Our research indicates that kindness isn’t simply a matter of ethics – it’s a no-nonsense business issue too. If your firm is considered kind, it is likely to have stronger growth than a firm considered unkind.
For these calculations we are using companies’ earnings before interest, taxes, depreciation and amortization (EBITDA). 47% of companies considered kind doubled their EBITDA in the decade to 2022. Just 35% of unkind companies did.
"This strong, clear correlation demonstrates that being kind isn’t a well-meaning but woolly aim – there are clear business reasons to ensure your firm is kind, and is perceived to be kind."
Anya Davis, Baringa
In almost all circumstances, kind companies outperform unkind ones.
34% of companies considered unkind experienced negative EBITDA growth over the decade to 2022. Just 28% of kind companies did.
No matter which way you cut the data, kind firms are more likely to enjoy higher performance.
We consider 5% annual EBITDA growth to be a minimum benchmark for almost any firm. Companies considered kind are significantly more likely to achieve this.
"Kindness is not the sole criterion for business success, and some unkind firms can thrive. But if your company is considered kind it is more likely to enjoy stronger growth.
"This suggests a lesson for business leaders: when setting strategies, ensure you weigh up kindness and the perception of kindness, alongside ‘harder’ business metrics such as cost, price and margin.
"Alternatively, kindness can be used as a lens to challenge business decisions. Once you have provisionally decided on a course of action, take a step back and ask whether that course of action is also kind. If it is not, amend or reconsider."
- Anya Davis, partner, expert in energy and resources
Methodology
In Spring 2023 Baringa commissioned survey firm Censuswide, who surveyed 6,028 people in 7 countries. As part of this survey, all respondents were asked to name a company they considered “kind” and a company they considered “unkind”.
Baringa then gathered EBITDA data for the period 2013-2022 for all these companies where it was able to find such verifiable, public, published information.
Our findings show a strong correlation between kindness and relative strength of EBITDA growth but the precise causation is a matter for debate.
EBITDA performance figures
|
EBITDA performance |
Companies perceived to be kind |
Companies perceived to be unkind |
|
Extremely well performing |
50% |
36% |
|
Well performing |
6% |
4% |
|
Moderately well performing |
3% |
6% |
|
Fairly well performing |
4% |
10% |
|
Poorly-performing |
7% |
7% |
|
underperforming |
29% |
36% |
Performance criteria referenced in the above table were based on the following categories, which Baringa created for the purposes of simplicity:
- Greater than 80% EBITDA growth over the decade, the company is extremely well performing
- Between 60% and 80%, the company is well performing
- Between 40% and 60%, the company is moderately well performing
- Between 20% and 40%, the company is fairly well performing
- Between 1% and 20%, the company is poorly performing - Below 1%, the company is underperforming
Our Insights
Introducing the Economics of Kindness
At Baringa we’re convinced that, no matter the macroeconomic backdrop, kindness in business really does pay. That’s why we’re taking this opportunity to explore the economics of kindness across four pillars: people, business, leadership and investors.
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People – planet – profit, in that order
The notion of a ‘triple’ bottom line – people first, then planet, then profit – is reshaping how organisations around the world do business. They’re bringing corporate kindness to the fore as we enter a new type of economy, and the businesses that organise themselves in this way will be the ones that succeed.
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Why being community-focused is essential for survival
Why wouldn’t businesses be community-focused? Especially if you consider your communities as customers? Andrew Reaney shares his personal experiences of why being community-focused is essential for survival
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Building brands through kindness
Does employee welfare and personal happiness lead to increased productivity and profit? Baringa and Ella’s Kitchen discuss the role of kindness in its rapid growth and how companies can help overcome the rise in loneliness.
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Consumers confirm: kindness pays
To get the public's view on the economics of kindness, Baringa commissioned a global survey to understand how perceptions of kindness affect purchasing decisions.
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Is kindness authentic?
We talk to four leading commercial semioticians to understand more about kindness and what businesses should do about it.
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Redefining kindness in the workplace
Corporate kindness is all about the impact an organisation has on the world, engaging in responsible practices that benefit their customers, employees, and the communities they operate in.
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Kindness can help you make decisions
Consumers vote with their wallets by choosing what they buy and who they spend with. Businesses can choose their suppliers, who they work with, and which markets they serve. Employees can choose who to work for and which career path to take.
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Clarity and self-accountability: The cornerstones of kind leadership
How do you break the circle of artificial harmony and of avoiding honesty? Leadership coach Jeremy Sweeney explores how to humanise organisations, the power of accountability, and whether kindness pays.
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The bank of goodwill
The bank of goodwill: kindness as a commodity? Anya Davis explores how kindness improves workplace relationships and how reciprocal kindness pays with behavioural psychologist Annie Hazlerigg.
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Kinship fuels growth – a view from technology businesses
What drives innovation and growth? Supportive comments or complete honesty? If you’re a high growth tech business, it’s kinship. Startup advisory Sapphire & Steel share their views on the economics of kindness.
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Firms considered “kind” are more likely to be successful
Our research indicates that kindness isn’t simply a matter of ethics – it’s a no-nonsense business issue too. If your firm is considered “kind”, it is likely to have stronger growth than a firm considered unkind.
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Bringing kindness back to the top of the leadership agenda
Should kindness be back at the top of the leadership agenda? Managing Partner Adrian Bettridge discusses how when we lead with kindness, we generate lasting success for ourselves, our clients and our businesses.
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How to balance kindness and profitability
We discuss why employers need to support their people beyond pay packet alone, the benefits of doing so, and the perils of short-term thinking.
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The challenges of being a kind leader
In this conversation, Mike Lewis (previous CEO of E.ON) shares his experiences, what kindness means to him, and how being kind helped him navigate the most unprecedented challenge of recent history.
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