Good Company: A book review by Bob Morris

Good Company: Business Success in the Worthiness Era
Laurie Bassi, Ed Frauenheim, Dan McMurrer, with Larry Costello
Berrett-Koehler Publishers (2011)

How and why companies must prove worthy of consumers’ business, employees’ best efforts, and investors’ dollars

What’s in a word? That depends on which of its connotations is selected. For Jim Collins, the word “good” refers primarily to organizational performance over whereas, for the authors of Good Company, the word refers to worthy behavior. And Laurie Bassi, Ed Frauenheim, and Dan McMurrer (with Larry Costello) assert in the Preface to their brilliant book that there is a new chapter in our economic history, “the Worthiness Era.” Of course, as Collins explains in Good to Great, each of the eleven companies was deemed “great” based on its organizational performance (i.e. three times the market over fifteen years) at that time. They were (if some no longer are) also renowned for their worthy behavior insofar as having (as the co-authors explain it) “a purpose that goes beyond making money” is concerned and reframed “their fundamental aims to be a wide circle of stakeholders rather than merely enriching shareholders.”

Bassi, Frauenheim, and McMurrer provide an abundance of information, insights, and counsel that can help business leaders to understand what their companies must do to achieve their strategic objectives. For example, in Parts I and II:

o  A convergence of forces that is giving rise to a new era: The Worthiness Era
o  Four economic forces that are increasing the premium on being a “good company”
o  Four fundamental social forces that are increasing the premium on being a good company
o  Three fundamental, broadly defined political forces that are increasing the premium on being a good company
o  How and why “doing well by doing good”
o  The Good Company Index: What it is, how it’s determined, and what it reveals
o  How to assess the companies you do business with

In Part III, the focus shifts to an explanation of the essentials of becoming and then continuing to be a good company. More specifically, a value-creating organization committed to employees, one with sound data analysis, and unified and energized by an inspiring purpose. I was especially interested in what the co-authors have to say about corporate stewardship. It consists of effective leadership driven by fiduciary responsibilities with fundamental aims within “a wide circle of stakeholders rather than merely enriching shareholders.” Then in Part IV, Bassi, Frauenheim, and McMurrer provide a glimpse into the future of worthiness, “including how the concept dovetails with the rise of Asia as an economic power.”

FYI, in Chapter 6, the rankings of publicly traded companies in the Fortune 100 on the Good Company Index are provided. The co-authors describe how to assess qualitatively other companies outside the Fortune 100 with which they do business as a consumer, investor, and employee. There are separate ratings for Good Employer, Good Seller, Good Steward, and Overall Good Company. I agree with Bassi, Frauenheim, and McMurrer: “Bad companies won’t be invited into the new world taking shape. They will wither. Good companies, though, will find themselves welcome. And they will flourish.” It is no coincidence that each year for several years, the annual list of the most highly admired companies, those rated the best to work for, are also among those listed as most profitable. Heraclitus was correct: Everything changes…nothing changes.

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