Without a sense of purpose, no company, either public or private, can achieve its full potential.
A few weeks ago the CEO of BlackRock, the world’s largest asset management firm with over $6 trillion under its management, called for the corporations under its thumb to be more purposeful.
“To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society,” Larry Fink wrote. “Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate. 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.”
These words, coming from the world’s largest asset management firm, largely fell on deaf ears. Sure, a few headlines were written in Forbes and the WSJ. But then the attention cycle shifted and the business world gave off a collective shrug, going back to business as usual.
Strange, considering that studies repeatedly show people want companies to speak up when it comes to hot button topics. Earlier this year, Sprout Social released a study that found 66 percent of consumers believe it’s important for brands to take a stand on social/political issues. Only 11 percent reported that it was not important to them.
Consumers believe it's important for brands to take a stand on social/political issues.
Larry Fink and two-thirds of consumers are agreed – there is an urgency to companies creating positive social impact that goes far beyond their responsibilities to create shareholder value. But herein lies the paradox for purpose-centricity: when pursued for the wrong reasons, such as driving shareholder value, it all falls apart. If consumers can tell that a company’s purpose-centric messaging is at all contrived, well – the company will probably be worse off than if it had stayed out of the conversation entirely.
Let me explain in more stark terms, with a bit of profanity mixed in.