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Today’s best companies get it. From Costco� to Commerce Bank, Wegmans to Whole Foods�: 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�, Commerce Bank and Costco�, Wegmans and Whole Foods�: 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.
- Sales Rank: #10263 in Books
- Published on: 2007-02-10
- Original language: English
- Number of items: 1
- Dimensions: 9.30" h x 1.07" w x 6.50" l, .0 pounds
- Binding: Hardcover
- 320 pages
Review
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From the Back Cover
Love, Joy, Authenticity, and Soul:
Building Winning Businesses in the
New Age of Transcendence
�
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• 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�, Timberland(tm), Jordan's Furniture, Trader Joe's, Wegmans, and Toyota(tm)
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Today's best companiesget it. From Costco�to Commerce Bank, Wegmans to Whole Foods�: they're becoming the ultimate value creators. They're generatingeveryform of value that matters:emotional, experiential, social, and financial. And they're doing it foralltheir stakeholders. Not because it's “politically correct:because it's the only path to long-term competitive advantage.
These are theFirms of Endearment. Companies peoplelovedoing business with.Lovepartnering with.Loveworking for.Loveinvesting 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-trulygreat-thisis 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 Endearmentilluminates 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�, Commerce Bank and Costco�, Wegmans and Whole Foods�: 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 youmustdo all this, or risk being left in the dust... andhow to get therefrom 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
About the Author
Rajendra S. Sisodia
Raj is professor of marketing and founding director of the Center for Marketing Technology at Bentley College. He has a Ph.D. in marketing and business policy from Columbia University. He has published nearly 100 articles in journals such as Harvard Business Review, Journal of Marketing, Journal of Business Strategy, Journal of Business Research, and many others. He also writes frequently for the Wall Street Journal. His research, teaching, and consulting expertise spans the areas of strategic marketing, marketing productivity, marketing ethics, and stakeholder-based marketing. In 2003, he was cited as one of “50 Leading Marketing Thinkers” by the U.K.-based Chartered Institute of Marketing. Raj consults with and provides executive seminars for companies in various industries. Clients have included Sprint, Volvo, and IBM, to name a few. He coauthored The Rule of Three (Free Press, 2002) with Jag Sheth. Other recent books include Tectonic Shift: The Geoeconomic Realignment of Globalizing Markets (Sage Publications, 2006) and Does Marketing Need Reform? (M.E. Sharpe, Inc., 2006), both with Jag Sheth. Forthcoming books include The 4A’s of Marketing and Marketing Management (John Wiley & Sons), also with Jag Sheth.
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David B. Wolfe
David is an internationally recognized customer behavior expert in middle-age and older markets. He is the author of Serving the Ageless Market (McGraw-Hill, 1990) and more recently Ageless Marketing: Strategies for Connecting with the Hearts and Minds of the New Customer Majority (Dearborn Publishing, 2003). David’s consulting assignments have taken him to Asia, Africa, Europe, and throughout North America. He is widely published in publications in the United States and abroad. He has consulted to numerous Fortune 100 companies, including American Express, AT&T, Coca-Cola, General Motors, Hartford Insurance, Marriott, MetLife, Prudential Securities, and Textron.
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Jagdish N. Sheth
Jag is the Charles H. Kellstadt Professor of Marketing in the Goizueta Business School at Emory University. He has published 26 books, more than 200 articles, and is nationally and internationally known for his scholarly contributions in consumer behavior, relationship marketing, competitive strategy, and geopolitical analysis. His book The Rule of Three (Free Press, 2002), coauthored with Raj Sisodia, has altered current notions on competition in business. This book has been translated into five languages and was the subject of a seven-part television series by CNBC Asia. Jag’s list of consulting clients around the world is long and impressive, including AT&T, GE, Motorola, Whirlpool, and 3M, to name just a few. He is frequently quoted and interviewed by the Wall Street Journal, New York Times, Fortune, Financial Times, and radio shows and television networks such as CNN, Lou Dobbs, and more. He is also on the board of directors of several public companies. In 2004, he was honored with the two highest awards bestowed by the American Marketing Association: the Richard D. Irwin Distinguished Marketing Educator Award and the Charles Coolidge Parlin Award.
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Most helpful customer reviews
48 of 50 people found the following review helpful.
Impressive Examples of Serving the Full Gamut of Stakeholders
By Donald Mitchell
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.
0 of 0 people found the following review helpful.
A very inspiring read based on a strong research foundation
By Jim Clemmer
If the reason for a company’s existence is just profit, they won’t be very profitable. But if a company isn’t profitable, it won’t exist long enough to serve any other purpose. That’s what we call the purpose-profit paradox.
Firms of Endearment: How World Class Companies Profit from Passion and Purpose draws from an extensive research study looking for companies that focused on endearing themselves to their customers, employees, suppliers, communities, and shareholders. These FoEs are driven by “aligning the interests of all in such a way that no stakeholder group gains at the expense of other stakeholder groups; rather, they all prosper together.”
The authors and their research team narrowed their initial list of 60 companies to “28 companies we felt best manifested a high standard of humanistic performance” and did a financial analysis on these from an investor viewpoint. They found “these widely loved companies (those that are publicly traded) outperformed the S& P 500 by huge margins, over ten-, five-, and three-year time horizons.”
They also compared these FoEs to the 11 companies profiled in Jim Collins book, Good to Great. None of the Good to Great companies made their cut. The FoEs outperformed them by ratios as high as 3 to 1.
The book dives deep into understanding what sets FoEs apart from their peers. It’s brimming with insightful stories and examples from many of the firms. Here’s a partial list their “distinctive set of core values, policies, and operating attributes:
• Subscribe to a purpose for being that is different from and goes beyond making money.
• Actively align the interests of all stakeholder groups, not just balance them.
• Devote considerably more time than their competitors to employee training.
• Their employee turnover is far lower than the industry average.
• Consciously humanize the company experience for customers and employees, as well as creating a nurturing work environment.
• Project a genuine passion for customers, and emotionally connect with them at a deep level.
• Consider their corporate culture to be their greatest asset and primary source of competitive advantage.”
Like Good Company: Business Success in the Worthiness Era, this is a very inspiring read based on a strong research foundation. The authors persuasively argue that we’re now into the “Age of Transcendence…the highest pinnacle that humanity has yet ascended to.” This research is further proof that the future belongs to strong, values-based, moral leaders who use their organizations to enrich everyone involved and make the world a better place.
0 of 0 people found the following review helpful.
So much good to grown on in this book
By Sheryl Hill
So much good to grown on in this book. It makes a poignant appeal to lead with Spirit, the kind of power no one can take from you. Put the love back in the business - build relationships with your customers and employees to withstand the tests of time. People show up for people who care. We need more inspiration and hope and Firms of Endearment.
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