Brunello Cucinelli sets profits cap for gracious growth
Italian luxury brand Brunello Cucinelli is setting a profit cap to guarantee sustainable growth for the company’s future, which includes investing in better working and salary conditions for its employees.
The company’s shares have increased ten times in value since its listing debut in 2012, outperforming the MSCI Europe Textile Apparel and Luxury Goods Index, according to Bloomberg. Yet Cucinelli's mantra affirms the business is a custodian of creation, mindful of the earth and caring for its employees.
Mr Cucinelli has been vocal of building a company that balances profit and giving back, often citing ‘humanity begins at home’. In a speech to world leaders at the G20 forum Mr Cucinelli iterated “I wanted a company that had a balanced and gracious growth. I wanted human beings to work in slightly better places, earn a little more in wages and feel like thinking souls at work. Let us try not to turn our backs on poverty.”
Humanity begins at home
“I wanted a small part of the company's profits to go to beautify all of humanity and I wanted people to work a fair amount of hours and be online the right amount of time, so that Technology and Humanism could be harmonised and a healthy balance between mind, soul and body could be restored, because the soul and body also need nourishment every day.”
Despite having surpassed the one billion dollar revenue mark, Mr Cucinelli told Bloomberg “When we decided to list, bankers told us we needed to target 30 percent sales growth every year. I said, ‘forget it! If you want a company that makes profits by going against the principles of humanity, don’t buy us’.”
Gracious growth, as a business model, puts people and sustainability at the centre of its operations, instead of solely giving profits to investors and shareholders.
Shared value prescribes a new form of capitalism for companies to simultaneously enhance their competitiveness while advancing communal socio-economic welfare through Corporate Social Responsibility (CSR).
In a scientific paper titled Gracious growth: How to manage the trade-off between corporate greening and corporate growth, its authors argue that scholarly research focused on CSR aims to reshape and transform business thinking through concepts such as “corporate citizenship” and “shared value”. Most importantly, organisation are increasingly turning to sustainable practices instead of solely profit chasing.
Successful companies such as Brunello Cucinelli help to generate new insights about how growth and sustainability can be simultaneously achieved.
Article sources: Bloomberg, Gracious growth: How to manage the trade-off between corporate greening and corporate growth via ScienceDirect.com