My book, Grow the Pie: How Great Companies Deliver Both Purpose and Profit, was published in 2020 (order link). I wrote the book out of concern for the increasing polarisation between business and society that the world finds itself in. Some businesses see exploiting society as the best route to increasing profits – cutting worker wages, hiking prices for customers, or polluting the environment. But equally, some reformers see businesses as the enemy of society and attempt to straitjacket them through regulation – when business can be a force for good, and profits are critical to provide returns to savers.
This polarisation is an example of the pie-splitting mentality. Under this view, the value generated by capitalism is a fixed pie. Any slice given to stakeholders is at the expense of profits (and so some CEOs minimise society’s share); any profits are viewed as extracting from society.
This book is about the pie-growing mentality. This view stresses that the pie is not fixed. By investing in stakeholders, a company doesn’t reduce investors’ slice of the pie – it grows the pie, ultimately benefiting investors. A company may improve working conditions out of genuine concern for its employees, yet these employees become more motivated and productive. A company may develop a new drug to solve a public health crisis, without considering whether those affected are able to pay for it, yet end up successfully commercialising it. A company may reduce its emissions far beyond the level that would lead to a fine, yet benefit because customers, employees, and investors are attracted to a firm with such values.
So in the face of the conflict between business and society, this is a fundamentally optimistic book. Yet this optimism is not based on blind hope, but on rigorous evidence that this approach to business works for both investors and stakeholders, real-life examples spanning industries and countries, and an actionable framework to turn it into reality.
The website gives a synopsis of the book, chapter outline, reviews, interviews, and teaching slides. It also contains a blog on events related to the book that have taken place since I finalised it.
The book was named to the Financial Times Business Books of the Year, 2020 and won the FT/ISFFC Award for Excellence in Sustainable Finance Education, 2021.
- Citation: Edmans, Alex (2020): Grow the Pie: How Great Companies Deliver Both Purpose and Profit. Cambridge University Press (Cambridge, UK)
- The paperback version, published in November 2021, is thoroughly updated for the pandemic, the latest research, and new insights on putting purpose into practice learned from discussing the book with companies and investors over 18 months since the launch of the hardback. A summary of the changes is here.
- A short summary is in Edmans, Alex (2020): “Company Purpose and Profit Need Not be in Conflict if We ‘Grow the Pie’” Economic Affairs 40(2), 287-294, June 2020.
- A review by Professor Christina Skinner, of Wharton’s Legal Studies and Business Ethics department, is in “Cancelling Capitalism?” Notre Dame Law Review 97(1), 417-440, December 2021.
- A Korean translation, entitled “ESG 파이코노믹스”, was published in 2021 and available here.
- A Chinese version, entitled “蛋糕经济学：如何实现企业商业价值和社会责任的双赢”, was published in 2022 and available here