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1-Page Summary of Firms of Endearment
What Is a “Firm of Endearment?”
As the population of the United States grows older, people are reaching a new level of maturity called “self-actualization”. This is the stage where they focus on serving others rather than being motivated by selfishness and ambition. More companies are building corporate cultures that value service to society even as they continue making money.
There are companies that people love because they’re great at what they do and treat their customers well. These companies, called “Firms of Endearment” or FoEs, are: Amazon, BMW, CarMax, Caterpillar, Commerce Bank, Container Store, Costco, eBay, Google, Harley-Davidson Honda, IDEO IKEA JetBlue Johnson & amp; Johnson Jordan’s Furniture LL Bean New Balance Patagonia REI Southwest Airlines Starbucks Timberland Toyota Trader Joe’s UPS Wegmans Food Markets and Whole Foods.
Companies that stay true to their core values are more successful. They create a bond with all the different stakeholder groups – society, partners, investors, customers and employees – by practicing these core values:
In order to align the needs, interests and expectations of all stakeholders (executives, employees and customers), companies should pay relatively modest executive salaries but give rank-and-file employees more in salaries and benefits than comparable companies. In addition, they should cultivate a culture of openness from the top down.
In order to be successful, companies should invest in training and development of their employees. They should empower all levels of employees with the ability to make decisions that will help customers. In addition, they should hire people who are passionate about what they do because it helps them retain better talent. Finally, companies need to create close relationships with both stakeholders and customers so that they can understand their needs better.
Marketing costs can be lowered while customer satisfaction remains high.
Companies can improve their performance by treating suppliers as partners and encouraging collaboration, honoring the letter and spirit of the law, viewing corporate culture as a great business asset, and resisting short-term pressures in favor of long-term business models.
The Emotionally Intelligent Company
In the past, capitalism was viewed as a cold and emotionless system. However, now it is seen in a new light with companies striving to develop strong relationships with their stakeholders. Traditionally, firms try to keep emotions out of business decisions but people are inherently emotional so businesses have emotions too. Firms that thrive in this environment know how to deal with those emotions by building an emotional intelligence into the company culture through awareness of everyone’s feelings.
Most companies are forceful and controlling in the face of challenges. However, firms that are admired tend to be open with their customers and let them build the company. For example, eBay’s customers have largely shaped how it has evolved since its inception. These companies also take responsibility for where they operate. For instance, Patagonia became the first California firm to commit to using only renewable energy and built its Nevada offices solely with recycled materials.
Working for Firms of Endearment
In an industry where margins are thin, Trader Joe’s and Wegmans pay their employees more than other companies. They also provide better benefits to part-time workers. Why? Because they want to attract the best talent, which is why they hire people who are passionate about food.
Some firms are more endearing than others. Some of them have great relationships with their employees, while some give employees the freedom to choose whether they want to join a union or not. These firms also create environments that make it unnecessary for people to join unions in order to protect themselves from unfair treatment. They also value transparency and treat all their workers with respect by giving them creative benefits, fun working conditions, and opportunities for growth through training programs and career development opportunities.
