An open letter to business leaders from BlackRock CEO Larry Fink has put the relationship between organisational purpose and profit under the spotlight.

Trust in organisations is at an all-time low. Seemingly every data points to a breakdown in the relationship between individuals and government, business, non-governmental organisations an media.

Professor Anne Gregory, Chair of Corporate Communication at the University of Huddersfield, says that the issue lies in poor leadership.

“Leaders pursuing financial and power preservation ends and short-term gains are the major reason that trust is at rock bottom,” said Gregory.

Gregory suggests that the root of the issue lies in the pursuit of financial gain over social purpose. The issue has become acute because stakeholders are able to engage with organisations in new way. Organisations and their leaders are being publicly called to account.

“Leaders are being forced to re-think their purpose and how they gain legitimacy, not only with immediate stakeholders, but society more widely,” said Gregory.

Gregory foresees change afoot within organisations and calls on the public relations profession to step up to the task of helping organisations to define their purpose in a way that is meaningful to society.

"Having a clear purpose and means of achieving is the biggest public relations challenge for all organisations whether private, public or not for profit," said Gregory.

She wrote an excellent chapter for the first edition of #FuturePRoof edited by Sarah Hall (2015) called Communicating with conscience; influencing organisational leaders to do the right thing.

CEO’s on notice

It’s an issue that is quickly rising up the corporate agenda. Larry Fink, CEO, BlackRock, fired a warning shot in January 2018 in his organisation’s anniversary CEO letter to business leaders when he called companies to account on their societal impact.

His words carry the weight of the largest investment fund in the world with more than $6 trillion under management.

“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also benefit all their stakeholders, including shareholders, employees, customers and communities in which they operate,” said Fink.

“Many governments are failing to prepare for the future on issues ranging from retirement and infrastructure to automation and worker retraining. As a result, society is turning to the private sector and asking that companies respond to broader societal changes."

In time I believe that we’ll come to see Fink’s letter as a significant intervention in the history of corporate governance. It’s a call to action that challenges the capitalism itself.

But Fink has clearly spotted the change of mood in the public sphere cited by Gregory. Organisations that fail to engage with their community in a purposeful way will lose their permission to operate.

Purpose has long been conflated with marketing and corporate social responsibility. It isn’t a veneer that can be applied to an organisation, instead it must be rooted in its values and its engagement with stakeholders.

Getting to why

Author and marketing consultant Simon Sinek has codified a framework grandly called the Golden Circle to help an individual or organisation explain their purpose and what they do. He’s the author of Start With Why (Penguin, 2011).

It's a model that has worked faithfully for me in helping find the difference between an organisation’s purpose and marketing bullshit. I'd recommend trying it out and sticking it in your communications toolbox if you find it useful.

Sinek's Golden Circle is based on three elements: why, how and what. These are the building blocks of storytelling. They're three of Rudyard Kipling's Six Honest Serving Men from the book The Elephant's Child.

"I Keep Six Honest Serving Men..."
 

I keep six honest serving-men (They taught me all I knew); Their names are What and Why and When and How and Where and Who. I send them over land and sea, I send them east and west; But after they have worked for me, I give them all a rest.

I let them rest from nine till five, For I am busy then, As well as breakfast, lunch, and tea, For they are hungry men. But different folk have different views; I know a person small— She keeps ten million serving-men, Who get no rest at all!

She sends'em abroad on her own affairs, From the second she opens her eyes— One million Hows, two million Wheres, And seven million Whys!

Who, what, when, where, why and how act as information gathering and research. The subset why, how and what work as the basis for almost any form of communication from key messages to mission statements, and from boiler plates to elevator pitches.

Using the Golden Circle as a tool

Most people and organisations start from the outside of Sinek’s Golden Circle. They’re able to say what they do and how they do it. These are straightforward and are typically defined by activity, time or place.

Here are my personal what and how.

I practice public relations to help organisations engage with their publics in a conversation (what), using a variety of media (how).

This is where most people and organisations begin and end. Sinek suggests that the most successful people and organisations communicate from the inside of his Golden Circle out, starting with why? They state their purpose right up front. I used to think that it was an inspiring way to engage and motivate a public. In hindsight it’s plain common sense.

Why, not what, or how

“People don’t buy what you do, they buy why you do it,” says Sinek.

The flippant answer to why is often to make money. But as we’ve learnt from BlackRock making money isn’t a purpose that has a benefit to society. It's a by-product of doing good work or running a good organisation.

The other extreme can be found in organisations with an over inflated sense of purpose. You’ll have come across their mission statements. Business writer Lucy Kellaway called out examples in her column in The Financial Times.

She cited Asana, a company that sells instant messaging software, “it exists to help humanity thrive by enabling all teams to work together effortlessly.” Kellaway also called out 3M, Barclays, Citibank, Facebook, KPMG and Microsoft for over stretching their purpose.

If an organisation hasn't got a why that rings true with the public then as Gregory and Fink both suggest at some point that relationship will breakdown. It needs a rethink.

A final word on where personal purpose meets on organisational purpose. The root to personal fulfilment at work is finding a career that fulfils your own sense of purpose.

My professional why is to help people and organisations listen to their publics and simplify how they communicate so that they engage in the best way possible. The outcome is conversations, understanding and ultimately trust.

Tools

Golden Circle - Simon Sinek explains the Golden Circle in a TEDx talk from 2009. It’s a good place to start if you want to explore your organisation’s purpose.

Summary: state your purpose

#1 Lessons from Professor Anne Gregory and Larry Fink

Organisations need to have a societal purpose beyond making money if they want to build a sustained relationship with the public. It seemingly challenges the basis of capitalism but social forms of media mean that organisations are being called to account.

#2 Keep asking why

Use Simon Sinek’s Golden circle tool and Rudyard Kipling's Six Honest Serving Men as the basis of conversations about purpose within your organisation. It’s a powerful means of cutting through bullshit.

#3 Foundation communication

Purpose should be the foundation of all organisational communication. If you can answer why, how and what for your organisation you’ve got the basis of explaining what you or your organisation does in any form of media.