Firms of Endearment - Raj Sisodia, David B. Wolfe, Jag Sheth

Firms of Endearment - Raj Sisodia, David B. Wolfe, Jag Sheth

Value Being more than Having! Extend your purpose beyond creating wealth for shareholders and gain a long-term competitive advantage!

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Fundamentalist capitalists suggest that only money and profit matter in the business world.

However, this is an increasingly outdated mentality, since research demonstrates the viability of obtaining positive economic results as a Humanized company.

We are living in the so-called "Era of Transcendence", marked by the search for meaning in life also in the workplace.

For this reason, it is extremely important that companies adapt to this new scenario and start to focus more on their people and their culture.

In the book "Firms of Endearment", the authors report the experiences of several companies that have obtained impressive results while investing in social actions and improvements in the lives of their employees.

Want to know how humanized companies operate? Continue reading and we will show you the reason for such success!

About the book "Firms of Endearment"

The book "Firms of Endearment" was published in 2015 by the authors Raj Sisodia, David B. Wolfe and Jag Sheth. The work has 368 pages distributed in 11 chapters and two appendices.

The book deals with the fundamentals and practices adopted by humanized companies, thus demonstrating the path to long-term competitive advantage.

About the authors Raj Sisodia, Jag Sheth and David B. Wolfe

Raj Sisodia, Ph. D. in marketing at Columbia University, has published 7 books, including The New York Times bestseller "Conscious Capitalism: Liberating the Heroic Spirit of Business".

In 2003, he was named as one of the Top 50 Thinkers in Marketing by the Chartered Institute of Marketing.

Jag Sheth has published 26 books and is internationally known for his contributions on subjects such as consumer behavior, relationship marketing and competitive strategy.

In 2004, he was honored with the two biggest awards given by the American Marketing Association.

David B. Wolfe, now deceased, has carried out consultancy work in leading companies from around the world. In addition, he was a widely recognized specialist in market behavior in middle age.

To whom is this book indicated?

The book "Firms of Endearment" is indicated for managers and leaders who want to obtain a long-term competitive advantage and, at the same time, contribute to a better society.

Main ideas from the book "Firms of Endearment"

  • We are living in the Age of Transcendence in which being is valued more than having it;
  • Companies no longer have control over the market and, therefore, need to promote effective dialogue with all stakeholders;
  • The human being is not a resource, it is a source;
  • We must abandon marketing based on opportunism and do marketing based on love and healing;
  • The search for short-term results often undermines long-term success;
  • Companies need to see their stakeholders as partners and not as objects to be exploited to achieve large profits;
  • The values of the business world cannot be antagonistic to social and human values;
  • The corporate culture is one of the biggest competitive advantages of humanized companies;
  • Humanized companies challenge the dogma of industry and traditional marketing;
  • It is possible to have a scenario where everyone can win.

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[Book Summary] Firms of Endearment 2.0 - Raj Sisodia, David B. Wolfe, Jag Sheth

Overview: Building the business with love and care

The book "Firms of Endearment" begins by addressing how important it is for companies to value not only shareholders but all their stakeholders - employees, suppliers and customers.

All of these agents are interconnected and interdependent, so one should not be privileged over the others.

Based on this idea, humanized companies are those that seek to offer more and more value to society as a whole. This makes the stakeholders create an emotional connection with these organizations, making these relationships much more lasting.

In addition, the authors argue that bringing love and affection to business operations can bring extremely positive results.

Although many take only numbers into account, we are living in a time when the growth of companies depends more and more on qualitative and less quantitative factors.

It is important to note that there are no perfect companies.

However, humanized companies shape their cultures based on the premise that everyone should collaborate so that people live happier and more satisfied. In this way, they are able to create a healthier environment for society and still produce considerably higher profits.

Overview: New age, new rules, new capitalism

The credibility of companies and their executives has never been so low. This sad reality is a reflection of morally poor corporate cultures, in which money is more important and more valued than people.

We are living in the Age of Transcendence, marked by the search for meaning in life and the appreciation of being and not having. This focus on being is called by Erik Erikson as generativity.

Humanized companies, which seek to be more socially aware, are a reflection of the increasing influence of generativity.

This whole movement has changed the way of doing business. This means that companies are focusing more on all of their stakeholders and becoming the preferred companies to transition to.

This attitude reduces advertising costs and keeps customers loyal.

Emotional intelligence is extremely important for long-term management success and this moral revolution is a growing trend that must be followed so that companies do not fail.

In short, one must seek to acquire loyalty and affection from stakeholders to achieve longevity and success.

Overview: Dealing with clutter

Companies have faced many changes due to technological revolutions, globalization and consumer choices. All of these changes invade the business world and create a scenario of the disorder.

In other words, companies face the challenge of a market where they no longer have control.

This lack of market control is mainly due to the use of the internet and other self-organizing technologies.

This idea of self-organization has been adopted by humanized companies and makes all its members able to collaborate and participate in decision-making, without the existence of traditional command and control.

This whole scenario provides a balance between the stakeholders, maintaining the well-being of the economic ecosystem in which they operate.

In addition, the market started to be dominated by conversations, with the need for transparency, since now the power of information is in the hands of the masses.

The authors address four principles for companies to be able to promote effective dialogue. Are they:

  1. Establish a positive relationship (or reinforce an existing one) before starting business;
  2. Show a willingness to be vulnerable;
  3. Promote reciprocal empathy, through which stakeholders return empathy for the company;
  4. Conduct conversations with genuine reciprocity.

Overview: Employees - from resources to source

Humanized companies have provided evidence that paying better salaries and granting benefits to employees generates lower costs with recruitment and training and leads to higher productivity rates.

This shows us that remuneration is not an isolated variable and, therefore, must be analyzed along with other factors.

Today, work is seen not only as a means of survival but as a form of personal fulfillment.

For this reason, leaders of humanized companies recognize and celebrate the efforts of their employees. And, as a consequence of this scenario, these companies become very attractive to work with.

Another important factor is the development of trust in companies. In this process of building trust, which can be slow, some fundamental elements are listed, such as:

  • Respect for individuals;
  • Transparency;
  • Team building;
  • Empowerment;
  • The pleasure of work;
  • Fun;
  • Balance and flexibility;
  • Creative benefits of quality of life.

In short, the main message of this chapter is that doing good people management can be very advantageous.

And, for this to be possible, it is very important that companies invest in the development and qualification of their personnel, that they know how to connect employees from all sectors and levels and that they understand that a human being is not a resource, but a source.

Overview: Customers - healing vs. opportunism

We all know that to retain customers it is necessary to delight them, to exceed their expectations. This demonstrates that a customer's loyalty is much more related to the heart than to reason.

Twentieth-century marketing was based on opportunism, that is, marked by salespeople who put their interests ahead of consumers' needs.

Marketing in the Age of Transcendence, on the other hand, is based on love and healing, which has led companies to much more satisfactory results.

This shift in marketing is a major intellectual and emotional challenge, as it requires abandoning old ways of thinking to launch yourself into something totally new. However, it can lead to more committed employees and, consequently, more satisfied customers.

Overview: Investors - reaping what humanized companies sow

In the past, only wealthy people owned shares and bonds. However, in recent years, there has been widespread ownership of these shares, which has created pressure for greater corporate transparency.

In addition, these individual investors started to rely on moral values when choosing which company to invest in.

What this book advocate is that the focus on creating value for all stakeholders is more important than simply obsessing over money.

This is proven when analyzing a group of companies and it turns out that the most profit-oriented ones are generally not the most profitable.

In addition, the search for short-term results often undermines the long-term success of companies. In order to be able to achieve longevity, it is necessary to harmonize the interests of the groups of stakeholders, making employees and shareholders become customers and customers becoming employees and acquirers of shares.

Overview: Partners - elegant harmony

As previously stated, in the Transcendence Era, successful companies are those capable of generating value for all stakeholders and not only for shareholders.

Humanized companies are self-fulfilling entities. This is possible because they are analogous extensions of the people who direct them, leaders capable of combining good results and social responsibility.

Based on this idea, companies need to see all their stakeholders as partners and not as objects to be exploited to achieve large profits. This partnership must happen even with unions. Collaboration between those involved is much more profitable than exploration!

This means that these people take actions that generate different results than the logic of traditional management would indicate.

Overview: Society - The supreme stakeholder

Humanized companies see the well-being of their stakeholders as an objective in itself, understanding its impact on society and the environment. The authors list some ways that these companies use to fulfill their social obligations. Are they:

  • Encourage employee involvement;
  • They take care of local communities;
  • Cultivate the global community;
  • Increase competitiveness;
  • They focus on sustainability;
  • They cooperate with governments.

Overview: Culture - The secret ingredient

Corporate culture is one of the biggest competitive advantages of humanized companies. This culture is nothing more than the set of values that unite the members of an organization, that is, a common purpose.

In addition, it has a huge influence on everyone who experiences it.

According to the authors, there are three main elements of organizational culture:

  1. Organizational vision: "Where are we going and how do we plan to get there?"
  2. Organizational values: "Who are we and what makes us work?"
  3. Organizational energy: "It reflects the passion, joy and commitment of its employees and other stakeholders".

In addition, they also point out four elements in the corporate vision of humanized companies:

  1. A broader purpose than wealth generation;
  2. Dedication to servant leadership;
  3. Exemplary commitment to citizenship;
  4. Recognition that they are part of an economic ecosystem with many interdependent participants.

In humanized companies, their values are part of their DNA. They are people-centered and, therefore, create a culture of learning, trust, interconnection and interdependence, integrity and transparency, loyalty, respect, belonging and uniqueness, care and fun for everyone involved.

What to take from the lesson

Among the various lessons offered by humanized companies, we mention the most important:

  • They defy the dogma of the industry;
  • They create value by aligning stakeholder interests;
  • They are willing to break the traditional bargains;
  • They operate with a long-term perspective;
  • They favor organic growth instead of mergers and acquisitions;
  • They mix work and leisure;
  • They reject traditional marketing models.

What do other authors say about it?

In the book "Reinventing Organizations", Frederic Laloux says that organizations are shaped according to the evolution of human consciousness.

Today, there are some companies that encourage their employees to participate in making more complex decisions. The tendency, according to him, is for organizations to become increasingly horizontal, disregarding the traditional hierarchical system of power.

Youngme Moon, in the book "Different", states that brands that adopt reversal postures, break with conformism and hostility have a high chance of really finding their differential.

Going deeper into the question of how to motivate teams and develop leadership, the book "Motivational Marketing" aims to inspire its employees to succeed at work. In this journey, the authors highlight the importance of knowing its purpose and its final mission.

Okay, but how can I apply this to my life?

  • Value all your stakeholders and see them as partners;
  • Invest in organizational culture;
  • Make your decisions based on a long-term perspective;
  • Build your business with love and respect for society.

Did you like this summary of the book "Firms of Endearment"?

What did you think of this change in perspective?

Would you have the courage to break capitalist traditions and create or transform your business into a humanized company? Leave your comment, your opinion is very important to us!

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Book 'Firms of Endearment'