Re-thinking Corporate Purpose in 2018
Financial Outcomes Are Not Longer Enough
As corporate leaders lookout across the economic, social, technological, and environmental landscape in front of them in 2018, Larry Fink, founder and CEO of Blackrock, has given them something to think about.
On January 17, he published his annual letter to CEOs and titled it “A Sense of Purpose”. His message was simple: delivering financial performance is a necessary but no longer a sufficient condition for long-term success. Corporations must now make a positive contribution to society that benefits all stakeholders. That is, doing well by doing good is the only path to sustainable growth. It is a direct challenge to the principle of maximizing shareholder profits that dominates thinking in the business world. Fink is asserting an obvious but often overlooked truth in business: business legitimacy rests on long-term thinking and trust.
Fink’s letter is notable because of his position. Blackrock manages $6.3 trillion in assets and controls one of every three investment dollars in America. So he has a unique perspective of the business world. Some say his position gives him more influence than the president of the United States. Indeed, Blackrock has a lot of sway in corporate board rooms.
The Next Generation of Consumers
Indeed, statistics show that our next generation of consumers, the millenials, are more likely to support companies that give back. A recent Fortune magazine poll showed almost two-thirds of 18 – 35 year olds were more likely to work for a company that gave to charity than those who were not. Not only that, but they were also more likely than previous generations to purchase products or recommend a company that gave back.
Vision and purpose have always been at the forefront of corporate leadership. The difference now is that Fink has challenged leaders to make social contribution a primary (not secondary) focus of vision and purpose. The most powerful asset management firm in the world has endorsed the double bottom line. And Blackrock has leverage to keep corporate leaders accountable.
Aligning Vision & Purpose
So, we ask you this: As you look out into 2018, 2028, or 2038, what is your vision for your organization? How does it account for the organization’s contribution to society and how does it address sustainability and inclusivity?
Learn how The Nebo Company works with leaders and organization to make their vision real.