Firms of Endearment 718.4

A challenge I frequently face while consulting with senior executives and boards of directors of public companies is a belief that their primary mandate is to make profits and enhance shareholder value. Thus, ethical principles like honesty, fairness, and caring are proper guides to decision making only to the extent that they can demonstrably improve profitability or be incorporated into laws.

Recently, the Wharton School of Business published a book called Firms of Endearment: How World Class Companies Profit from Passion and Purpose, making the strongest case I’ve seen that good ethics really is good business.

The description on the inside jacket sounds like it comes from new-age, fuzzy-headed anti-capitalists rather than from professors at one of the nation’s most prestigious business schools. The authors make the extraordinary claim:

We’re entering an Age of Transcendence, as people increasingly search for higher meaning in their lives, not just 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.

What makes this book so important are the cases studies and data that demonstrate that treating customers, employees, suppliers, and the general public extremely well yields extraordinary business results. In other words, good ethics is a great profit strategy.

This is Michael Josephson reminding you that character counts.

For more on Firms of Endearment and why nice guys can finish first, go to Do Nice Guys Really Finish Last? 719.1

Comments 1

  1. Although this should be obvious, to many it is not. In any interaction, treating the other party with respect is the only way to go. It is human nature to return to a business where one is well treated. Being callous and all about profit cost customers in the long term.

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