What the Changing Fortune 500 Tells Us About Empathy
Everyone’s familiar with the Fortune 500 and the clout and prestige it brings. Fortune Magazine first started the list way back in 1955, naming the companies with the highest revenue in the U.S.
Much has changed since the first list, and it’s important to look at the companies growing and shrinking, which is covered in an article by Tyler Durden in Zero Hedge. The article provided me with some key insights into why some brands were succeeding while others were not.
- Only 62 percent of the companies on the 2017 list had positive revenue growth for the three years prior.
- One hundred ninety of the Fortune 500 experienced negative growth.
- Businesses have changed dramatically since the Fortune 500’s first list.
- Fast growers may be doing well because of empathy.
What’s Changed Since 1955?
There are a million answers to this question. But let’s start with the fact that the life expectancy of a company in 1955 was 75 years.
By 2015, that number had dwindled to 15 years. Failure for businesses has been quickly accelerating, thanks in part to the modern digital world. Of course, it’s harder to start a company now than it was when the first Fortune 500 list debuted. It’s hard to get capital and investors. Original ideas are sparse, and making an impact on an audience is extremely complicated.
So, what’s the magic recipe for those companies that are growing instead of shrinking? Is it because they have a great CEO?
Leadership certainly has something to do with it. Is it purely related to delivering an exceptional product? Sure, that’s part of it as well, but customers are drawn to brands for other reasons, like wanting to do business with purpose-driven brands. Are engaged employees that care about their job, the secret ingredient? Yes, that matters as well.
But what do each of these attributes really have in common? It’s empathy.
The best leaders are empathetic people who have compassion for their employees and customers. Customers respond better to brands when they have meaningful connections, fueled by empathy. And employees are truly engaged in a culture that supports and encourages empathy.
How Empathetic Is the Fortune 500’s Fastest Grower?
According to Durden’s analysis, XPO Logistics was the fastest-growing company in 2017. It had a compound average growth rate (CAGR) of 230 percent!
Much of this growth was attributed to acquisitions made in 2015, which propelled the company to first make the list in 2016 with $7.6 billion in revenue. This organization tapped into technology to revolutionize transportation and logistics services. With such a large company, how is it possible they’ve bought into empathy in the workplace?
Here are some compelling things about how they brand themselves, which leads me to believe they have.
They define their ability to provide services because of technology, assets, and people, indicating they understand that their people are instrumental in delivering solutions. Further, they call their company one with a service-driven culture. They say customer relationships are the lifeblood of their business. Interestingly, they say relationships here and not just customers.
I also find noteworthy the values they have chosen for their company. One is an entrepreneurial spirit. They are a multibillion-dollar company, yet they are constantly asking, “what if?” and reaching for more.
Another value mentioned is respect, which they explain as listening to employees, customers, and partners. Being a great listener is key to empathy.
Still another value is inclusiveness, and they celebrate individuality. They proudly say they welcome anyone who has passion and ideas.
This company is in an industry that’s rapidly changing, as how we transport goods from point A to point B has evolved. They have grown strategically from just a $150 million company nine years ago with a new owner in Brad Jacobs. He expanded the company, broadening business into contract logistics, last mile, and less-than-truckload (LTL). Now, the company is pivoting again.
Just recently, there have been murmurs and rumors about the company selling off some of its business units in favor of focusing on the LTL industry. The leadership of this business is not afraid to take chances to serve its customers and employees better.
Although I have no intel on if empathy is part of XPO’s success, it certainly seems to be part of their culture, whether it was conscious or not.
Does the Biggest Shrinker Lack Empathy?
On the other side of the equation, we have the company that declined the most, Hess. The oil and natural gas company’s revenue fell by 58 percent. Obviously, the energy business is still extremely lucrative, and Hess has been around since 1919. Its stock has also performed well, but the Wall Street Journal equates that to its stake in a South American oil project. This comes after the company lost billions from 2014 to 2018, leading to mass selloffs and further diversification.
What’s interesting about Hess is that the CEO is the son of the founder. It’s a public company but still family-run. Hess has its own set of company values, some of which aren’t too different than XPO. It’s certainly possible that the substantial revenue losses were simply due to a changing market and have nothing to do with a lack of empathy.
From a consumer perspective, oil companies typically don’t elicit warm and fuzzy feelings. The biggest indicator I see of lack of empathy is possibly that there are no new perspectives, considering it’s been run by the Hess family since its inception. Maybe the company is too traditional with its organizational charts and hierarchy. These are all just presumptions, but one thing is for sure: every company can learn from empathy.
Empathy has proven time and time again to boost company performance. Employees are happier. Customers feel like they matter, and profits rise. So, what are your thoughts about empathy and its ability to grow or shrink a company? Dig deeper into this question and more by getting your copy of Mean People Suck. Order now and get the bonus visual companion guide. Please check out our services that can help you evolve your culture, or find out how to book me to present to your team on empathy.