Grow the Pie Quotes

“Pieconomics seeks to create profits only through creating value for society. Doing so may generate more profits than pursuing profits directly, and more value for stakeholders than sacrificing profits would.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“Pie-splitting increases one member’s slice by reducing others’. Most commonly, companies may increase profits by price-gouging customers or exploiting workers. But the pie-splitting mentality may also be held by stakeholders, who think cutting profits is the best way to increase their own slice.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“The pie represents the value an enterprise creates for society. Society includes not only investors, but also colleagues, customers, suppliers, the environment, the government and communities. If companies consider only investors and ignore stakeholders, they’ll lose their social licence to operate – as they may already be doing.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“62% of millennials (born between 1980 and 1996) agreed that ‘it is important for me to be known for making a positive difference in the world’, versus 52% of Generation X (born between 1965 and 1979).31 Yet millennials also recognise the importance of profits – 58% agree that ‘the successful business of the future will maximise shareholder value/profits’, versus 51% of Generation X.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“citizens and junior employees can grow the pie, whereas only senior management controls the purse strings and can decide where to spend a company’s cash.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“there’s any silver lining to the crisis, it’s that it will permanently lead to a shift in thinking about what responsible business entails – from splitting the pie by spending money to growing the pie by innovatively using what’s in our hand.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“the problem with viewing responsibility as only about splitting the pie is that many companies don’t have pie to share, particularly in a pandemic.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“many companies can’t afford to practise CSR. CSR is often viewed as throwing money at a problem”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“by committing to create profits only through creating value for society, pie-growing firms help rebuild trust in capitalism – recall a trustworthy enterprise is one that uses its expertise and resources to address society’s challenges.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“That businesses should ‘do no harm’ – curb their negative externalities – has long been recognised. This is how CSR has typically been practised. But Pieconomics stresses that companies should actively do good.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“As a society, we’re facing challenges of a scale and complexity that capitalism as we know it is struggling to address. Some of these problems are partly or predominantly caused by business – income inequality, resource usage, climate change and the replacement of workers with machines. The consequences that enterprises exert on society, but don’t feed back into profits, are known as externalities. If companies don’t drastically reduce their negative externalities, they’ll lose their social licence to operate – as the increasing populism shows they are already doing. This may lead to anti-business regulation that will damage their long-term productivity.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“the 2020 Edelman Trust Barometer found that 56% of respondents believe that capitalism does more harm than good in the world.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“So in 2011, when Nokia needed to lay off 18,000 employees due to difficulties in its mobile phone business, it had learned its lesson. It launched the Bridge programme, giving these workers five potential paths forward: finding another job within Nokia, finding another job outside Nokia through outplacement, starting a new business, taking business or trade courses, or building a new path such as volunteering – the last three funded by grants from Nokia.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“The negative publicity cost Nokia an estimated €700 million of sales and €100 million in profits over 2008 to 2010.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“Nokia did little to soften the blow, and this failure ultimately hurt the company.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“2008, Nokia faced stiff competition from low-cost Asian rivals, which had driven prices down by 35% in a few years. Over the same period, labour costs in Nokia’s plant in Bochum, Germany, had risen by 20%. Nokia decided to close Bochum. The closure may well have grown the pie – without it, Nokia’s long-term viability may have been jeopardised.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“As we’ll stress in Chapter 3, Pieconomics isn’t an excuse to shy away from tough decisions. Safeguarding all jobs would have been irresponsible as it would have endangered Airbnb’s long-term survival and the livelihoods of all colleagues. However, Airbnb ensured it took this commercially necessary decision in a humane way. It gave at least 14 weeks’ severance pay to all displaced workers even though none is required in the US,”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“Every colleague, from secretary to CEO, was required to take four weeks of unpaid vacation. Leaders took an extra hit as bonuses were suspended. As Bob said: ‘It’s better that we should all suffer a little than any of us should have to suffer a lot.’ By the next year, Barry-Wehmiller still hadn’t laid off a single colleague. Not only did it safeguard its workers’ jobs, but it also ensured their free time was used productively by putting on classes at its corporate university.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“Every colleague, from secretary to CEO, was required to take four weeks of unpaid vacation. Leaders took an extra hit as bonuses were suspended. As Bob said: ‘It’s better that we should all suffer a little than any of us should have to suffer a lot.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“Just as a pie-growing enterprise shares the gains from pie growth, it also shares the losses from pie shrinkage.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“While CSR instructs a company to ‘do no harm’, many pie-growing actions hurt at least one stakeholder.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“active steps to ensure that a theorem becomes reality. A pie-growing enterprise first grows the pie and second tries to ensure that no member’s slice shrinks.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“This harmonious outcome is known as a Pareto improvement, after Italian economist and political scientist Vilfredo Pareto.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“The famous Coase theorem,27 thanks to the Nobel Prize-winning economist Ronald Coase, shows that when the pie grows, it’s always possible to find a way of compensating those whose slices would otherwise fall, so that no member loses and at least one benefits.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“But without the prospect of rewards upon success to balance the risk of failure, leaders may coast and settle for the status quo – an error of omission. An unequal distribution of something is almost always better than an equal distribution of nothing.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“Without the prospect of profits in the rare case of success, companies could never justify exploring a new idea. As Merck’s current CEO, Kenneth Frazier, points out: ‘The price of [a] successful drug is paying for the 90%-plus projects that fail. We can’t have winners if we can’t pay for losers.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“The importance of the size of the pie, rather than just its division, is linked to another important distinction – between ex ante (before the event) incentives and ex post (after the event) outcomes”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“that profits are only one slice of the pie is an important contrast to ‘de-growth economics’. Advocates of this view argue that economies shouldn’t grow too fast or create too much value, otherwise we’ll exceed planetary boundaries such as resource constraints or temperature thresholds.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“This positive view of profits suggests that we should rethink the concept of ‘stakeholder capitalism’. It’s become an extremely popular term, yet has no official definition24 in any dictionary or Wikipedia. It’s commonly interpreted as giving stakeholders equal priority to shareholders so that they get more of the pie at the expense of profits – akin to ‘anti-shareholder capitalism’. But again that’s based on the pie-splitting mentality. A responsible business absolutely needs to ensure that value is fairly shared, but it’s even more important to create value in the first place.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised

“But defeating Amazon didn’t mean that Queens won. Everyone lost because the pie shrank. The division of the pie is certainly important, and we’ll turn to this shortly, but the spoils can be shared only if there are spoils to begin with.”
― Alex Edmans, Grow the Pie: How Great Companies Deliver Both Purpose and Profit – Updated and Revised