Grow the Pie
How Great Companies Deliver Both Purpose and Profit
What is a responsible business? Common wisdom is that it's one that sacrifices profit for social outcomes. But while it's crucial for companies to serve society, they also have a duty to generate profit for investors - savers, retirees, and pension funds. Based on the highest-quality evidence and real-life examples spanning industries and countries, Alex Edmans shows that it's not an either-or choice - companies can create both profit and social value. The most successful companies don't target profit directly, but are driven by purpose - the desire to serve a societal need and contribute to human betterment. The book explains how to embed purpose into practice so that it's more than just a mission statement, and discusses the critical role of working collaboratively with a company's investors, employees, and customers. Rigorous research also uncovers surprising results on how executive pay, shareholder activism, and share buybacks can be used for the common good.
Packed with research, complemented with practical ideas
I thoroughly enjoyed this book: inspirational and packed with thorough academic papers that show two sides of the story. The framework presented for companies to create impact while delivering on their purpose and making a profit is practical and addresses the oft repeated limitation expressed by business leaders, “I need to meet shareholders’ expectations”. I also appreciated that it referenced other related economic theories on the topic, including Friedman’s “shareholders’ interests are paramount”, and presented how the Grow the Pie framework is different. A highly recommended reading in this current times!