Do Companies With Heart Make Money? Part 2

Do Companies With Heart Make Money? Part 2

In the previous post, we discussed that a Firm of Endearment (FoE) was more profitable over time than either an S&P 500 or a “Good to Great” company. Additionally, Raj Sisodia, David Wolfe & Jag Sheth, who wrote Firms of Endearment, determined that the key to these profitable FoEs is their culture.

Strongest Competitive Difference – FoE Secret Ingredient

The authors say that corporate culture is what matters most to FoEs and that it is the strongest competitive difference. From their point of view, culture is the secret FoE ingredient and the book outlines three primary culture elements and the cultural characteristics that FOEs share.

Summary of FoE Cultural Characteristics

FoE cultures are all about people according to Sisodia, Wolfe & Sheth. “One term sums up the rich and varied cultures of FoEs: people-centered. These companies believe in dealing with all people, whether employees, customers, or any other stakeholders, as individuals, not as numbers or as objects for exploitation. This is reflected in the ten tenets of FoE corporate cultures below.”

  • Culture of learning
  • Culture of trust
  • Culture of interdependency
  • Culture of integrity
  • Culture of transparency
  • Culture of loyalty
  • Culture of respect
  • Culture of belonging and oneness
  • Culture of caring
  • Culture of fun

Firms of Endearment Strive for Share of Heart

It is exciting to see culture characteristics like trust, interdependency, respect, belonging, caring and fun in such high performing companies. These companies strive to have, and deeply value, an emotional connection with all their stakeholders as this excerpt signifies:

“Numerous companies are successful and admirable in many ways but lack a strong emotive dimension. We argue that for the best prospects of success in the future, companies will need to combine an emotive dimension with operational efficacy …

FoEs have bought into a different idea; they strive for share of heart. Earn a share of the customer’s heart and she will gladly offer you a bigger share of her wallet. Do the same for an employee, and the employee will give back with a quantum leap in productivity and work quality. Emotionally bond with your suppliers, and reap the benefits of superior offerings and responsiveness. Give communities in which you operate reasons to feel pride in your presence, and enjoy a fertile source of customers and employees.”

How much share of heart does your company have? How do companies measure their culture to find out? Next time we’ll discuss a culture assessment that helps leaders do just that.

If you have any questions in the meantime, please feel free to send me an email.

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