FIRMS OF ENDEARMENT: How World-Class Companies Profit from Passion and Purpose is an excellent book, supporting the idea that companies are more successful when they form positive emotional bonds with employees, customers, and investors. I’ve been reading it recently in preparation for leading the Entreprenerds discussion on April 18th, “Business for the 21st Century”.
I’ve learned a lot from this, and it’s been useful for my own coaching business.
By definition, the owner of a values-based business is focused on “doing something important.” But there’s always the question of whether he or she will be rewarded by also having a profitable and sustainable business.
The authors’ research indicates quite strongly that Firms of Endearment (what I call values-based businesses) will meet both goals, that they go hand in hand.
It’s compelling and convincing.
But the caution that we all need to have is that having a values basis does not excuse you from running a well-designed business. You still have to deliver products or services that customers need. You still need to be efficient in your operations, and savvy in your suppliers and partners.
It’s absolutely true that the general populace these days is focusing more on values and principles. Top employees search these things out. Customers incorporate it into their decisions when they desire to have an emotional connection to their purchases.
Even investors, who are about as left-brained and logical as you can imagine, are starting to incorporate values into their investment decisions.
It’s a double-edged sword as well. When you declare to the public that you have some additional principles you’re operating against, everyone will be even more disappointed when you fall short. And despite your explanations, those people may have even higher standards than you do; they’re connected with you because they hope that you will be able to achieve THEIR dreams.
The lesson from this? Make sure your claimed values aren’t just whitewash, because people will see through that quickly and, if disappointed, may start working against you.
And be transparent – both with your aspirations and failings.