Simón Cohen, founder of Henco Logistics, transformed a small Mexican logistics company into a major player within the industry. Cohen credits the firm’s focus on employee happiness as the key ingredient to its success — an approach he developed following a personal crisis. Cohen and Harvard Business School professor Francesca Gino, author of the case about Henco, discuss whether or not that approach can endure through Henco’s rapid growth, leadership transition, and changing employee expectations.
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BRIAN KENNY: When the Puritans transplanted themselves from England to America in the 17th century, they brought with them the belief that a life devoted to hard work was the key to unlocking the gates of heaven where a true happiness could be found. For them, work was a means to an end, but the work itself wasn’t a source of happiness. In fact, for them, the more toil involved the better. Nowadays, fortunately, we recognize that happiness at work really matters. In 2018, Dutch consultancy, Happy Office, declared September 22 to be international week of happiness day. Clearly people want to be happy at work and that’s what Simon Cohen, founder and CEO of Henco, wants for his employees, but infusing happiness into the workplace is easier said than done. Today on Cold Call, we’ll discuss Professor Francesca Gino’s case entitled, “Simon Cohen at Henco: Sustaining ‘High Performance, Happy People.’” I’m your host Brian Kenny and you’re listening to Cold Call. Francesca Gino is a faculty member at Harvard Business School. She studies organizational behavior and today we’re thrilled to have in studio with us the protagonist in today’s case, Simon Cohen, founder and CEO of Henco. Thanks both for joining me.
FRANCESCA GINO: Thank you so much for having us.
SIMON COHEN: Thank you very much for inviting me.
BRIAN KENNY: We spend an awful lot of our time at work and in the workplace, and if you’re not happy to be there, it can be a real drag, I think so. Francesca, you’ve looked at this a lot?
FRANCESCA GINO: Absolutely. In fact, when I met Simon, it was a time where I was looking at a lot of data on engagement at work. A good way of summarizing data at the global level is that works sucks for most people, and here you have a person who created a company that is all centered around having people be happy, high performance, happy people. So I had to write a case and try to understand that better.
BRIAN KENNY: How does this relate to your work, your research more broadly?
FRANCESCA GINO: A couple of years back, I was in the midst of finishing up writing a book that basically suggested that if we really want to try to help people find joy in their work, we need to do things a little bit differently. The book that ended up being published under the title Rebel Talent, was all about trying to understand what these people who find a lot of joy in their work do differently, that can inspire us and teach us something that we can also adopt in our own, both work and life.
BRIAN KENNY: I’m going to ask you to start us off maybe by telling us, how would you start the class? What’s the cold call that you would ask the students?
FRANCESCA GINO: There are so many ways that you can actually start the class with this type of case, because it’s incredibly rich and I think there are lots of provoking ideas. The way I often start the case is by asking people to reflect back to what they’ve read in the case and what jumped out at them as different, especially when it comes to the culture that this founder has created for the organization.
BRIAN KENNY: Simon, let’s turn to you for a minute. Maybe you could start just by telling us what Henco is all about, what business are you in?
SIMON COHEN: Well, thanks again for inviting me, I’m pleased, I’m honored to be here. Henco is an international freight forwarder, global logistics company. What we do is international ocean freight, air freight, trucking, customs, insurance and other supply chain. We do not own any hard assets like ships or planes or trucks, but we manage the entire supply chain from A to Z. What we want to bring to the table is a hassle free logistics process for all the companies that are our customers. This is basically what we do, and with a big smile, obviously.
BRIAN KENNY: This is a family business?
SIMON COHEN: No, I started it myself back in 1998, and of course my family came in right after, we are very close together. I will tell you a story maybe later, but right now we have a family office that owns a lot of companies in different industries and the one I’m running is Henco, the logistics company.
BRIAN KENNY: How would you describe the culture at Henco?
SIMON COHEN: Well, I think that the slogan “high performance, happy people,” describes it all. We are completely engaged with results and with being high performers. Being a high performer brings you happiness and happiness will bring you great results. So for me it’s, if you are happy and you’re enjoying your job, then you can be better at what you do and then that will bring great profits to the company. That’s the hypothesis that I want to prove with my concept of high performance, happy people. I truly believe that having a great life, being stable at home, then you can be stable at work. So we basically focused on the people’s stability outside of the office that they can have a good life, they can get good salaries, that they have enough time for them and for their families, and then they can perform better at the office.
BRIAN KENNY: Francesca does your research prove that, that people if they are performing while at work, their life is better all around?
FRANCESCA GINO: When people have the opportunity to find joy in the work that they do and when they also see their contributions and they see that they’re doing well, definitely that helps the organizations overall, and it can be quite contagious for others at work. What I find fascinating about Henco is the fact that, especially when you bring this case to the classroom, people are sort of turning their heads and saying, “What is this all about?” They really want to unpack it a little bit better, and part of it is, what does happy even mean?
FRANCESCA GINO: I love the way Simon talks about it because he talks about it in terms of being at peace. I think that is helpful because it doesn’t mean that you don’t have stressful moments at work or things that happen that make you mad, but overall you are at peace. I often mention the example, which I think is a good parallel of, I’m a mom of four and the oldest is seven and sometimes at home if you were to ask him every minute, “Are you happy?” Probably not in the moment, but I’m clearly at peace and so I would say overall, definitely I’m happy and I think he’s achieving that in his own organization.
BRIAN KENNY: How do you think the employees at Henco would describe Simon?
FRANCESCA GINO: I’ve heard them describe Simon. The best one was the description that really you see the person getting really excited and saying, “Simon is all very excited, and I think he embraces the culture.” It’s almost as if the company itself mirrors what Simon brings to every interaction and it’s a lot of joy and feeling at peace.
BRIAN KENNY: Simon, describe your work philosophy, how do you think about hard work and the benefits of it?
SIMON COHEN: First of all I have to say that I learned this philosophy from my staff. This is not an invention from myself, I really learned from them. I found joy in this story about Hector, he was my first employee. He came in when he was a student still and it was his first job. One day he called me and he said, “Simon, I have good news and bad news.” And I’m like, “Perfect, tell me the good news.” Back then we used to make two invoices per day and we used a typewriter. He calls me and he said, “We did 14 invoices today.” And I was like, “Wow, we’re thriving, everything’s going great.” Then he told me, “But I’ve made mistakes in 12.” So that’s part of the culture, making fun of ourselves, that’s what we truly believe that it’s part of the philosophy. The philosophy itself goes down to taking care of people. Thinking about people as humans and not machines. Asking them how they feel, how they are, how are their feelings, what’s inside their minds, their bodies. If they’re sleeping enough, if they’re working out enough, if they’re eating healthy. If all those things combined, they will just thrive at work, they will do a great job at the office.
FRANCESCA GINO: The philosophy sounds so simple, which is why I think this case is so beautiful. But it’s not, because when you then think about, how do I do it as a leader on a day-to-day basis? I remember in one of the classes that I taught, and Simon was there in the back ready to talk towards the end of class, he was a visitor to class, one of the leaders said, “But it’s so exhausting to bring this to work.” And it is in the sense that it requires effort, it requires investments that sometimes people, at least believe, don’t have the time to make.
SIMON COHEN: But I would say something on top of that, it has to be authentic. You cannot fake this. You cannot fake being a good person. If you are a good person, you can just develop this kind of methodologies for your company, but if you are not like that with your friends or with your family or with your own person, yourself, it will be impossible to make it happen at work. This is my personality, this is the way I am. I’m not acting, I’m not pretending, I’m just being myself at the office. When I go to the aisles and I just cross with Manuel and I ask him, “Hey, how are you?” It’s authentic, I’m just worried about him, or Christopher, or Monica, whoever crosses by. I’m just worried about them and the more worried or concerned I am about their personal lives, the more they get engaged with the business, with the company. It’s kind of crazy but it works.
BRIAN KENNY: You’re investing in them and they’re investing back in you.
SIMON COHEN: But it’s natural, it’s not forced, it’s not in the script, it’s just myself being myself.
BRIAN KENNY: The case describes a turning point in your life where this philosophy came into sharp focus for you. Describe that for us.
SIMON COHEN: Correct. I was a workaholic at the beginning. I started this company back in 1998 and I really wanted to be a billionaire. I thought that if someone can be a billionaire I can, we have all one brain, two eyes, two ears, it’s the same thing. I was a high-performance swimmer back in my teens, and I decided just to put all the philosophy of sports into the business and I really wanted to be the best and the biggest and wealthy. Every day I put my alarm clock at 2:00 in the morning, to reply all my emails with China, came back to sleep at 4:30, then went to the office at 7:00, come back from the office at 11:00 PM. Forgot about my wife, my family, my daughters, myself, no exercise, no healthy eating, no nothing. One day while traveling to China, I was really stressed. I was there for business, and I had a meeting on Friday night with some Japanese people that came from Tokyo to have dinner with me in Hong Kong. I started to feel sick since Tuesday and I didn’t pay attention to my body. I was feeling really sick and that day I was with my wife. We went to the restaurant; I was feeling really weak and I started feeling a pain in my chest. Listen Brian, it was horrible, because when I saw this Japanese people coming into the restaurant, I felt this pain in my chest, like bad, and I told my wife, “Call an ambulance.” Next thing I remember, I felt the second hit in my chest and I fainted. Opened my eyes, I was in an ambulance in Hong Kong. It was 2006, SARS was big. I didn’t want to go to the hospital and the doctor tells me, “Simon, you just had a heart attack and you know something, just stay with us.” I was really in shock, really I thought I was going to die and I spoke with my wife and I said, “Call the doctors in Mexico and ask them what they think.” So they sent the EKGs and they came back with an answer and it was like, “Hey, you have Wolff-Parkinson-White disease, which is not a heart attack, but it’s something that you have in your heart, it’s a disease.
BRIAN KENNY: Still pretty scary.
SIMON COHEN: It is scary, and even more because I was not aware of any single thing, any illness that I have in my body. So I spent a few days in the hospital, I spent another few days in the hotel, recovering, taking pills, medications, anti-depressive pills, anti-anxiety pills, all those medicines. When I decided to go back to Mexico, I took the flight from Hong Kong to Taipei and from Taipei to Los Angeles. On the long haulage, after three hours after takeoff, again, the same feeling, a big hit in my chest and it was horrible. A doctor was traveling in that plane. He came, he put me an injection in my neck. I don’t know why in the neck, it still hurts, and they put me into this deep sleep. I woke up in Mexico in the hospital. They checked me out and they told me that I had a lot of stress and that I had Wolff-Parkinson-White disease. I went to the doctors in the US thinking that Mexican doctors may be wrong, whatever.
BRIAN KENNY: Maybe you get better news from the doctors in the US.
SIMON COHEN: Exactly the same Wolff-Parkinson-White and a lot of stress. I was like, “But I’m Superman, Batman and Spiderman together in the blender, I can’t be sick, I can’t have stress.” But I was really, really stressed. After a year struggling with my health, I decided to take a trip with my family, my three daughters and my wife, to the Caribbean. We rented a beautiful Villa somewhere in the Caribbean, it was beautiful, and I decided to get rid of the medicines slowly. After the first, I would say five, six days, everything was going perfect. Exercising, taking a nap every day, just recovering myself. One day the power went out of the entire Island. My daughters were scared, so I told them, “Hey, let’s go outside to see the stars.” We were lying on the sand with my three daughters on my belly, my wife on my back, relaxing right there. Perfect scenario and I started crying and I said, “All that I want in life is here, from now on, I have to consider changing my lifestyle.” I said to myself, and I promised my girls, that I would try to be the happiest person on earth. So that’s my goal, to be happy every single day of my life and try to share happiness to as many people as possible.
BRIAN KENNY: So that’s what we would call a crucible moment, this is a life changing moment for you, this realization that you had to think differently about your life and therefore that translates to your employees. Pretty powerful.
FRANCESCA GINO: Absolutely. I think that it’s powerful, but in a sense kudos to Simon for making the best out of a bad situation, because some people would have decided to stop working or change careers or whatever, and you didn’t. You tried to think about how this philosophy could be one that really gets embraced in the organizations and I love that.
BRIAN KENNY: Do you work as hard now as you did then but differently, or do you work less? What’s different about what you do now?
SIMON COHEN: I think it’s different, I think that I put myself first and then work. In the past it was work, work, work. Today is, if I’m healthy I can perform better. So I sleep enough, I eat healthy, I exercise, I meditate, I take care of myself, and I encourage my people to do the same thing. Then we can perform great at the office. We have one of the best numbers in the industry, at least in my country or in Latin America.
FRANCESCA GINO: It seems like you also changed your goals in life because it’s not about being the richest man in the world, but it’s about being the happiest one. You always say that you don’t want to be the richest person in the cemetery, rather…
SIMON COHEN: That’s a quote from my wife, “You don’t want to be the wealthiest in the cemetery, so just…”
BRIAN KENNY: But then you changed your metrics. That makes you think differently about what success is for you.
Simon: Correct, and the bottom line is that the company has grown a lot since then, so it brought me peace, happiness, and wealth. It’s kind of awkward, but it works.
BRIAN KENNY: I want to talk about how you implement something like this in the workplace. Simon might’ve been on the leading edge of this, but every workplace is talking about their employees being happy. Everybody wants to be the place that people are attracted to, particularly with this millennial generation, the gen Z and millennials who have a different outlook about what their careers should be. How do you think about this Francesca?
FRANCESCA GINO: What caught my attention about Henco is that happiness is clearly important, but if you think about this important value that is stated as part of the culture as high performance, happy people. So it’s both. As Simon was saying, it’s a reinforcing cycle. To me, the happiness comes in with making sure that people are at peace, that you do your best to support them and that you don’t forget about personal relations, so you actually treat them as a human being, which I think is a lot of the personal approach that Simon brings with him. But it’s also the high performance, and so he reminds me of some of the frameworks that sometimes we talk about in leadership classes, or if Frances Frei was here, I think she would say, “It’s high devotion and high standards”. I think that that’s what those words are all about, is making sure that, “Yes, we try to achieve great profitability, work hard, but I’m here to support you in order to get there.”
BRIAN KENNY: Then I think about Simon, he’s able to do this because of who he is, but there’s only one Simon and as Henco grows, how do you scale that?
FRANCESCA GINO: It’s a question that Simon has thought a lot about so I’m interested in hearing from him how he thinks about this. Part of it is, in which way you can make sure that you have leaders in your organizations that basically embrace the same values and the same ideas that you embrace and that you’re committed to? They might look different, maybe they’re not as excited as Simon is, but still they believe in the importance of carrying on with this type of culture.
SIMON COHEN: Yes, we do have some pillars of the culture, we have people that they live the culture even more than me. I don’t have the reach to control all the employees in the company. We have employees in China, in Central America and Europe. We really want people to be happy, but again, it’s: what’s happiness? Happiness means for me, being at peace. When you’re at peace and you control your feelings and you control what’s going on in your life, then again, you can just do whatever you want. Part of that, it’s working with integrity. In countries like our country, like Mexico for example, or in the Far East, having integrity is kind of difficult, and it’s different being honest than having integrity. Being honest is for the rest of the world, integrity is doing the right thing, even if no one is watching, it’s for yourself. It’s hard in a very corrupted world, in logistics, in Mexico, in China, in those countries that are kind of corrupted, to stay with integrity and to stick to your values. That’s exactly what we do to be at peace, because you have to stay out of trouble, you have to go to bed every night and say, “I’m at peace, I’m okay”, and that will bring you happiness.
BRIAN KENNY: The folks that work for you, the folks that work at Henco understand that this integrity is sort of what drives the organization and then you feel good about being part of an organization that has integrity as one of their key processes?
SIMON COHEN: Absolutely, yes. It’s not only integrity, it’s being thankful and appreciation and all these values that they come together as normal human values. They just are written in a note for the company, for the people, for the employees, that they live the values every day. Appreciation for example, it’s something that we cherish very much in the company. We have to say thank you for whatever, and we have to say hello every morning and we have to say goodbye every night, so it’s just part of the culture. It’s super simple, but there some places that they just don’t do that.
BRIAN KENNY: Simple, but hard at the same time. Francesca, one of the things that I would ask you is, there are lots of organizations that talk about that their employees are happy and they’re passionate about their work and all that, and then you ask the employees and they’d be like, “No, I can’t stand my job.” And, “I can’t wait to get out of here at the end of the day.” What gives there in terms of, are companies just fooling themselves when they think they’re actually achieving those ends?
FRANCESCA GINO: I think it’s easy to put values as words on the walls of the organization. I think what’s hard is consistently showing behaviors across levels of the organizations where you embrace those values. It’s a little bit like all the organizations nowadays want to be collaborative and so they put the word collaborations on the wall or take the walls down. That doesn’t do it for you. It’s more about, what is the day-to-day behavior in every interaction that happens in the organizations. When I think about Henco, what you see in the organization is people who bring their whole selves to work. They know that they’re appreciated for the work and their contributions, but people are also interested in their personal lives and treating them as a whole person. That’s the part that I think is difficult to do because as I said, it takes investment in terms of how you get to know your colleagues and how you have conversations with them.
BRIAN KENNY: Yeah, but if you do it well, there are some great dividends for firms that know how to do this.
FRANCESCA GINO: Absolutely. Simon reminds me a little bit of the type of captains that you would see in pirate ships in the 16th centuries. But let me tell you about why, since I ended up actually studying this pirate ships quite a bit and quite in details as I was working on the book. They’re interesting for two main reasons. First, at a time when it was about 200 years before slavery ended in the United States, they were the most diverse organizations on the planet. So just for that, they were hiring people based on attitude, commitment, skills, not based on race or gender. But interestingly the crew on the ship was in charge of electing the captain and the crew could also remove the captain quite easily if the captain was not behaving well towards the crew, and so he reminds me of a question that I think…
BRIAN KENNY: Is remove a euphemism? How did they remove the captain?
FRANCESCA GINO: We’re not going to go there, but what’s interesting to me is that it brings up the question that I think leaders would benefit from asking on a regular basis, which is, “Am I the type of captain than my crew chooses as leader today?” And I feel as if Simon asks himself the question quite often, and he created an environment where his employees can thrive. I’m pretty sure that, as he goes home, he can say yes to that question.
BRIAN KENNY: Simon I have a question for you, just about the notion of high performance, happy people. Why in that order? Why wouldn’t it be happy people, high performance?
SIMON COHEN: Just for the syntaxes, it rhymes better.
SIMON COHEN: Sometimes people think that being happy is partying all day long, just relaxing at the beach, just not working. We really wanted to make clear to our staff that we are high performers. Our numbers are there, we have great KPIs, our people are super great performers, and we take care of the rest, and they take care of the rest themselves. So for us it’s very important that people understand, even more in cultures like Mexico, that high performance is very, very important for us. So it’s not only happiness. Happiness will bring you to become a high performer, but again, you need to be a high performer.
BRIAN KENNY: Yeah, that’s a good distinction.
FRANCESCA GINO: Again you said something so simple that strikes me as intuitive, that as companies grow they should pay attention to their human capital because people are a primary ingredient to the successful growth. Yet it’s something that I don’t see in a lot of organizations. In fact, often when there is the pressure for growth, you start thinking about introducing the right systems or the right processes, and people sort of get forgotten. It’s more likely for them to become numbers rather than truly their whole selves and considered as human beings.
SIMON COHEN: Sure, and it’s okay to have systems and it’s super okay to have KPIs. We do have a lot of KPIs. You know those and you have seen all those KPIs. It’s great to have the measurement, but it’s also good to consider that humans are humans and that, again, we’re going to die one day and we will not be here, so what are you taking with you? What’s your legacy?
BRIAN KENNY: Yeah, and what are you leaving behind?
SIMON COHEN: Right. Money? You’re not taking money with you. So, okay, we’re successful. Yes, what does success mean? That’s the question. For me, success is a feeling, and when you have that feeling of fulfillment, then you’re happy and then you can sleep tight at night, and that’s the order.
BRIAN KENNY: So you’ve been to class when this has been discussed. I’m just curious, what was that like for you? Any great insights that that came out of the discussion?
SIMON COHEN: Yes, actually I love it. The first class I was lucky enough to bring my father and my mother and my two brothers. It was a magical moment that you lived with us, Francesca. We cried a lot because, again, we started from scratch 20 plus years ago. We were in a hard situation economically and I decided just to come out of the family business, which was in the textile industry, and with the support of my family of course, we made this happen. It was a truly magical moment. The students were, I think they were really happy, Right?
BRIAN KENNY: How could they not be?
SIMON COHEN: I felt really comfortable replying in the Q and A, but for sure the peak of that was that I was lucky enough to say thanks to my parents in front of everyone, and it was a magical moment. Just being there, it was like the energy was impressive.
BRIAN KENNY: That’s great.
SIMON COHEN: It was incredible.
BRIAN KENNY: Francesca, if you had one thought that you want our listeners to come away with and remember from this case, what would it be?
FRANCESCA GINO: I would go back to the heart of the case and about this idea that cultures can be a source of competitive advantage for organizations, and culture can center around people. This nice idea that we often talk about, about people who really feel joy out of their work as they’re performing and being productive, can in fact be achieved.
BRIAN KENNY: That’s great. Simon, I feel that we’re fortunate to get you to sit still for a half an hour to do this podcast, so thank you for being here with us today.
SIMON COHEN: No, my pleasure. Of course, we need to get inspiration from somewhere and you guys inspire me so much. Being at HBS, for me it’s just a dream come true. This is just so unbelievable for me, so thank you so much for inviting me.
BRIAN KENNY: Great, and Francesca, thank you for being here too.
FRANCESCA GINO: Such a pleasure. Thank you.
BRIAN KENNY: If you enjoy Cold Call, you might like other podcasts on the HBR Presents Network. Whether you’re looking for advice on navigating your career, you want the latest thinking in business and management, or you just want to hear what’s on the minds of Harvard Business School professors, the HBR Presents Network has a podcast for you. Find them on Apple podcasts or wherever you listen. I’m your host, Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School on the HBR Presents Network.