Friday, May 25, 2007

Endearing Stakeholders

…Or a follow-up article about the “Stakeholder Rule.” I introduced it in the last post (below). You don’t have to peek ‘cause I’ll repeat it: A company’s position ought to take hold – and take place – in the minds of all its stakeholders. It’s an interactive approach to a brand. These days, every company should recognize that its branding is a two-way street; I used this in the earlier post in terms of employees particularly.

I thought several firms were doing a good job of involving their internal stakeholders (managers and employees). At the same time, I asked the members of my online discussion group to help identify other companies. Among the helpful answers was one from David B Wolfe, a long-time advertising pro who pointed me to his new book.

The book’s cover is pictured above, left: Firms of Endearment, published under the Wharton School imprint. When you go to the book’s website, you’ll see that Wolfe is one of the authors; Raj Sisodia and Jag Sheth make up the rest of the writing trio.

I’m not about to critique a book I haven’t read. But I have done two things: I read the Prologue and I read Chapter 1.

You can do these too – they’re good for your mind and they’re free. Form your own preliminary conclusion. (In fact, Wolfe has done an outstanding job of getting the book title onto the Web…you’ll find plenty of references and arguments via Google.)

What I like about what the story so far is that Wolfe and his co-authors have identified firms that have endeared themselves to their stakeholders. The authors have taken care to identify which groups make up the typical stakeholders of a given company.

The book names names: Southwest Airlines, Whole Foods, Starbucks and Trader Joe’s, for example. It presents cases (insofar as I can tell at this point) about why these firms and their brands work better in the modern capitalist world than others. The “why” seems to be better stakeholder interaction. The basic premise is stated early: This is not a book about corporate social responsibility. It is about sound business management.

Some of the material does have a New Age tinge that would otherwise make me shy away. The book hasn’t won 100% ratings from critics, like a review by PR executive Stephen Newton here. Newton calls the book’s title “twee,” Brit-speak for “overly precious, affectedly dainty.”

Considering Wolfe’s background, though, there’s value in his experience alone.

If you think there’s any importance to my Stakeholder Rule, you ought to at least preview Wolfe’s book. His premise isn’t quite the same, but Firms of Endearment appears to have some well-researched material that I’m looking forward to digging into.

I ordered it from Amazon.com (so you can relax, David – this month’s rent is secure).


Firms of Endearment: How World-Class Companies Profit from Passion and Purpose by Rajendra S Sisodia, David B Wolfe and Jagdish N Sheth. Wharton School Publishing, 2007. “Stakeholder Rule” © Richard Laurence Baron. All rights reserved.

3 comments:

David Wolfe said...

Thanks, Richard. We are already beginning to get some inquiries from marquis name organizations about their interest in morphing into an FoE. It is a new way of thinking about structuring companies and a new view of capitalism's role in serving society -- and yet, as you will find out when you read the book, charging business organizations with serving the common good is a quite old concept that we (actually British Parliament) pushed aside about 165 years ago.

Stephen Newton said...

I haven’t reviewed the book and make clear in my blog that I haven’t read it. I came across it after the Observer, a British national Sunday newspaper, featured it a short column that pokes fun at new jargon and management speak.

David Wolfe has explained to me that new jargon has become necessary because ‘capitalist fundamentalists associate [Corporate Social Responsibility] with New Agey, woolly-headed thinking’. I don’t think it will take them long to guess what FoE is all about even though the first thing you see on the book’s website is a chart boasting of how well FoEs outperform other firms: from the shareholder perspective. (‘Share of Heart’ is too New Agey sounding even for me.)

But having said that, if Wolfe is successful in persuading more firms to behave in a more socially responsible or endearing way, good for him.

Richard Laurence Baron said...

Thanks for your comment, Mr. Newton. I apologize for the implication, which is present in my post.

I do agree with you about the "New Age-speak" terminology, but I find that it goes away fairly quickly as I read the book. I definitely concur with your comment about the book title...and "Twee" is such a fine word I wish to see it spread here. David didn't disagree with me about that note. Like you, I wish him and his colleagues success with their approach.