Loyalty Rules! How Today's Leaders Build Lasting Relationships »

Frederick F. Reichheld is a director emeritus of Bain & Company and a Bain Fellow. The author of The Loyalty Effect, his work has been featured in the New York Times, Business Week, and The Economist, and his writings, including several articles in Harvard Business Review and the Wall Street Journal, have been widely published.

Fewer than half of today's employees believe that their companies deserve their loyalty. Web-empowered customers now defect more easily and more quickly than ever. Has loyalty become an outdated notion in today's marketplace?

Fred Reichheld, author of the bestselling book The Loyalty Effect, argues that loyalty is still the fuel that drives financial success-even, and perhaps especially, in today's volatile, high-speed economy-but that most organizations are running on empty. Why? Because leaders too often confuse profits with purpose, taking the low road to short-term gains at the expense of employees, customers, and ultimately, investors. In a business environment that thrives on networks of mutually beneficial relationships, says Reichheld, it is the ability to build strong bonds of loyalty-not short-term profits-that has become the "acid test" of leadership.

Based on extensive research into companies from online start-ups to established institutions-including Harley-Davidson, Enterprise Rent-A-Car, Cisco Systems, Dell Computer, Intuit, and more-Reichheld reveals six bedrock principles of loyalty upon which leaders build enduring enterprises. Underscoring that success requires both understanding and measuring loyalty, he couples each principle with straightforward actions that drive measurement systems, compensation, organization, and strategy:

• Play to win/win: never profit at the expense of partners.
• Be picky: membership must be a privilege.
• Keep it simple: reduce complexity for speed and flexibility.
• Reward the right results: worthy partners deserve worthy goals.
• Listen hard and talk straight: insist on honest, two-way communication and learning.
• Preach what you practice: explain your principles, then live by them.

Vivid case studies illustrate the consequences of building or ignoring loyalty, and a rigorous Loyalty Acid Test (www.loyaltyrules.com) enables leaders to benchmark their loyalty practices against competitors.

Providing tools for implementing the timeless principles of loyalty in a volatile economy, Loyalty Rules! is a practical guidebook for taking the high road in business-the only road that leads to lasting success.

Publishers Weekly

Reichheld (The Loyalty Effect), director emeritus of Bain & Company, believes that companies today over-emphasize short-term profits at the expense of employees and customers. Reichheld offers six loyalty principles (employed by top-shelf companies such as Enterprise-Rent-a-Car and Dell Computer), including: "reward the right results"; "listen hard and talk straight"; "preach what you practice." Company profiles with comments from executives are particularly useful, though some examples have already been studied extensively (Southwest, Cisco). Nonetheless, the book makes a solid contribution. (Sept. 14) Copyright 2001 Cahners Business Information.