in 2004 to and alarming 10.4% in 2010.6 This trend is
likely to continue as an increasing number of young Bhutanese complete tertiary studies in the coming
years and seek professional jobs. 3
In 2008, Bhutan’s exports totalled to $513 million to countries such as India, Bangladesh and to a lesser
extent Italy being Bhutan’s largest trading partners. Imports increased by 66% from 2006 to 2008 and stood
at $533 million, indicating a large rise in consumption levels within Bhutan. Bhutan’s main import partners
were India (63%), Japan (12.3%) and China (5.1%) in 2008.6 Cars, crude oil, rice and machines were among
the top 10 imports of 2007. The top 10 exports of the year included electricity, IT software, ferro-silicon,
1
Royal Government of Bhutan, Bhutan National Human Development Report, 2005, Thimphu, Bhutan
(www.worldbank.org/bt), sighted 26 December 2011
3
Royal Government of Bhutan, Draft - Diagnostic Trade Integration Study, Thimphu, Oct 2011
4
National Statistics Bureau, Royal Government of Bhutan, National Accounts Statistics 2010, September
2011, Thimphu Bhutan
5
(http://visit.un.org/wcm/content/site/ldc/home/Background/quick_facts) sighted 17 December 2011
6
Economy Watch, Bhutan Trade, Export & Import, from
http://www.economywatch.com/world_economy/bhutan/export-import.html , sighted 27 December 2011
2
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
8
31-Jan-12
GNH
IN
BUSINESS
stranded wires and cables, vegetable fats and oils. Bhutan traded with 54 countries, imported from 46 and
exported to 36.7
3.1
The private sector in Bhutan
It is also important to realize that the size and significance of the private sector in Bhutan is still very
small. However, the private sector has been growing significantly, with the total number of industrial
companies growing from some 17,200 firms in 2005 to over 30,000 establishments in 2009.8 Almost 99% of
firms (excluding contractors) are micro and small-scale businesses, with the largest proportion of all
businesses being located in Thimphu (34.6%) followed by Phuenstholing/Chuka (13.9%) and Paro (7%).6
These figures indicate the importance and predominance of micro and small business enterprises in Bhutan.
3.2
The tourism sector in Bhutan
The hotel and restaurant sector was virtually non-existent until the early 90s, however has grown steadily,
from 0.18 % of real GDP in 1990 to 6 % of real GDP in 2010.3 The tourism industry in Bhutan first took shape
in 1974 and was government controlled until the early nineties. Since the privatization of the industry, the
industry has now grown to consist of 676 registered local tour operators in 2010, which was an increase of
8.68% compared to 2009.9 However, of the total registered tour operators, only 318 local tour operators
were actually operational in 2010. In addition, 119 accommodation providers are registered under the
Tourism Council of Bhutan’s rating system including 91 hotels, 24 Guest Houses and 4 Serviced Apartments.7
These accommodation providers supply a total of 2,454 hotel rooms with a capacity of 4,868 beds every
night of the year.
Meanwhile, tourist arrivals and the volume of tourism in Bhutan are extremely small, compared to world
standards. This is largely a result of Bhutan’s tourism policy of ‘High value, low volume tourism’ over the
past 20 years, which has been enforced through the requirement of a minimum daily spend of US $200 per
person for international tourists. Between $65 to $95 of this daily spend goes directly to the government as
a royalty fee. This policy has for many years ensured that arrival numbers and the industry have been
growing at a very slow and sustainable pace, with a mere 7,756 of international tourist arrivals to Bhutan in
the year 2000 which has now increased to 27,196 arrivals in 2010.9 In 2010, there were an additional 13,677
regional tourist, business travellers, MICE and Familiarisation trip arrivals who do not fall under the
minimum daily spend or royalty fee paying rule of Bhutan’s tourism policy, therefore contributing
significantly less to Bhutan’s economy. The majority of all international tourists arrive during 6 months of
the year, which are considered the high season to witness the cultural festivals during the months of March
to May and September to November every year. The main tourism destinations are Paro, Thimphu,
Punakha, Phobjikha and Bumthang and the main purpose for visiting Bhutan for 90% 9 of visitors is to see
the living culture and colorful festivals of Bhutan.
The tourism industry is fairly well organized through a very active Association of Bhutanese Tour Operators
(ABTO), the Guides Association of Bhutan (GAB) as well as the Hotel Association of Bhutan (HAB). In 2008,
the Government embarked on the ‘Accelerating Bhutan’s Economic Development’ (ABSD) project, which
identified tourism as a priority sector to assist economic development and employment generation
especially for young people in the age groups of 20 to 24 years of age. As part of this project a target of
100,000 tourist arrivals was set to be achieved by 2013. This target includes all types of tourists such as
7
Pasang Dorji, Bhutan’s import-export matrix, Bhutan Times from
http://www.bhutantimes.bt/index.php?option=com_content&task=view&id=865&Itemid=1, sighted 27
December 2011
8
National Statistics Bureau, Royal Government of Bhutan, Statistical Yearbook of Bhutan 2010, November
2010, Thimphu, Bhutan
9
Tourism Council of Bhutan, Bhutan Tourism Monitor – 2010, published in 2011, Thimphu, Bhutan
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
9
31-Jan-12
GNH
IN
BUSINESS
international tourists, regional tourists, business travel, MICE and Familiarisations trip arrivals.
Furthermore, many initiatives were identified to develop and enhance the spread of tourism’s economic
and employment benefits to the more remote regions of Bhutan. The results of these initiatives are yet to
be seen and evaluated.
3.3
The case study companies at a glance
3.3.1 Yangphel Adventure Travel (YAT)
Yangphel Adventure Travel was first established in 1988 and soon became the travel company of choice in
Bhutan to work with organizations such as Geographic Expeditions from the USA and Abercrombie & Kent
from the UK. The company employs a total of 47 staff including 15 permanent guides, 7 freelance casual
guides, 10 drivers, 13 staff in the travel and administration division, a Managing Director and a CEO. The
CEO is also responsible for the parent company Yangphel PTY Ltd that was established as a corporate entity
in January 2011. The company offers mostly customized trips within Bhutan with an average group size of
up to 15 passengers at a time. Some 40% of the business is generated from the US, 35% from Europe, India
and Nepal and the remaining 25% of business is from direct enquiries from all over the world. The company
offers touring itineraries, trekking journeys and also specialized trips like birding, biking and study tours
throughout Bhutan on a year-round basis. The company owns its own fleet of coaster buses (7 vehicles) as
well as three luxury people movers for small groups up to 4 passengers. Yangphel Adventure Travel was
ranked number 4 of all the active tour operators in Bhutan in 2010 with 3.98% of the total market share
catering for 1,082 visitors during 2010 (Bhutan Tourism Monitor, 2010).
Some of the 47 staff of Yangphel
Adventure Travel during a rafting trip
in Punakha, in July 2011
3.3.2 Hotel Zhiwa Ling
The parent company Yangphel, which is a 100% Bhutanese-owned company, built and opened Hotel Zhiwa
Ling in Paro in 2006 as the first and only 5-star resort in Bhutan that is fully Bhutanese owned and
operated. The hotel offers 45 rooms spread across a garden property of 10 acres, which includes an
impressive main building that is built in the tradition of a Bhutanese Dzong (Fortress) with intricate
carvings and paintings that decorate the 3-level atrium of the lobby. Hotel Zhiwa Ling was the first hotel in
Bhutan to be fitted with under-floor heating throughout, to provide a comfortable stay for its guest during
the winter months.
Hotel Zhiwa Ling currently employs 92 Bhutanese staff and one expat as General Manager. All of the staff
are under full-time employment of which 38 are women. There are a total of eight managerial positions of
which seven are held by Bhutanese, and four of these managerial positions are held by women.
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
10
GNH
31-Jan-12
IN
BUSINESS
Hotel Zhiwa Ling market share is increasing and in 2010 the hotel achieved 10th rank among all of the
resorts and hotels in Bhutan. Hotel Zhiwa Ling had 4,810 bed nights occupied in 2010, capturing a market
share of 2.32% of all bed nights sold in Bhutan.9 Occupancy levels have been increasing steadily since the
opening of the hotel with 2011 being the most successful year so far with an annual occupancy of 43% (up
from 35% in 2010).
Some of the 92 staff in the lobby
at Hotel Zhiwa Ling’s 6th birthday
party in November 2011
4.
About Gross National Happiness (GNH)
Gross National Happiness has been the development philosophy of Bhutan ever since His Majesty the 4th
King some 35 years ago coined the term ‘Gross National Happiness’ (GNH) as a remedy to the fixation by
the rest of the world on Gross National Product (GNP). His Majesty understood all those years ago before
any other leaders in the world, that measuring GNP alone was not enough to create a happy and
sustainable society. The United Nations (UN) recently recognized the significance of this visionary approach
in July 2011, when the General Assembly unanimously adopted ‘Happiness’ as the 9th Millennium
Development Goal.
As a first step to measuring the levels of happiness among Bhutanese society, a GNH survey was first
developed and conducted in 2007 and recently repeated in 2010. For the purpose of measuring the GNH
Index of Bhutan, the country’s GNH values that contribute to happiness of Bhutanese society were defined
in 9 domains:
1.Living standard
2.Good Governance
3.Education
4.Health
5.Ecology
6.Community vitality
7.Time use and balance
8.Cultural diversity
9.Psychological wellbeing
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
11
31-Jan-12
GNH
IN
BUSINESS
The GNH index of overall happiness levels of the population in Bhutan has increased from 0.622 in 2007 to
0.743 in 2010. The index ranges from 0 to 1 with the higher numbers reflecting a higher GNH Index.10
While there are many advocates and avid supporters to further develop Bhutan along GNH principles, there
are also many critics who are asking “What’s in it for us?”. At a recent conference held in Thimphu, Bhutan
during August 2011, Karma Tshiteem, Secretary of the GNH Commission highlighted that: “One way of
getting people to accept GNH would be to conduct, collect, and provide more scientific research that
supports the arguments of GNH advocates. It is urgent that we engage the profit-driven business sector,
and that we make the GNH discussion relevant to this sector. Otherwise, we’ll have a very powerful force
working against us.”
GNH is intended to exist outside of the realms of politics, economics or religious systems. GNH is in its own
right a philosophy that seeks to reclaim sane and responsible values and behaviors for the benefit of
humanity at large. GNH therefore offers a tool for humankind to take charge of its destiny towards
humanity at its best, irrespective of the economic, political or religious systems that currently direct the
world.
4.1
Happiness – defined and measured
For the purpose of the GNH in Business program it is important to be clear on a definition of ‘Happiness’,
which is referred to throughout this process and program.
The Prime Minister of Bhutan, Lyonchhoen Jigmi Y. Thinley, defines happiness in the context of GNH as
follows: “We know that true abiding happiness cannot exist while others suffer, and comes only from
serving others, living in harmony with nature and realising our innate wisdom and the true and brilliant
nature of our own minds.” This means that the sooner we can accept that true happiness is entirely
dependent on our own actions, words and thoughts the sooner we will be able to start on the journey of
GNH. True happiness depends on our ability to help end others’ suffering. It depends on our deep respect
for our environment and community as if they were a part of ourselves. Most importantly, true happiness
depends on our ability to learn to transform our tendencies toward greed, isolation, separateness and lack
of awareness to generosity, compassion, patience and respect for the interconnectedness and
interdependence of life.
As a way to measure and monitor this kind of happiness over time, the Centre for Bhutan Studies has
developed a GNH index that measures the conditions and satisfaction of the Bhutanese people in nine
specific aspects of life - the nine domains as listed above in section 4.
This same GNH index is used for the case studies companies as the ultimate indicator of levels of happiness
among Bhutanese society. The GNH index therefore gives an indication of the satisfaction levels of
Bhutanese society across all of the nine domains that make up ‘Happiness’ in Bhutan.
In addition, GNH being a philosophy that originates in Bhutan, it is also important to consider a definition of
‘Happiness’ as seen from a Buddhist perspective that may assist in painting a bigger and more esoteric
picture.
Individual happiness is a state of being - being at ease, being deeply satisfied and being highly aware. This
10
Centre for Bhutan Studies website, http://www.grossnationalhappiness.com/articles/ sighted 23 Jan
2012
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
12
31-Jan-12
GNH
IN
BUSINESS
state can never be affected by positive or negative events or emotions. This state of being comes with a
sense of connectedness, continuity and endurance. It is never temporary or erratic. It is never derived from
gratification of purely sensual desires or materialistic wants as these lead to the delusion of a separate
self. “The more one wants, the more one gets, and the more one gets the better one gets at wanting, and
so we become stuck in a seemingly never-ending spiral of want-it, get-it, want-some-more, get-some-more
and so on. All of this wanting and getting has a built-in frustration factor that only grows with each
repetition and not having satisfied all of our wants sufficiently, we experience dissatisfaction, a feeling of
incompleteness and isolation.” 11 Therefore, the kind of happiness that is possible from a Buddhist
perspective, can only be achieved by learning to transform greed, jealousy and anger to compassion,
generosity, patience, clarity and wisdom.
The implication of these views of happiness for any company that is committed to a GNH in Business
program in Bhutan, means that the company needs to be aligned with helping to increase the satisfaction
levels of Bhutanese society in all of the aspects of the nine GNH domains. It also implies that temporary
pleasures derived from satisfying material wants can never be mistaken as true happiness even though they
may increase living standards and quality of life.
In this context it is also important to note that much research has been published over the past 15 years,
which shows that increasing levels of income correlate to increasing levels of happiness — but only up to a
certain point. After that point, even exponential growth in income and wealth does not produce higher
levels of happiness. It seems that the happiness curve in relation to wealth generation flattens out.
In the developed nations, more people than ever before have a comfortable living standard that is based on
ever-increasing consumerism, which seems to be the only way our current economic models can survive.
Since the developed nations appear to have reached a saturation point, economists are now focusing on
elevating the consumption levels, or ability to consume, of the poor. Naturally, we need to move as many
people as possible above the poverty line, to let everyone reach the “happiness plateau” of relative
affluence. But here comes the challenge: Hypothetically, if poverty is every eradicated and everyone has
reached the happiness plateau of wealth, what then would we do with our economic model? Would we still
try to generate more growth? Even though it’s unnecessary, maybe even counter-productive, to further
happiness? Therefore it is inevitable that the discussion of sufficiency starts entering households and
boardrooms all around the world. Community and business leaders who engage with this topic in a swift,
constructive and creative way will be leading the way to a new level of community vitality and a new
business paradigm that is desperately needed sooner rather than later.
4.2
‘GNH in Business’
Recognising the need for engaging the private profit-driven sector, GNH in Business is a pioneering concept
that was explored, developed and partially trialed within the two case study companies in Bhutan
(Yangphel Adventure Travel & Hotel Zhiwa Ling) over a 14-months period from November 2010 to December
2012. This report is the culmination and summary of the foundations and initiatives that were developed as
part of a GNH in Business program.
The concept of a GNH in Business program emerged throughout the first year of developing sustainability
activities within Yangphel and Hotel Zhiwa Ling. While trying to answer the question of “What makes GNH
different from Sustainable or Corporate Social Responsible (CSR) business models?”, there were two
elements that stood out as the essence of GNH in a business context.
11
A ‘Buddhist View of Happiness’ from http://www.cloudwater.org/ , sighted 17 December 2011
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
13
31-Jan-12
GNH
IN
BUSINESS
Firstly, being a GNH business not only requires a company to do things better in its relationships with
external and internal stakeholders, with their environment and communities but it requires each individual
within a business to become a more evolved human being that can experience and share true and lasting
happiness. This means that the key element of GNH that is not normally addressed in CSR programs is a
recognition that a transformation is required on an individual level by all the people that make up a
business starting from the owners/shareholders to management and general staff. Secondly, the
transformation that GNH in Business is looking to achieve is an increased awareness of sufficiency,
combined with a sense of empowerment that ultimately leads to powerful and positive actions that balance
profit-making with serving others.
Therefore, personal transformation through values and ethics development as well as increased levels of
emotional intelligence is the pinnacle of GNH in a business context. An increased level of awareness and
skillful means among the people who are part of a business community will help individuals make better
decisions that increase community vitality, interact with integrity, communicate with honesty and build
relationships based on GNH values. GNH requires each individual to face the challenge of developing our
humanity and the GNH in Business program instills this learning deep into the core of any company that is
brave enough for the journey – and has the openness and foresight to acknowledge that traditional business
and economic models are no longer serving our communities and environments on a local and global level.
A GNH in Business approach takes a central position in the boardroom of a GNH company. It involves all
departments, staff and stakeholders and is concerned with the happiness of as many people as the
company can reach.
A four-part approach was developed to incorporate aspects of sustainable and responsible business models
(such as CSR) with GNH aspects. See Figure 4.1 below provides a summary of the four-part approach
encapsulating the elements of the GNH in Business model.
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
14
GNH
31-Jan-12
IN
BUSINESS
Figure 4.1: A proposed GNH in Business Model
The four parts to a
GNH in Business model & program in Bhutan
1
Greening our
businesses
2
Driving Community
Vitality
3
Evolving individuals Humanity at its best
Examples of activities
under this part include:
Examples of activities
under this part include:
Examples of activities under
this part include:
1.1 Waste reduction
and recycling
1.2 Energy conservation
1.3 Water conservation
and management
1.4 Carbon
management for a
carbon neutral
business
1.5 Biodiversity
conservation
1.6 Establishing green
purchasing policies
and suppliers
1.7 Use of greener and
cleaner
technologies
2.1 Happiness surveys
with communities that
are effected by a
business
2.2 Offering tailored
transformational
programs that
strengthen Community
Vitality
2.3 Annual contributions
to charity events and
groups
2.4 Organisation of and
participation in sports
and cultural activities
2.5 Community
engagement projects
(private-public
partnerships)
2.6 Initiatives supporting
vulnerable and
disadvantaged sectors
of community
2.7 Annual activities that
support cultural
traditions and
strengthen traditional
knowledge of
languages
2.8 Majority of
employment and
purchasing from local
communities
3.1
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
3.2
3.3
Happiness surveys of all
stakeholder groups and
analyzing their needs
Developing
transformational
programs for various
stakeholder groups that
reinforce a way of life of
sufficiency,
empowerment and
positive action. Programs
will cover decisionmaking with emotional
intelligence, building
honest relationships,
communicating
truthfully, and building
happy communities.
Delivering
transformational
learning programs in lifeskills that can help all
stakeholder groups to
learn how to live and
practice GNH in action
and increase their
happiness index
4
Doing business
ethically &
sufficiently
Examples of activities under
this part include:
4.1 Creating a company
vision, mission and core
values
4.2 Following a strategic &
business plan based on
GNH and company values
4.3 Deciding what is enough
profit to the owners/
shareholders and what to
do with the rest in GNH
spirit
4.4 Sharing lessons learned
with other business
members
4.5 Communicating with
staff, customers,
suppliers and all
stakeholders with
integrity & transparency
4.6 Incorporating GNH values
and decision-making into
Service Rules or Standard
Operating Procedures
4.7 Business leader
development as GNH
ambassadors and
advocates in all aspects
of life and business
4.8 Using GNH decisionmaking tools that will
guide strategic, tactical,
operational & personal
decision-making
15
31-Jan-12
4.3
GNH
IN
BUSINESS
What makes ‘GNH in Business’ different from other sustainable business
models?
There are many definitions and terms that are used widely to describe alternative and more responsible
approaches to conducting business. Some of these terms listed below are becoming more common among
the more enlightened business communities:
•
Sustainable & Responsible Business approach
•
Social Entrepreneurship
•
Corporate Social Responsible (CSR) Business approach
•
Triple and Quadruple bottom line approach
All of the above approaches to doing business use some form of self-regulation that is integrated into the
company day-to-day business activities and interactions. Businesses that follow such approaches usually
monitor and are aware of their impacts on their business performance, ethical standards, the environment,
their staff and customers, culture and communities. All of these business approaches are a demonstration
of a company taking responsibility for its actions and impacts. There is usually a deliberate intention to
include the ‘greater good’ in the decision-making processes in those companies.
The essence of any GNH in Business approach lies in the fact that it includes all of these aspects mentioned
above, plus the business needs to have a commitment to transforming its owners/shareholders, staff,
customers and any other people the company affects. There is an underlying honesty and intention
required that is not just about using a CSR program for making a company look good as part of a marketing
strategy. Any company that would call itself a ‘GNH business’ would have a genuine commitment and
intention from top management to the general staff of wanting to benefit its staff and communities as well
as take care of its environments. A GNH company would never engage in a GNH in Business program to
make more profits. It would purely apply GNH to increase community vitality through the practice of
generosity, compassion, patience and respect – in short, to benefit humanity. If this intention is truly
genuine, the profit-making part of a business is far more likely to succeed through decision-making that is
driven by wisdom, generosity and cooperation rather than being misguided by greed and competition. A
GNH Business would therefore always be a powerful change agent in its communities, to serve others rather
than only itself.
Another differentiating element of GNH in Business as compared to a CSR approach is who is driving this
approach within the business. Often CSR programs are based within the Human Resource Departments,
Public Relations or Marketing Departments. A GNH in Business model however requires the leaders of a
business to lead by example and is therefore located at the center-stage of the boardroom and decisionmaking processes.
Therefore, a GNH in Business Program goes way beyond any Corporate Social Responsibility (CSR) program
as it is concerned with increasing happiness levels of all the people a business interacts with and impacts
upon. The type of transformation of staff also needs to go way beyond motivational and inspirational office
fun. As Mark Murphy 12 found in a recent study “offices that have enterprising cultures – ones where
creativity and intelligence are valued and people advance based on merit and not seniority – have the most
engaged employees. Therefore what happiness means at the workplace is entering a new era. It is no
longer about the latest motivational games or inspirational team-building activities that create a temporary
feeling of happy moments.” Happiness in the workplace today is about a deeper understanding and
evolution of each individual’s sense of community, sufficiency and contribution – celebrating creativity and
innovation.
12
Mark Murphy, Hiring for Attitude: A Revolutionary Approach to recruiting star performers with both
tremendous skills and superb attitude, McGraw-Hill Professional, Nov 11, 2011
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
16
31-Jan-12
GNH
IN
BUSINESS
The concept of sufficiency in a business context may seem like an oxymoron - like bingeing on moderation.
However, any genuine GNH business would be able to answer the question of “What is enough?”. And
herein lies the greatest challenge for any company implementing a GNH in Business program. These
companies will have to be able to answer clearly and confidently three key questions: 1) What is enough
profit for the owners and/or shareholders?; 2) What do we do with the rest?; and 3) How do we spend the
rest to increase genuine happiness among our stakeholders?. This is of course not for the faint-of-heart and
will only work for companies that recognize that they have a responsibility and a part to play in finding
solutions to the current world economic crisis, environmental crisis and crisis of humanity.
Ultimately, it does not matter which figure a business arrives at in declaring what is considered sufficient
profit. The transformational shift for a company towards a GNH philosophy will come through the mere
process of engaging in such discussions at leadership and shareholder levels and will automatically shift the
company’s intentions towards GNH thinking and actions.
Of course in the case of a developing country the concept of sufficiency is a tough expectation for a
business that is trying to create improved standards of living and quality of life for its owners and staff. It is
important to remember that sufficiency is a concept that needs to be debated, discussed and derived at
within each company individually and will vary vastly from company to company and country to country.
GNH in Business - Draft Case Study Report
Copyright © 2012, Isabel Sebastian. All rights reserved.
17