Firms of Endearment: How World-Class Companies Profit from Passion and Purpose (Hardcover)

~ Rajendra S. Sisodia (Author), (Author), Jagdish N. Sheth (Author)
Key Phrases: industry dogma, stakeholder relationship management, ultimate stakeholder, New Balance, Whole Foods, United States (more...)

Editorial Reviews

Review

Through a series of real-life vignettes from well-known companies, the 11 brief, well-written chapters compellingly argue that many of today's successful businesses foster intrinsic cultures that embrace values for the stakeholders as well as the shareholders; for them, it is more then just politically correct, it is the only way. This is a book that every undergraduate and every business leader should be required to read.    -- S. R. Kahn, University of Cincinnati

 

Reprinted with permission from CHOICE, copyright by the American Library Association.  

Product Description

Love, Joy, Authenticity, and Soul: Building Winning Businesses in the New Age of Transcendence / Why today's most humane companies are blowing away the S&P 500 averages / Increasing "share of heart": delivering the emotional, experiential, and social value your stakeholders are demanding / 30 powerful case studies, including CarMax(R), Timberland , Jordan's Furniture, Trader Joe's, Wegmans, and Toyota Today's best companies get it. From Costco(R) to Commerce Bank, Wegmans to Whole Foods(R): they're becoming the ultimate value creators. They're generating every form of value that matters: emotional, experiential, social, and financial. And they're doing it for all their stakeholders. Not because it's "politically correct": because it's the only path to long-term competitive advantage. These are the Firms of Endearment. Companies people love doing business with. Love partnering with. Love working for. Love investing in. Companies for whom "loyalty" isn't just real: it's palpable, and driving unbeatable advantages in everything from marketing to recruitment. You need to become one of those companies. This book will show you how. You'll find specific, practical guidance on transforming every relationship you have: with customers, associates, partners, investors, and society. If you want to be great--truly great--this is your blueprint. We're entering an Age of Transcendence, as people increasingly search for higher meaning in their lives, not just more possessions. This is transforming the marketplace, the workplace, the very soul of capitalism. Increasingly, today's most successful companies are bringing love, joy, authenticity, empathy, and soulfulness into their businesses: they are delivering emotional, experiential, and social value--not just profits. Firms of Endearment illuminates this, the most fundamental transformation in capitalism since Adam Smith. It's not about "corporate social responsibility": it's about building companies that can sustain success in a radically new era. It's about great companies like IDEO and IKEA(R), Commerce Bank and Costco(R), Wegmans and Whole Foods(R): how they earn the powerful loyalty and affection that enables truly breathtaking performance. This book is about gaining "share of heart," not just share of wallet. It's about aligning stakeholders' interests, not just juggling them. It's about building companies that leave the world a better place. Most of all, it's about why you must do all this, or risk being left in the dust...and how to get there from wherever you are now. Foreword xv Prologue A Whole New World xxi Chapter 1 It's Not Share of Wallet Anymore; It's Share of Heart 1 Chapter 2 New Age, New Rules, New Capitalism 23 Chapter 3 The Chaotic Interregnum 49 Chapter 4 Employees--The Decline and Fall of Human Resources 65 Chapter 5 Customers--The Power of Love 97 Chapter 6 Investors--Reaping What FoEs Sow 125 Chapter 7 Partners--Elegant Harmonies 145 Chapter 8 Society--The Ultimate Stakeholder 171 Chapter 9 Culture--The Secret Ingredient 197 Chapter 10 Lessons Learned 235 Chapter 11 Crossing Over to the Other Side 253 Acknowledgments 273

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Product Details

• Hardcover: 320 pages
• Publisher: Wharton School Publishing (February 10, 2007)
• Language: English
• ISBN-10: 0131873725
• ISBN-13: 978-0131873728
• Product Dimensions: 9.1 x 5.8 x 1.2 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.7 out of 5 stars  See all reviews (19 customer reviews)
• Amazon.com Sales Rank: #64,272 in Books (See Bestsellers in Books)

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Most Helpful Customer Reviews

4 of 4 people found the following review helpful:

5.0 out of 5 stars Insightful and Inspiring, March 26, 2007

By	– Sharon P. Whiteley, CEO, ThirdAge Inc. - See all my reviews

Firms of Endearment is a critical, insightful and inspiring piece of work. One of the major contributions of this book (and there are many) focuses on the impact that employees and stakeholders have on the success of an enterprise. Many in business say how important their people are, yet it is more often than not that facts prove otherwise. When employees and leaders come to the workplace with their "hearts connected to the brains", their creativity, productivity and performance quality is exponentially greater than those who come just to do a job. People build companies - they always have, they always will. Firms that endear their people will win. Hat's Off to David Wolfe, Rajendra Sisodia, and Jagdish Sheth. You have enlightened many. - Sharon P. Whiteley, CEO, ThirdAge Inc.

2 of 2 people found the following review helpful:

5.0 out of 5 stars Impressive Examples of Serving the Full Gamut of Stakeholders, May 7, 2007

By	Professor Donald Mitchell "Jesus Makes Me a P... (Boston) - See all my reviews (TOP 10 REVIEWER)

What is a Firm of Endearment? The authors argue that their example companies share a common set of core values, policies, and operating attributes which include:

1. aligning the interests of all stakeholder groups (customers, employees, partners, investors, and society) rather than seeking profit optimization

2. below-average executive compensation

3. open-door policies

4. employee compensation and benefits are above average for their industry

5. above-average employee training

6. empower employees to satisfy customers

7. hire employees who are passionate about the company's purpose

8. humanize customer and employee experiences

9. enjoy below-average marketing costs

10. honor the spirit as well as the letter of laws

11. focus on corporate culture as a competitive advantage

12. are often innovative in their industries

Companies identified include extensive examples drawn from Commerce Bank, Container Store, Costco, Harley-Davidson, Honda, IDEO, IKEA, jetBlue, Johnson & Johnson, Jordan's Furniture, New Balance, Patagonia, Southwest Airlines, Starbucks, Timberland, Toyota, Trader Joe's, UPS, Wegmans, and Whole Foods.

These companies are often contrasted with Wal-Mart and the Good to Great Companies identified by Jim Collins in 2001 in terms of stock price growth.

The authors argue that there is a new level of consciousness emerging that rewards those who do good while doing well. The implication is that all firms should shift to stakeholder optimization and the cultural values identified in the example companies.

While they don't make this argument, it's clear that the authors have identified many of the mindsets that lead a company to seek optimizing results for all stakeholders.

Before you assume total cause and effect, I would like to raise some issues not fully addressed in the book:

1. This is an after-the-fact evaluation. As such, (like Good to Great), we may mostly be seeing what the leaders are proud of . . . rather than what caused their success. For example, Southwest's success is focused on their corporate culture. But the company also has a better business model than almost any other airline (Ryanair's is better) and does a better job of fuel cost hedging than any other U.S. airline. Those factors aren't mentioned.

2. These companies are almost all in consumer products or services. A class of socially conscious consumers has sprung up who look hard for such firms. It's not clear that OEM and industrial buyers have evolved their preferences nearly to the same extent. So many of the lessons may only apply consumer goods and services (except for those validated by Gallup for having a motivated and effective group of people working for you).

3. Almost all of these firms are highly effective business model innovators who have gained enormous advantages over competitors who seldom innovate their business models. As a result, they can afford practices that may or may not pay off in profit without incurring any negative reaction. The next business model innovation will pay for the cost.

I was surprised that this book didn't look at the study I made from 1992-2001 that identified continuing business model innovation as the single best factor for explaining high levels of corporate performance (see The Ultimate Competitive Advantage). The books share some examples in common (including Jordan's Furniture and Timberland), but many of FoE's examples are also superior business model innovators (Amazon, BMW, CarMax, Caterpillar, Container Store, Costco, eBay, Google, Harley-Davidson, IDEO, IKEA, jetBlue, Patagonia, Starbucks, Trader Joe's, UPS, Wegmans, and Whole Food).

4. It often pays better to serve stakeholder interests than to ignore them. Why? Because ignoring stakeholders often burdens both the company and the stakeholder with costs and experiences that neither want. This economic case for stakeholder focus isn't fully developed outside of the customer arena.

5. The book emphasizes sustainability, but much of that argument is built around companies disappearing from the Fortune 500 (something that happens whenever a merger happens . . . which doesn't mean that the organization goes away, just the corporate headquarters in most cases). In the research of my students on environmental sustainability (see Hiroshi Fukushi's work, A Strategic Approach to the Environmentally Sustainable Business, for example), it's apparent that making the environment cleaner than when you touched it is economically advantaged in most situations. The idea of sustainability is based on the outmoded notion of not doing too much damage rather than finding profits in making the world better than you found it.

But it's a good book that creates more questions than it answers. This one will probably stimulate some more careful thinking in the area of where seeking to be more considerate of others is going to create better results as well as better sleep.

2 of 2 people found the following review helpful:

4.0 out of 5 stars Sharp, New Millennium Look at Emotional Intelligence as a Quantifiable Value in Corporate America, April 16, 2007

By	Ed Uyeshima (San Francisco, CA USA) - See all my reviews (TOP 100 REVIEWER)    (REAL NAME)

With the tidal wave of publicity for Al Gore's "An Inconvenient Truth" and the spotlight it has given to the green movement, it seems like a ripe time to take stock of companies who are incorporating more social responsibility into their charters. Co-authors Raj Sisodia, Jag Sheth, and David B. Wolfe make a compelling case for how such thinking is not only a much-needed injection of humanism into private enterprise in this country but also the impetus for long-term success at a time when people are seeking greater meaning in their lives. Wolfe, the only non-academic of the three, ventures the furthest in delineating what he considers the art of empathy and the power of bringing soulfulness to the workplace. Such seeming intangibles have been repeatedly dismissed by those unwilling to recognize the human equation at the base of such operations.

Wolfe's bottom line is that soft skills translate into hard numbers, and he feels the days of well-known autocratic CEOs like Disney's Michael Eisner and Hewlett-Packard's Carly Fiorina are numbered if not over. The book's coy title actually refers to the model firms - Whole Foods, Harley-Davidson, Trader Joe's, Costco, Southwest Airlines, JetBlue, Patagonia, IKEA and New Balance among them - who have aligned principles of emotional intelligence with shareholder value in ways that induce more loyalty among the most valued employees. The data gathered by the co-authors suggests that firms which encourage emotional intelligence are more likely to have workers who benefit from feedback and achieve more for themselves and their companies over time. Emotional intelligence manifests itself in several ways, whether it is more modest executive salaries, open-door policies, better employee benefits, better training or a stronger focus on the customer experience. Moreover, the co-authors place high value on environmentally friendly practices and social consciousness as part of a company's vision.

The emphasis on emotional intelligence represents a major paradigm shift and one that has been working in tandem with globalization in recent years. It has given birth to the stakeholder relationship management business model (SRM), which supersedes the well-established customer relationship model with its primary focus on products and profits. Reflecting a much broader vision, the SRM is more dependent on coordinating systems which help keep healthy the company's economic ecosystem, which is the basis of its growth, development and economic health. The ensuing loyalty among employees gives rise to what the co-authors term "share of heart". It's an elusive concept but one mastered by a new breed of CEOs who manage to inspire with their idealism even when short-term profitability looks bleak. Sisodia, Sheth and Wolfe provide intriguing portraits of these leaders and the unique cultures they have managed to develop over time while still delivering on their bottom lines. If anything, this eminently readable book is a testament that Machiavellian tenets need not guide companies at the expense of the people who maintain them.