The executives profiled in my book Peerless each viewed their work and careers as platforms for serving their employees who, in turn, were dedicated to their customers. How else would George Martinez start in the banking business as a startup and ultimately build Sterling Bank (now Comerica Bank) in Houston into a financial and best workplace before retiring in 2004. A life-long student of leadership, here is an excerpt from page 8: Martinez ponders the causes and consequences of executive decision-making and how it affects today’s world. He sees business as the most powerful of world institutions whose behavior is reflected and felt by all parts of society. Religion may once set the rules people followed, governments may have passed laws, but today he believes that business sets the tone and example that moves the world.
Some say that we in business are at the forefront of a global transformation of corporate leadership models. Hints of that have been chronicled by Daniel Pink ( Drive, Free Agent Nation) and Jim Collins ( Built to Last, Good to Great). In addition, here’s what the authors of Firms of Endearment ( FoE ) say about that:
“Numerous consumer surveys reveal that people are increasingly looking for higher meaning in their lives than simply adding to the store of things they own. This is a significant trait of people in midlife and older who are not battling basic survival issues, either materially or emotionally. The search for meaning is changing expectations in the marketplace and in the workplace. Indeed, we believe it is changing the very soul of capitalism.”
In Peerless our cover design evolved from the executive interviews. The design suggests a TRUE North bearing is the way. It’s my label for the practice of holding true to an organization’s purpose. What you notice in the case of these FoE companies is that they go beyond declaring their convictions on posters or displaying them on their intranet.
Here’s another story from Firms that dispels the classic notion that reason is superior to emotions: “Assuming sound management is in place, we argued that Company A will outperform Company B in the long term if its stakeholders regarded it with greater affection than do the stakeholders of Company B. Company A’s margins are likely to be greater than Company B’s. Consumers will pay more for Company A’s products because they love the company and its products. The outdoor apparel and equipment maker Patagonia discovered this. A much-loved company, Patagonia’s customers pay an average premium of 20% or more over competitors’ prices. This helps to produce a gross profit margin of close to 50%.”
A TRUE North bearing suggests a corporate purpose beyond the classic model of profit maximization. The irony is that employees and customers are more attracted to Company A … a la Disney, 3M, Amazon.com, Costco, The Container Store …