BlackRock's Social Purpose Imperative

How Last Month's News Is Impacting the Mainstream Conversation

Last month Larry Fink, Founder and CEO of BlackRock, sent an open letter to CEOs that’s rocked the business world. While it has excited a cautiously optimistic, conscious business community, the impact it’s had on the mainstream business discussion is striking and continues to be felt widely. In the letter, BlackRock solidifies its commitment to a re-imagined model of capitalism where social purpose and impact are not a “nice to have” but an imperative.

A Long Time in the Making

It’s no secret that there has been a consumer shift towards brands that drive societal impact. In fact, our current state of political and societal upheaval has jet set a paradigm shift that’s been in the works for a while. As indicated in BlackRock’s letter, consumers are looking to brands to solve some of the world’s biggest problems, as they’ve lost trust in government and other institutions to do the job. Combined with an overall trend toward greater self-awareness, people are craving more meaning in their lives and this need has translated into a preference for brands with purpose.

Importantly, the shift represents a huge opportunity for brands to play a more significant role in people’s lives and in the lives of their employees and partners. As is to be expected when you engage from a place of shared values as your baseline. Additionally, companies which have effectively implemented purpose are seeing growth rates anywhere from 4x to 14x*. However, for those new to the idea of social purpose or with more traditional views about business’s role in society, this news can be daunting.

What Is Social Purpose?

Confusion continues to persist over what purpose is and what it isn’t. Purpose is at the core of your company’s strategy. It gets to the heart of why you exist and is at the very center of your brand. It serves as a call to action for your employees, customers and stakeholders and informs decision making across the entire value chain.

Having social purpose means that you have a purpose beyond profit that drives societal impact. In other words, it is not simply a marketing campaign, social good effort or a corporate program that sits in a silo. Those efforts typically fall into what’s called cause marketing, social good, or corporate social responsibility, which are worthy and valuable programs in their own right. But they aren’t in and of themselves social purpose.

What BlackRock’s Letter Means for the Mainstream

At the core of BlackRock’s letter is the notion that as business has become the largest and most powerful institution in the world, it must do more to solve the world’s problems. It suggests that what we’re currently doing via corporate social responsibility and other programs is no longer enough. In other words, it’s time to evolve.

Further, BlackRock believes, as the conscious business community has for some time, that social purpose is a critical and necessary next step. Given BlackRock’s footprint and marketplace authority, they’ve essentially taken social purpose and made it mainstream. Any Fortune 500 company that wasn’t considering social purpose prior to this letter, certainly is now.

For companies who are considering or tasked with aligning to a social purpose, the road ahead can be a daunting one. It’s a road that can and likely will be met with many obstacles. Therefore, here are five best practices to consider:

 1.   Purpose Isn’t for Marketing to Solve. Purpose requires the entire organization. It is not a marketing initiative. The backlash from treating it solely as a marketing campaign will be widespread and do more damage than good. Each department needs to be an active and equal participant in the effort.

 2.   Re-examine Your Core Values. Aligning to social purpose is a good time to re-examine what you stand for. Are your current values an accurate indicator of why you exist and what you’re looking to achieve in the world? Do they impact everything you do, from your decision-making, leadership style and culture to your brand communications platform?

3.   Authentic Intention is Your North Star. From defining your social purpose to trying to connect an entire company and market to it and driving impact for your purpose, intention is always your answer to any roadblock or challenges you encounter along the way. When in doubt, rely on the authentic intention behind your purpose to guide you.

4.   Don’t Align People to Purpose. Let Them Lead It. Purpose is not something you “roll out.” Let people identify and connect their individual purpose to the larger corporate goals. Additionally, everyone must be a part of creating and/or shaping the company's purpose if they are to be authentically connected to it. Therefore, engage them at each key decision point as you develop your corporate purpose.

 5.   Be honest about progress. Implementation of purpose across your entire value chain isn’t easy but necessary to driving impact. The good news is that it doesn’t need to be done overnight, as long as you are honest about your progress with key stakeholders and customers. Using widely accepted metrics as benchmarks and providing transparency into progress as well as setbacks is a must.

Finally, it’s not easy to identify a worthy social purpose that the entire company can rally behind, but when it happens, the benefits are immense. Take time to be thoughtful and respectful of the process. Bring in help to facilitate internal discussions and stakeholder engagement throughout.

*People on a Mission, Korn Ferry 2016; Firms of Endearment, 2003.