There is a difference between a successful business, and a great business. Usually…the difference is in the leadership. We believe good leaders take care of the business, but GREAT leaders take care of their employees. And that is where the difference lies.
By the way, this isn’t an opinion piece. The proof is in the pudding! If the pudding is the S&P 500, anyway.
This study in the Journal of Occupational and Environmental Medicine compared the stock performance of companies in the S&P to the stock performance of companies that won the C. Everett Koop National Health Awards. This award is given out by the Health Project Inc. The Health Project “focuses on improving personal health care practices and supporting population health by reaching adults where they spend most of their waking hours: at work.”
The question the study was trying to answer was: what would happen if you bought stock in the Koop Award winners during the month they won the award? The results were impressive.
Over a 15-year period, the S&P index had an average return of about 11% per year. In contrast, the companies that won the Koop Award for offering an outstanding workplace wellness program earned more than 26% per year. In essence, your money would have doubled every 3 years.
While it’s true that this is just a retrospective study that can only prove correlation (and as they told us in school, correlation does not equal causation), the results are definitely intriguing, to say the least. They point towards the conclusion that businesses that take care of their employees, are in fact taking care of the business as well.