Firms of Endearment: How World-Class Companies Profit from Passion and Purpose

Firms of Endearment is a critical, insightful and inspiring piece of work. One of the major contributions of this book (and there are many) focuses on the impact that employees and stakeholders have on the success of an enterprise. Many in business say how important their people are, yet it is more often than not that facts prove otherwise. When employees and leaders come to the workplace with their "hearts connected to the brains", their creativity, productivity and performance quality is exponentially greater than those who come just to do a job. People build companies - they always have, they always will. Firms that endear their people will win. Hat's Off to David Wolfe, Rajendra Sisodia, and Jagdish Sheth. You have enlightened many. - Sharon P. Whiteley, CEO, ThirdAge Inc.

According to the authors, a Firm of Endearment or FoE is a company whose decisions are made with the social consequences in mind. This runs contrary to what many people consider to be the fundamental principles of capitalism, which is to maximize your value at all costs within the acceptable legal, moral and ethical bounds. The authors demonstrate that many companies are achieving better growth than the "hard-core capitalists" by actively considering the overall consequences of their actions. In fact, some of the most telling passages are quotes from the hard-cores about how foolish the behavior of the FoE's is. This is then followed by data demonstrating that the performance of the companies run by the hard-cores is dwarfed by the FoE's. In some cases, those who proclaim an increase in shareholder value to be the pinnacle of success run companies where the stock price has declined during their tenure. There have been problems with capitalism and the corporations since both were first invented. In the late nineteenth century, business leaders were known as robber barons and it took government action to break up the trusts. In retrospect this was an excellent action as it allowed the free market to emerge from the previous one controlled by the powerful. At the start of the twenty-first century we have a global economy and major threats from global warming. Capitalism also needs to change to reflect the new reality. The authors of this book show that the latest version of the robber barons that get enormous salaries for mediocre performance are a fading breed. The best new corporations have passion, heart and a sense of the common purpose of humanity. Not only are they the kind of people that you would want to have over for dinner, but they are also some of the best run and most profitable businesses. This book should be required reading in all introduction to business courses.

David Wolfe, through his corporate exemplars, has turned the American business model on it's head - and maybe not a momemt too soon. Doing Good Means Doing Better might be the mantra of these modern, enlightened and successful "Firms of Endearment." And while "greed is good" may be the more likely mantra of most large businesses today, the authors point out there are two inherent flaws in this management theory: one, they certainly don't do "good," and two, they don't do better (in fact, they are measurably inferior). What Mr. Wolfe and his co-authors are talking about is a sustainable way to do business that is incomparable in its fulfillment for all workers (as they point out, even Jim Collins' profiles in "Good to Great" have not sustained their growth.) Mr. Wolfe is a social engineer, apparently, and this book is a blueprint to save capitalism from its darker side. Not to mention making it more productive.

Firms of Endearment is the most important business book ever. The authors have for the first time that I am aware of, conducted a scientific study designed to identify businesses that use a wide range of ethical issues to guide their operations. I have long believed that an ethical business model will outperform any other. It just makes common sense. Now I have solid evidence that my view is correct. While I was not surprised that an ethically driven business model performs well, I was surprised by the level of its success. I expect the authors were as well. After all, they didn't set out to identify companies that were highly profitable. They were looking for the good guys. They didn't set any arbitrary number like the Top 100, they just wanted to find companies that met high standards. They had found 28 at the time they wrote the book. It wasn't until after they had their list that it occurred to them that they had better look at the financial performance of their poster children. About half of the companies they chose are public companies. When they checked the return these companies posted over a ten-year period, it showed an eight-to-one advantage over the average of the S & P 500. That's eight-to-one over the average --not the worst, the average. This book should be required reading in every executive suite, boardroom and business class. The members of every corporate board should use the principles outlined in this book to guide their oversight of the companies whose shareholders they represent. Directors are there to maximize the return their investors receive and Firms of Endearment gives them the tools to do just that. Let's hope this book marks the beginning of a new way to do business, worldwide.