Firms of Endearment: How World-class Companies Profit from Passion and Purpose [Hardcover]

 

 

Create your own review

In the Prologue, when discussing The Age of Transcendence through which the contemporary business world is now proceeding, the co-authors (Rajendra S. Sisodia, David B. Wolfe, and Jagdish N. Sheth) suggest that it is "a cultural movement in which physical (materialistic) influences that dominated culture in the twentieth-century are ebbing while metaphysical (experiential) influences become stronger. This is helping to drive a shift in the foundations of culture from an objective base to a subjective base: People are increasingly relying on their own counsel to decide what the truth is...That shift acknowledges a long-suppressed idea in a world largely guided by Newtonian certainty that chemistry Nobel laureate Ilya Prigogine says is scattering to the winds: Ultimately, everything is personal."

Thus do the authors establish a frame-of-reference for the thesis of their book: That each stakeholder in an organization tends to thrive best when all stakeholders thrive. That is, no stakeholder group is more important than any other. "It is disciplined dedication to the well-being of all stakeholders that separates firms of endearment from their competition." Stakeholder relationship management (SRM), the authors suggest, can achieve and then sustain superior business performance that, in turn, will create n a decisive competitive advantage. They are convinced that SRM business models will increasingly be seen "as the most efficacious way to achieve sustained superior business performance in years to come" but only if (huge "if") the interests of all stakeholder groups are brought into strategic alignment.

Two Questions: Are all stakeholder groups of equal importance and do they have the same interests? Also, are all members of a stakeholder group (e.g. shareholders) of equal importance and do they have the same interests? These questions occurred to me as I read the first chapter, especially the brief discussion of the "distinctive" core values, policies, and attributes that firms of endearment (FoEs) share in common. Eventually, Sisodia, Wolfe, and Sheth provide answers to these questions, answers best revealed within the narrative.

If indeed "endearing companies tend to be enduring companies," how do the 28 FoEs that "made the final cut" for this book compare with the 11 companies praised by Jim Collins in Good to Great? "Over a 10-year horizon, FoEs outperformed the Good to Great companies by 1,026 percent to 331 percent (a 3.1-to-1 ratio). Over five years, FoEs outperformed the Good to Great companies by 128 percent to 77 percent (a 1.7-to-1 ratio). Over three years, FoEs performed on par the Good to Great companies: 73 percent to 75 percent." (FYI, there are no duplicates on the two lists.) As with the exemplary companies discussed by Thomas J. Peters in Robert H. Waterman, Jr. in In Search of Excellence, not all companies on any such list continue to meet the criteria that were the basis of their initial selection.

For me, some of the most interesting material is presented in Chapter 11, "Crossing Over to the Other Side." At one point, the authors cite Oliver Wendell Holmes's observation "I would not give a fig for the simplicity this side of complexity but I would give my life for the simplicity on the other side of complexity." They then quote one of my favorite passages in James O'Toole's The Executive's Compass:

"To move beyond the confusion of complexity, executives must abandon their constant search for the immediately practice and, paradoxically, seek to understand the underlying ideas and values that have shaped the world they work in. Managers who clamor for how-to instruction are, by definition, stuck on the near side of complexity."

According to Sisodia, Wolfe, and Sheth, the big challenge of the times is to transcend the zero-sum mindset because, given the profusion of new opportunities, absolutes (by nature limiting) are found everywhere on the near side of complexity. "They emerge from people's perennial quest for pat solutions, or `silver bullets,' as they are sometimes described. This is a key point because, as Sisodia, Wolfe, and Sheth explain, a zero sum mindset leads to the conclusion that one stakeholder group can only benefit at the expense of the other stakeholder groups...However, opportunities increase by an order of magnitude when the mind breaks free of zero-sum thinking."

There are specific reasons why endearing companies tend to be enduring companies and one of the most important is their having "the ability to transcend ruthless competition and embrace the fruits of cooperation [which is] the essence of evolved humanness."

Those who share my high regard for this book are urged to check out Bill George's Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value and his later book, True North: Discover Your Authentic Leadership, co-authored with Peter Sims. Also Michael Ray's The Highest Goal, Adrian J. Slywotzky's The Upside: The 7 Strategies for Turning Big Threats into Growth Breakthroughs, Enterprise Architecture As Strategy: Creating a Foundation for Business Execution by Jeanne W. Ross, Peter Weill, and David Robertson as well as Ram Charan's Know-How: The 8 Skills That Separate People Who Perform from Those Who Don't, Lynda Gratton's Hot Spots: Why Some Teams, Workplaces, and Organizations Buzz with Energy - And Others Don't, Robert J. Herbold's Seduced by Success: How the Best Companies Survive the 9 Traps of Winning, Jack Alexander's Performance Dashboards and Analysis for Value Creation, and Michael Useem's The Go Point: When It's Time to Decide--Knowing What to Do and When to Do It.

Authors Raj Sisodia, David B. Wolfe and Jag Sheth contend that as U.S. society becomes more concerned with caring, responsible practices, businesses are becoming more aware of serving the society around them, rather than being motivated only by profit. More companies now are building corporate cultures around humanistic values. They provide equal service to each stakeholder group: society, employees, customers, partners and investors. This creates lasting loyalty and even earns a profit. Despite a bit of jargon, the book paints an idyllic but desirable business portrait. Readers might even see its optimism and altruism as a balance to the prevailing negativity. getAbstract suggests this book to executives, entrepreneurs and business theorists.

This book outlines a possible shift in the way people are thinking about their roles and purpose within the companies they work. Basically people are seeking more 'meaning' from their work and as a result companies are changing their basic assumptions and approaches in the field of people management.

The authors assert that changes in demographics, consumer knowledge and an ageing population (which is working longer) is moderating the effects of Hard Capitalism, which favoured shareholders, and introducing a more egalitarian form of Capitalism which favours all stake holders.

The theory is highly seductive and desirable, but the book did not provide any strong evidence to support these claims. They provide plenty of stories and examples to illustrate the theory in action, but it should not be presented as supporting evidence without considering those organisations that also have these 'Enlightened' traits but were nevertheless unsuccessful.

In addition it is not clear which form of employee policy comes first, could it be that only when a company is successful can it treat its employees better with higher wages and enlightened thinking? or will higher wages and an enlightened policy make a company successful?

This book provides a theory which you wish were true, but wishing does not make it so.

Share your thoughts with other customers: Create your own review

› See all 4 customer reviews on Amazon.co.uk

 

5.0 out of 5 stars Impressive Examples of Serving the Full Gamut of Stakeholders
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... Read more

Published on 7 May 2007 by Donald Mitchell

Search Customer Reviews
Only search this product's reviews

› See all 4 customer reviews on Amazon.co.uk

Search Listmania!