Entrepreneurs

Want to Be Happier? Science Says Avoid the Impact of Relative Deprivation on Feelings of Fulfillment and Life Satisfaction

My friend Mark (not his real name, for reasons that will become obvious) used to run a thriving home healthcare business. $14 million in annual revenue. Enviable profit margins. 

And not incidentally, happy employees: In an industry where turnover often averages over 20 percent, over 90 percent of his employees had been with him for more than five years.

Then he spent a day at a boutique equity firm; while he didn’t accept their offer, he did walk away convinced he needed a fancier office to reflect his own success and status.

Then he spent a resort weekend with friends, and came home convinced his family’s semi-annual camping trips pretty much sucked in comparison.

Then he joined a CEO Peer Group and realized he was the only member who didn’t have a personal assistant. Why should he have to endure the drudgery of entering his own appointments when his new friends enjoyed admin-free lives?

So he hired an assistant. And an office manager. And an operations manager.

And within six months his lean, efficient business had become bloated and unproductive. Costs spiraled. For the first time, some of his best employees not only looked for but actually found greener pastures.

And same equity firm — the one where even the analysts had plush offices — swooped in and purchased his business for a fraction of their original offer.

Mark didn’t need a fancier office; like most good leaders, he loved spending time where things actually happen. He didn’t need assistants and multiple layers of management; he excelled at giving employees the freedom and authority to make important decisions. 

He didn’t need those things.

But he definitely wanted them. 

Because he fell prey to the phenomenon psychologists call relative deprivation.

British Journal of Social Psychology overview says relative deprivation occurs when “persons may feel deprived of some desirable thing relative to their own past, other persons or groups, or some other social category.”

Or in non researcher-speak, relative deprivation occurs when we realize other people have things we don’t… and then start to think we should.

Even if we don’t need them.

Or, in many cases, had previously never thought we wanted them.

Take Mark. For years he took pride in his thrift store desk; to him, it reflected not only his business’s humble beginnings, but also just how far it had come. (Rags to riches is a lot more gratifying when you can occasionally remind yourself of the rags; that’s why so many successful entrepreneurs love talking about those Ramen noodles, maxed-out credit cards, snatch a few hours of sleep on the couch bootstrapping days of yore.)

For years he took pride in his family’s camping vacations; he loved how they bonded when all they had to live on was what they could haul on their backs. For years he took pride in running a flat organization; he loved showing that great leaders lead not only from the front, but also beside.

Yet all that disappeared when he weighed and measured himself against others… and found himself wanting. The Joneses had seemingly surged ahead, and he needed to keep up.

For many people, relative deprivation significantly impacts their level of happiness. A 2017 study published in IZA World Labor found that relative deprivation helps explain why, despite sharp rises in average income around the world, average happiness has not increased.

The authors recommend heavily taxing status-seeking spending, a frankly stupid suggestion. 

The key to avoiding relative deprivation isn’t to avoid seeing things you might want; that’s impossible. The key to avoiding relative deprivation isn’t to avoid meeting people whose success you might envy; that’s also impossible.

The key is to know what you already want: To know your goals, your dreams, your ambitions… to know what provides you with the greatest sense of fulfillment and happiness. 

Do that, and you won’t be as tempted to compare what you have to what other people have. Do that, and you won’t be as tempted to compare what you do to what other people do. 

If you want to be happy, embrace the fact that only two comparisons matter.

First, compare who you are today to who you were in the past. That will remind you — and allow you to feel proud — of just how far you’ve come.

Then compare who you are today to who you hope to someday become.

Because that will keep you focused on having, and doing, what truly matters to you.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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