Companies Who Care Outperform All Others – Why?

Why do companies who focus on caring at a deep level for all stakeholders out perform the majority of companies who are operating according to well-honed, time-tested business practices?



In his book Firms of
, Raj Sisodia proves that success of any enterprise is built on a
foundation that goes deeper than what we do and how we do it. In the FoE (Firms of Endearment) companies,
terms like purpose, meaning, appreciation, joy, and yes, even love are not only
acceptable, they are critical in the corporate language and culture. And they are not reserved for internal use
only; they are attributes that are applied to all stakeholders–employees,
customers, suppliers, investors and society.

This is not a call to embrace a new paradigm based simply on
a touchy-feely justification that corporations should simply do the “right
thing.” This is about an in depth study
of firms that have out produced their peers and the market as a whole. The publicly traded FoE companies
studied returned 750% over 10 years
while the S&P overall provided a 128% return. What is even more telling is
that over the last 5 years, these same companies provided their investors 205%
return, when the S&P lost 13%. And
many of these companies are well known–Southwest Airlines, IKEA, Whole Foods,
Trader Joes, The Container Store to name a few.

What gives? Why does
having attributes such as caring, appreciation and love as part of the corporate
culture make such a difference?


It’s simple, actually.
As described in The Living Organization® model, the act of
producing goods and services is an act of transforming energy. The more energy
you have available and the more you focus that energy, the greater the
results. The attributes that are core to
the corporate culture of FoE companies set a context that allows for a greater
flow of energy through the system. This
energy is aligned and focused by their deep sense of meaning and purpose that
permeates through their whole stakeholder community.

It’s not so hard to understand how this happens. Think of the various relationships you have
had in your life, whether in business or personal. Think of those relationships where you felt
appreciated, truly appreciated. Now
compare those to relationships where you were simply having an interaction, a
transaction if you will. Which one gives
you more energy? Which one would your
prefer having more interactions with? Now turn it around. Don’t you
also experience more energy when you are being appreciative of what you are
doing and whom you are interacting with than if you were feeling dread about

Now magnify that energy to the size of a corporation who, as
a collective, truly appreciates their customers, each other, and all stakeholders. How much more energy do they have available
to them? How much more would customers
choose these Firms of Endearment, over other choices?


When you truly think of a corporation in the same terms as
other human interactions it is not so difficult to understand why FoE companies
would always outperform all other traditional companies. Perhaps you should think of your organization
more as a living organization rather than the traditional efficient machine of

Norman Wolfe
Quantum Leaders, Inc.
Executing Strategy


About the author

Throughout his professional career as a Chief Executive Officer, Corporate Director, and Advisor to CEOs, Norman Wolfe has successfully guided corporations through major transitions leading to substantial growth, market expansion and enhanced financial performance. Currently, he is the Chairman and CEO of Quantum Leaders, a leading edge consulting company guiding boards and CEOs to improve strategy execution