A Challenge to Canadian CEOs: Lead with Purpose in 2019
When it comes to marketing with purpose, all eyes have been on Gillette over the past couple of weeks, thanks to its “We Believe: The Best Men Can Be” ad.
But when it comes to business social impact, a far more important moment happened one year ago this month – though, in this country you might not know it.
In January 2018, BlackRock Chairman Larry Fink dropped a bombshell in corner offices and boardrooms across the western business world when, in a letter to CEOs of public companies, he argued business leaders have a responsibility not only for delivering profits but also for making “a positive contribution to society.”
While Fink – who, as Chairman and CEO of BlackRock, the largest investment firm in the world, with more than $6 trillion in assets under management – was not the first corporate leader to call on companies to serve a social purpose beyond wealth creation, he was certainly the most influential. So, when he wrote “every company must not only deliver financial performance, but also show how it makes a positive contribution to society”, people listened. Fink’s letter, said Jackie Roberts, chief sustainability officer at the Carlyle Group “captured the attention of investors and CEOs around the world.”
Except, it seems, in Canada.
In the year since Fink’s letter, I’ve been hard-pressed to find Canadian business leaders explicitly take up his challenge. As the CEO of Canada’s leading social-impact agency, I am constantly scouring the landscape for businesses which have embraced purpose as a business driver. And I can’t think of many – or any – large Canadian brands who are leading the charge on corporate purpose.
Don’t agree? Here’s a thought experiment: what is the Canadian equivalent of Nike’s commitment to inequality? Where’s Canada’s Patagonia which is suing the Trump administration over its plan to develop protected lands? What’s the made-in-Canada version of Everlane’s commitment to radical transparency?
Sure, there are the usual “buts”: Bell is making important strides in helping to reduce stigma around mental health. Tim Hortons helps kids from low-income families go to camp and learn leadership skills; through Jumpstart, Canadian Tire is helping kids be active, join teams, and play sports. Many other Canadian companies are prodigious cheque-writers.
But as welcome as these efforts are, they are all examples of a traditional approach to creating social impact: purpose-as-community-charity but not core business or marketing activities.
And yet, that’s exactly what Fink had in mind when he penned his letter. Purpose isn’t a buzzword. Nor is it a cynical ploy to tell a good story to paper over bad behaviour. Purpose is a business driver – a key component of your strategy, your values, and your activities in the market.
When conceived, designed, and executed properly, purpose helps companies win.
• Purpose drives sales: after Nike released its 30th anniversary “Just Do It” ad (the controversial one featuring Colin Kaepernick) the company reported a 10% increase in income, leading to a 7% jump in share price.
• Purpose builds a thriving corporate culture: the yogurt company Chobani, with its equity-sharing program, twice-minimum wage salary, and refugee hiring policy, has created a highly productive workforce and minimized employee turnover.
• Purpose protects brands in tumultuous political times: would Starbucks have weathered the storm over the arrest of two African-Americans in one of its Philadelphia outlets had the company not shown a decades-long commitment to community and diversity?
To be sure, purpose isn’t the be-all and end-all of business success. Purpose can’t undo poor product design, bad business strategy, or marketing mistakes. But, as the examples above show – and there are many more – purpose does have bottom-line impacts that Boards, CEOs and CMOs must pay attention to.
As the line between public and private continues to blur, more consumers are voting their values with their wallets, more talented young people are voting their consciences with their employment contracts, and more brands are having to declare where they stand on contentious social issues. There is no ducking this trend and companies which align themselves to the opportunities these realities provide will better be able to navigate an increasingly challenging business environment.
A year ago, Fink wrote “without a sense of purpose, no company, either public or private, can achieve its full potential.”
Why are we still waiting for corporate Canada to catch on?
– Phil Haid is CEO of PUBLIC Inc, a social impact agency based in Toronto & NYC.