A Firm of Endearment is run in such a way that its stakeholders – customers, employees, suppliers, business partners, society and many investors – develop an emotional connection with it, an affectionate regard. Stakeholder Relationship Management is therefore the most efficacious way to achieve sustained superior business performance in years to come and to develop a significant and lasting competitive advantage. seeks to maximize its value to society as a whole, not just to their shareholders; Companies are held accountable for their humanistic as well as their economic performance. creates emotional value, experiential value, social value and of course, financial value. Combines the emotive dimension with operational efficacy. In fact, the emotive dimension is actually more revealing in drawing a company’s future performance.
1. Firms of Endearment 5 major stakeholders: SPICE Society: local and broader communities as well as governments and other societal institutions, especially NGOs. Partners: upstream partners such as suppliers, horizontal partners, and downstream partners such as retailers. Investors: individual and institutional shareholders, lenders. They need assurance that the company has a viable long run plan for growth and continued profitability Customers: individual and organizational customers; current, future and past customers. They need a feeling of gaining superior value from your offering. Employees: current, future and past employees and their families. : They need to believe in their company’s mission, vision and values. It’s not the Share of Wallet; It’s the Share of Heart (that provides share of wallet)
15 characteristics of highly profitable FoE’s 1. Firms of Endearment How de we perform? Who is responsible? 1.They actively align the interests of all stakeholder groups, not just balance them. 2.Their executive salaries are relatively modest. 3.They operate an open door policy to reach top management. 4.Their employee compensation and benefits are significantly greater than the standard for the company’s category. 5.They devote considerably more time than their competitors to employee training. 6.Their employee turnover is far lower than the industry average.
15 characteristics of highly profitable FoE’s 1. Firms of Endearment How de we perform? Who is responsible? 7. They empower employees to make sure customers leave a transaction experience fully satisfied. 8. They make a conscious effort to hire people who are passionate about the company and its products. 9. They consciously humanize the company experience for customers and employees, as well as the working environment. 10.They project a genuine passion for customers, and emotionally connect with customers at a deep level. By earning a larger share of customers’ hearts, they earn a larger share of customers’ wallets.
1. Firms of Endearment How de we perform? Who is responsible? 11.Their marketing costs are much lower than those of their industry peers, while customer satisfaction and retention are much higher. 12. They view suppliers as true partners and encourage suppliers to collaborate with them in moving both their companies forward. 13.They honor the spirit of laws rather than merely following the letter of the law. 14.They consider their corporate culture to be their greatest asset and primary source of competitive advantage. 15.Their cultures are resistant to short-term, incidental pressures, but also prove able to quickly adapt when needed. 15 characteristics of highly profitable FoE’s