
Forward Economics
Chapter 5
The Apex Advantages of the Forward Business Model
You can’t have greatness without goodness.
Randy Lewis
A Tale of Two Burgers
In Anytown, USA, two small companies — Burger Top and Bliss Burger — are locked in a heated battle for the burger soul of the town.
As the Business Sun’s rookie reporter of the year, you’re sent to profile them and predict which will win. You spend two days interviewing customers, employees, managers, and local officials, scoring each firm on a dozen indicators from 1 (below average) to 3 (above average).
1 = below average
2 = average
3 = above average
Bliss Burger: Bright, spotless, and buzzing. Employees greet customers by name. Mira Johnson says, “They pay $12 an hour when the minimum is $7.25 — and they train us.” Manager Carlos Martinez adds, “They treat us like family.” Customers rave: “Everything’s great — food, service, and they give back to the town.” Bliss Burger reinvests $100 K a year — half in upkeep, half in new products — and donates to local schools and parks.
Burger Top: Dim, slow, and tired. Trash lingers on tables. Employees look defeated. Jake McMillan shrugs, “It’s a fast-food job, man — $7.25 an hour.” Manager Latisha Washington earns $45 K and is job-hunting. Customers drop by only when in a rush. Minimal reinvestment; minimal pride.
Your conclusion for the Sun is easy: Bliss Burger earns more, grows faster, pays better, gives back — and plans to open another store.
From Parable to Practice
Bliss Burger isn’t just a generous company; it’s a more powerful one.
It reinvests nearly everything into its people, R&D, and community — a Forward Business by design. Burger Top is the classic pay-it-back firm, sending profits to absentee shareholders instead of the ecosystem that actively sustains it.
Bliss Burger’s second store leads to four, then eight — exponential growth — while prices stay the same. This isn’t fantasy; it’s what becomes possible when free enterprise runs on the good rules. It becomes truly great.
To see how the advantages of virtue (done right) work in practice, consider the 2018 shareholder report for the world’s best-known pay-it-back burger chain: McDonald’s. Across 2,520 company-owned stores:
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$10 billion in revenue
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$2.9 billion in payroll and benefits
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$5.6 billion in operating expenses
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$30 million in R&D
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$1.6 billion gross profit (+ $100 M depreciation = $1.7 B cash flow)
If McDonald’s operated as a Forward Enterprise, it could allocate that $1.7 B this way:
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45% profit-sharing bonus ($779 M — a 26% pay increase)
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10% community and global giving ($170 M)
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45% reinvestment in R&D, upkeep, and new stores ($779 M)
Same menu, same prices, same customers — but 26% higher pay, ten-fold more giving, and double the growth rate. While McDonald’s has been successful, the forward version would be far better. And crucially, it achieves that not through charity or law, but through superior design.
Forward Business Advantages Go Even Further
Capitalism isn’t a zero-sum game. When dollars are invested in people and communities, they tend to return multiplied, enlarging the pie. Higher wages bring better talent; ethical practices attract more customers. Investment begets growth.
Nature offers the same lesson: once a forest reaches density, it creates its own microclimate — more rain, more life, a virtuous cycle of renewal. An economy is no different.
Decades of research confirm it. Joseph Blasi, Douglas Kruse, and Richard Freeman have studied profit-sharing and employee ownership across tens of thousands of workers. Their 2008 survey of 40,000 employees found that sharing profits increases loyalty, effort, innovation, and efficiency — and the more sharing, the greater the effect.
Elsewhere, a 2016 meta-analysis covering 56,984 firms in 15 nations showed that shared-capitalism firms are 4% more profitable on average. Another multi-decade study (1988–2003) found that companies where employees own ≥ 5% of shares are 24% less likely to fail in recession.
Across hundreds of studies, the conclusion is the same: the more profits are shared and reinvested, the stronger, more resilient, and more competitive the enterprise becomes.
The claims, in other words, are not theoretical. The competitive edge of virtue is measurable — and we’ve barely begun to discover what’s possible when it’s applied in full.
Customers Will Choose Virtue
Free markets run on choice. When faced with two similar products — one from a firm devoted solely to shareholders and one from a firm that creates jobs, uplifts communities, and rewards workers — most customers pick the latter.
That preference is measurable. Nielsen’s 2015 global study found sales growth twice as high for products carrying social-responsibility claims, and five times higher when those claims appeared in advertising. Over half of 55,000 respondents said they’d pay more for ethically sourced goods. Forward firms won’t need to charge more — but they can market their ethics and win loyalty.
Amy Fenton, Nielsen’s global leader for sustainability, notes: “Consumers around the world are saying loud and clear that a brand’s social purpose is among the factors that influence purchase decisions.” A 2016 Morgan Stanley survey of apparel buyers echoed that finding: more than 50 % rated ethical business practices as important — up from 42 % just six years earlier. The trend is steeply upward, especially among millennials.
Beyond Fast Food
Could these advantages extend beyond burgers? Yes. The same dynamics apply across sectors — from Home Depot and Target to Coca-Cola and Dollar Tree. When companies reinvest in people and purpose, profits and resilience follow. The next chapter shows how.
