If Christ ran a business, would it be profitable?

Our research says yes—emphatically so.

By Bill Fotsch and Christos A. Makridis

If you’re a Christian, you likely think about striving to be more Christ-like. If you’re a Christian in business, you might have wondered how Christ would run a business. We certainly have. And when we took this question seriously, we began to develop a consensus around Christ-like business principles:

• Serving Customers This is the starting point. Serving others is the basis of the Christian life, so we saw this as foundational. Serving others is a noble pursuit for any business.
• Clarity of Purpose Building on the first principle, this incorporates the economics of running a business so the company can sustain itself. It aligns all employees in a common understanding of what defines success for the company, uniting everyone in a common cause and empowering them to make good decisions.
• Transparency This enables all employees to see how the company is doing and learn from successes and failures. Transparency reduces the temptation to do something immoral, since everything is in the open.
• Sharing the Wealth As employees improve the company, more wealth is created. Broadly sharing the wealth they create isn’t just fair; it gives all employees a shared stake in the results, making them economic partners in the company.
• Employee Participation Any Christian will agree that how we act as Christians is more important than what we profess. Active involvement further galvanizes the entire team, nurturing an atmosphere of community, partnership, and connectedness—like the body of Christ.

Testing the profitability of Christian principles

With the help of Harvard Business School Professor Dennis Campbell and his research associate Iuliana Mogosanu, we developed a research instrument to test the hypothesis that companies applying these five principles significantly outperform their peers. In development, we emphasized that the survey tool be well-defined, objective, and repeatable. Both the philosophy and the research tool are called Economic Engagement.

10 waves 50-150 companies

Over 4 years, we conducted 10 waves of research with roughly 50 to 150 companies per wave. We were surprised, both at how consistent the results were, wave after wave, and how dramatic the difference in profitability was.

Our initial research, as outlined in this Inc. Magazine article, shows that the opportunity for most companies is to double their profitable growth versus their peers. This was reinforced by our research on employee engagement, corporate culture, and firm performance, which found these correlations to be robust even after controlling for differences across companies (e.g., number of employees and size). The results of seven of the ten waves of research follow:

The Top Quartile, Average and Bottom Quartile were established by ranking companies by their overall Economic Engagement scores. Percentages represent profit increase from 2017 through 2019. The groups represented across the top are:

• American Family Clinics
• California Restaurant Association
• Members of the National Center for Employee Ownership
• Companies affiliated with Verne Harnish’s Scaling Up
• Swiss B-Corp companies (our thanks to St. Gallen Business School in Switzerland and special thanks to Gabriel Cretier, research associate at St. Gallen Business School, for providing our first Economic Engagement benchmark research outside of North America)
• Precision Machine Products Association members
• HARDI members, HVAC industry association

Each participating company received a report on its overall Economic Engagement ranking and individual performance in each of the five drivers of Economic Engagement. A sample report is below:

The report provided each company a clear direction for improvement. For example, the sample company ranked well on employee participation, but held a poor performance in customer engagement; focusing efforts there would likely yield a high return.

Economic Engagement longitudinal research

We have also begun longitudinal research to complement our existing horizontal research, using the survey as a diagnostic tool. We started by identifying companies who had outstanding, industry leading results for at least three decades. Assuming no leader, product, patent or market position could maintain superior performance for over thirty years, we could conclude that the management system, or “mechanisms” as Jim Collins put it, which transcend any one individual, were the primary driver of their success.

We continue both longitudinal and horizontal research, studying companies in what we are calling the Really Great Group. Each of these companies, large, midcap, and small, have led their respective industries in performance for over 30 years. Each of them has their own story. For example:

1. Connor Group has provided their investors with an annual return on investment of 28% for 37 years, rising to 33% in the last 10 years.
2. Abbott was the only company featured in Jim Collins’ book Good to Great to continue to exceed the stock growth of the S&P 500 by more than double in the 25 years after the book was published.
3. Universal Engineering had stock growth more than double that of the S&P 500 for over 50 years since its inception.
4. COSTCO has outperformed Walmart in profit growth since its inception. Walmart was the strongest performer in the last 20 years of the 18 companies identified in Jim Collins’ Built to Last.

Beyond their business success, these companies are admired by their customers, employees, investors, and collaborators. And beyond serving customers and providing a great place to work, many of these companies fund significant philanthropic efforts—for instance, the Connor Group recently provided $35 million to fund a new K-12 school in an underserved community.

What struck us are the Economic Engagement scores of these companies. Remember, we selected these companies just based on superior business performance. What our results show is, as a group, they are on the high end of Economic Engagement performance as well.

It’s clear that superior longer-term performance correlates with strong Economic Engagement. Both our horizontal and longitudinal research confirm that running a business with Christ-like principles compounds good financial results. If Christ ran a business, it would be profitable. God created a world of abundance. Abiding by Christian principles leads us to that abundance.

In this spirit, we invite you to collaborate with us in one or more the following:

1. We encourage you to participate in the next wave of our research. Simply click on this link: Catholic Men of America Economic Engagement Survey. It should take about 10 minutes. All information will be confidential, and you will receive a report so you can see how your results compare to other Catholic participants.
2. Suggest a company you know that has had outstanding result over more than 30 years that could add to our longitudinal research. Suggestions should go to natalie.disney@EconomicEngagement.com
3. If you have any specific questions or suggestions, please forward them to natalie.disney@EconomicEngagement.com

Authors

Bill Fotsch is a business coach, private company investor and founder of Economic Engagement LLC. He has helped more than 400 companies improve business results, employee engagement and increase customer retention over the past 30 years. Bill has a Bachelor of Science degree in Mechanical Engineering from Marquette University and an MBA from Harvard Business School, where he graduated as a Baker Scholar. bill.fotsch@EconomicEngagement.com

Christos A. Makridis is a computational social scientist, entrepreneur, and policy adviser. Among several academic appointments, he is the CEO/co-founder of Dainamic, a data science startup that focuses on producing actionable and meaningful insights from data, particularly for mid and small sized businesses. Christos holds doctorates in economics and management science & engineering from Stanford University. christos@dainamic.ai