“Humanistic companies – or firms of endearment (FoEs) seek to maximize their value to society as a whole, not just to their stakeholders. They are the ultimate value creators: They create emotional value, experiential value, social value, and of course, financial value.”
This is the definition of firms of endearment as coined by authours Rajendra S. Sisodia, David B. Wolfe, Jagdish N. Sheth in their book of the same name. This book was recommended to me by Peggy Cunningham who is Director of the Centre for Corporate Social Responsibilityat Queen’s School of Business.
Although I’ve only read the first chapter (available on line at Firms of Endearment) I found a lot that resonated with me. The authours believe that FoEs share a set of core values, policies, and operating attributes including:
- Actively aligning the interests of all stakeholder groups, not just balance them.
- Executive salaries are relatively modest.
- Operate at the executive level with an open-door policy.
- Employee compensation and benefits are significantly greater than the standard for the company’s category.
- They devote considerably more time than their competitors to employee training.
- Employee turnover is far lower than the industry average.
- They empower employees to make sure customers leave a transaction experience fully satisfied.
- They make a conscious effort to hire people who are passionate about the company and its products.
- They project a genuine passion for customers, and emotionally connect with customers at a deep level. By earning a larger share of customers’ hearts. they earn a larger share of customers’ wallets.
- Marketing costs are much lower than those of their industry peers, while customer satisfaction and retention are much higher.
- They view suppliers as true partners and encourage suppliers to collaborate with them in moving both their companies forward.
- They honor the spirit of the laws rather than merely following the letter of the law.
- They consider their corporate culture to be their greatest asset and primary source of competitive advantage.
- Their cultures are resistant to short-term, incidental pressures, but also prove able to quickly adapt as needed. As a result, they are typically the innovators and breakers of conventional rules within their industries.
I’ll be reading this book.