Why Larry Fink’s words should spur you to action
When Larry Fink speaks, the business world pays attention.
It’s no wonder why. Fink, who took #28 on Forbes’ 2018 List of Powerful People, is chairman and chief executive of BlackRock. With a portfolio valuing over $6 trillion, it’s the largest investment management company in the world.
What might surprise you is what Larry Fink speaks about, more and more: social purpose.
Letters with lasting impact
Every year since 2012, Fink has penned a letter to CEOs – leaders of the very companies in which BlackRock invests. His 2018 letter, entitled “A Sense of Purpose”, called on executives to make integrating a corporate social purpose their top business priority.
The letter made waves, with buzz in The New York Times, Bloomberg and Business Insider. It became a cultural touchpoint for keynote speakers at business and sustainability conferences.
It also generated push-back, with critics speculating a call for social good was just the latest trend in corporate thought leadership, or worse: the kryptonite to profit.
Now, after publishing his 2019 letter entitled “Purpose & Profit”, Fink is doubling down on his call for global corporate leaders to take the social purpose movement seriously.
“Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked,” it reads. “Profits are essential if a company is to effectively serve all of its stakeholders over time – not only shareholders, but also employees, customers, and communities.”
This is music to Mary Ellen Schaafsma’s ears.
Ahead of the curve
Mary Ellen is the Director of Social Innovation and Research at United Way of the Lower Mainland, and part of a team that launched the Social Purpose Institute at United Way.
“I was thrilled,” says Mary Ellen, of both last year and this year’s letter. “His words validate everything we’re doing at the Social Purpose Institute.”
Launched in 2018, the Social Purpose Institute at United Way helps companies identify and develop their own social purpose. The institute’s experts work with business leaders to unleash their company’s potential, creating positive social change in local communities.
Mary Ellen was happy to see Fink address a common misconception in this year’s message.
“This year he’s linking purpose and profit. He’s echoing our message, that having a social purpose is the root to profitability.”
Leaders at the Social Purpose Institute say this approach is in line with overcoming short-term behaviour in favour of long-term value creation, an essential step in a purpose-driven approach.
A time to act
Mary Ellen also points out this year’s letter has a stronger sense of urgency – a compelling nudge for leaders sitting on the sidelines.
“What stood out for me was his call to CEOs to show leadership in this area,” says Mary Ellen. “It’s not just a business case for finding a social purpose; it’s a call to action.”
“If you don’t start now, you’ll fall behind,” added Mary Ellen, especially now that Fink continues to raise awareness and interest about social purpose, around the globe.
Mary Ellen says that early adopters – those who began their journey decades ago – found it took 10 or 15 years to identify and integrate their best-fit social purpose.
Luckily, the Social Purpose Institute at United Way can help you act, quickly.
Help is close to home
“We’ve learned from leading organizations in this area,” says Mary Ellen. “You don’t have to flounder on your own, for years. We’ve developed the tools, resources and coaching to help business find its best-fit social purpose, in a much more accelerated timeframe.”
So what advice does she have for business leaders interested in taking the next step?
“Show your leadership and vision. Start now!”
Ready to take get started?
Want to learn more? Keep reading.
Short-term behaviour vs. Long-term value creation
In his 2019 letter, Larry Fink addresses some of the most pressing societal issues impacting not only the market for investment, but the communities and individuals most affected by an increasingly unstable global landscape.
Fink argues companies must start searching for a new strategy to evolve with the business environment, and that strategy should by and large be centered around a social purpose. A year later, his message is stronger than ever.
By addressing the demanding nature of social media and activism, Fink sends out a warning to companies who operate on a scale that makes them susceptible to short-term behaviors. He encourages them to do the right thing for society – because it is good for business.
For BlackRock, a highly influential investment institution, the long-term profitability and value creation that comes from having a social purpose is a vital focus in decision making – proving having a social purpose may be the game-changing in future competition for global capital.
A business case for social purpose
Businesses who have committed to a Purpose that serves to meet a societal, humanitarian, or environmental need have been outperforming business who lack a social purpose – and this is something that we have taken into consideration very seriously.
At the Social Purpose Institute at United Way, we have curated a framework for businesses to implement social purpose into the core of their business strategy.
Eventually, businesses with purpose will be prepared to collaborate with government, business, civil society and other NGO’s to address the grieving issues which are threatening societies, markets, and institutions on local and global scale.
BlackRock has made a commitment to focus on long-term growth strategies centered around a clear purpose. The Social Purpose Institute at United Way believes integrating a social purpose is indispensable to thriving in today’s dynamic environment.
Finding your purpose can be a rigorous process. We are here to make it easy to get started.