Grow the Pie: How Great Companies Deliver Both Purpose and Profit
New Book by leading LBS Professor Alex Edmans sets out a radical new approach to embed purpose in practise
Why This Book Matters:
The book is receiving extensive acclaim - ‘A tour de force,’ Andy Haldane, Chief Economist, Bank of England; ‘Powerful and persuasive,’ Oliver Hart, 2016 Nobel Laureate in Economics; ‘Read it: it will challenge how you think,’ Will Hutton, Observer columnist
The ‘pie-splitting’ mentality – a crisis in capitalism
Capitalism is in crisis. Alex Edmans’ radical new book reveals a pioneering approach to solve it – moving away from a ‘pie-splitting’ mentality and advocating a new ‘pie-growing’ mentality.
The book explores how business has lost the public’s trust - profits and executive pay have soared while incomes of average workers have been flat. Companies have made outsized returns, paying little attention to customer welfare, worker rights or climate change. Business is no longer working for ordinary people, or the planet. Citizens – and the politicians who serve them – are fighting back.
However, Edmans believes many calls to reform business are extreme. They fail to recognise the positive role that business can play in society and view business as the enemy.
Growing the Pie - a pioneering new approach
Grow the Pie sets out a radically different approach – by applying it, companies can create both profit for investors and value for society.
It dismantles the pie-splitting mentality: the idea that the value a company creates is a fixed pie, and this pie can either go to investors or society.
Alex Edmans instead advocates the pie-growing mentality. The value that a company creates is not fixed but can be increased. By running a business to serve a social purpose – to improve human health, help citizens save for retirement, or farm food sustainably – companies aren’t sacrificing profit, but generating profit as a by-product of serving society.
An evidence-based solution
Grow the Pie presents rigorous evidence that both sides benefiting isn’t a “too good to be true” pipedream, but realistic and achievable.
It lays out an actionable framework to put purpose into practice, explaining how managers, investors, and policymakers can reform business to serve society, and also how citizens can play their part.
The book presents the world’s highest-quality evidence on controversial topics such as executive pay, shareholder activism, and share buybacks – uncovering many surprising results and showing that they can in fact be used for social good.
Alex Edmans is an experienced writer and speaker who is frequently interviewed live on TV. He is available for interview, comment or expert advice pieces on a number of subjects, including:
Grow the Pie: How Great Companies Deliver Both Purpose and Profit by Alex Edmans,
published by Cambridge University Press is out in hardback 26th March 2020, priced at £18.99.
About The author: Alex Edmans
Alex Edmans is Professor of Finance at London Business School and a leading authority on reforming business to serve the common good – but using solutions based on rigorous evidence and recognising the importance of both investors and stakeholders. He has spoken at the World Economic Forum in Davos, testified in the UK Parliament, and given the TED talk 'What to Trust in a Post-Truth World' (which has received 1.7 million views) and the TEDx talk 'The Social Responsibility of Business'.
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