BlackRock CEO Larry Fink lays out a number of requests for companies in a public letter.
He cites the pre-occupation with short-term, reactive measures to drive quarterly profits and asks CEOs to focus on “investments in employee development, innovation and capital expenditures that are necessary for longer-term growth.”
Fink explicitly raises the issue of purpose as the critical North Star to guide corporate decisions: “Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders”.
He cites environmental impact, workforce diversity, community engagement and employee re-training as among the larger issues companies must grapple with.
Here is a set of key steps to follow, for companies that are either contemplating their first step into the social sphere, or that are already down that path but unsure of their progress:
- Start with core values and beliefs. Any effort to weigh into the bigger social issues must be grounded in a set of deeply held values and beliefs. The worst thing a brand can do is to jump on the bandwagon of an issue that is hot but not sincerely meaningful to the company or its leadership. Savvy consumers will quickly sniff out a phony purpose and the brand will suffer. What issues genuinely motivate the company’s leaders? Its employees? What was the gleam in the eye of the founder? Where does the business model intersect with social concerns, such as sustainable supply chain, diversity, health care, or others? For this work, it’s always worth re-watching Simon Sinek’s inspiring Ted Talk, “Start with Why”.
- Assess your risk profile. When wading into the arena of social purpose, there is a spectrum of choices: from a generally uncontroversial purpose (e.g. real beauty) to a sharper, more current issue (e.g. voter registration) to a polar position on a hot topic (e.g. opposing Trump’s immigration policy). As you move along the spectrum, you increase both the likelihood of resonating powerfully with people who agree, along with the risk of alienating those who don’t. Be sure to align with leadership, board and other stakeholders as to where you’re ready to land, as you don’t want second-guessing and finger-pointing in the event of any backlash.
- Pick a focused, credible issue. Resist the temptation to take on overly broad, ill-defined problems. Instead set your sights on a concern that is clear and defined. A fuzzy mash-up of social strife set Pepsi up for failure, whereas Frito-Lay more successfully zeroed in on voter registration among young people. Make sure there is an appropriate and credible role for your brand in your chosen issue. To the point of walking and chewing gum, the challenge is to find that golden intersection of issues that are meaningful to society and relevant to your brand. Heineken took on the lack of civil dialogue amidst conflict and credibly showed people discussing their differences over a beer.
- Get the right guidance. The meaningful issues that make up brand purpose are fraught with nuances and pitfalls that can trip up well-meaning brands and unleash indignation. Shades of word choice and imagery can trigger powerful unintended reactions. Even the much-lauded Dove experienced this backlash from an online ad that showed an African-American woman pulling off a brown t-shirt to reveal a white woman in a white shirt underneath. Bring in voices that can represent those most affected by the concerns you’re addressing.
Source: Quotes and graphics by Forbes