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their local communities; minimise their environmental impact; and do not cite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.
