Firms of Endearment

For some reason, I’ve always been fascinated by corporate cultures, how they are achieved, and the potential they deliver. By “corporate culture”, I mean the real long-term attitude of the company toward its’ mission, not what is stated on the posters (and tend to change every year or so).

A book, Firms of Endearment, recently focused on this topic. It claimed that as our population ages (for the first time, more people are over 40 than under), people would have more balanced expectations of companies. Rather than having a singular focus on shareholders, businesses will need to please ALL stakeholders, including owners, employees, customers, and the community.

Examples of firms which endear themselves to all stakeholders include Starbucks, Costco, Whole Foods, Southwest Airlines, Harley Davidson, Toyota, Honda, The Container Store, REI, Google, Timberland, and New Balance. The book was not a denial of capitalism; these companies excel in generating value.

But they sure think differently …

They pay more than their competitors, eschew layoffs, avoid outsourcing, think innovatively, seek to serve the community, pay their taxes, seek long-term partnerships with their suppliers, and do not pay outlandish salaries to their executives. As a result, their work forces are highly productive (but are selectively hired), communities welcome them with open arms, and their customers are fiercely loyal.

This resonates with me, but face it: achieving this type of culture is not something you layer on, but something you build from the foundation up. It’s genuine, and therefore not easily achieved.