Beloved Companies Outperform the S&P 500

Be·lov·ed: Adjective: greatly loved; dear to the heart.

A beloved company is financially prosperous. And we have the financial data to prove this.

Do I have your attention?

I am an enormous fan of the work completed by Jim Cramer and Danny Meyer in crafting what they call the “Hospitality Index.” Their hypothesis is congruent with mine; that companies who grow by moving in the direction of their employees and customers earn the right to long term organic growth. Growth that is immune to the competition. Growth fueled by legions of fans that will grow your business for you. I call these companies “beloved” because of the emotional bond and pull that drives both financial prosperity and prosperity of the human spirit. Employees want to stay and be a part of growing these companies – and customers want to associate and engage with organizations that choose to conduct themselves in this manner.

As I have mentioned previously, there is often cynicism that doing the right thing yields financial results. “Golden Rule” behavior as Colleen Barrett, President Emeritus of Southwest Airlines (LUV) calls it. And I couldn’t be more pleased to promote this research proves the cynics wrong.

Their list of companies, who they call ‘hospitable’ in their behaviors, is in lockstep with how I define a ‘beloved’ company. And they all perform

Not only did these companies beat the S&P 500 performance from 2009-2012 – they whooped it! Returning a 257% return in growth vs. a 65% return… hopefully these results will finally begin to quiet down the critics and cynics of the so-called “soft” customer “stuff.”  It is a profitable and prudent growth strategy to focus on customers and employees.    There is no challenging these market results.