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LEADERSHIP IS A PROCESS OF SOCIAL INFLUENCE, WHICH MAXIMISES THE EFFORTS OF OTHERS TOWARDS THE ACHIEVEMENT OF A SHARED GOAL.

Wednesday, July 03, 2013

Positive Leadership: Firms of Endearment

In  his book, “Firms of Endearment: How World-ClassCompanies Profit from Passion and Purpose”,  Professor Raj Sisodia of Bentley University, compiled a list of companies that pay and treat employees significantly above average; provide high value and service to customers; do not squeeze suppliers for the lowest possible prices; invest significantly in their local communities; minimise their environmental impact; and do not cite as a primary goal “maximising shareholder returns.”

Over the 15 year period, 1996 to 2011, the “Firms of Endearment” companies outperformed the Standard & Poor’s 500-stock index by 
10.5 to 1. They returned a cumulative 21%, while Jim Collins’s “Good to Great” companies earned an annualised return of just 7% during the same period, barely outpacing the broader market.

Here is the inescapable conclusion: When a company truly seeks to take care of all its constituencies, it serves not just the collective good, but also its own long-term best interest.

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