Out of that research came my second book, titled The Purpose Effect. I spent three years (2013 through 2016) researching the relationship between purpose and profits, as well as its importance on organizational culture, employee engagement, customer satisfaction, and productivity. Purpose guides culture, provides a framework for consistent decision-making, and, ultimately, helps sustain long-term financial returns for the shareholders of your company.Purpose unifies management, employees, and communities.Profits are essential if a company is to effectively serve all of its stakeholders over time – not only shareholders, but also employees, customers, and communities.economy would have grown $1 trillion, creating more than five million jobs.įurther down the letter, Fink highlights the positive relationship between purpose and profits. The study went on to suggest that had all organizations acted in this manner the U.S. Furthermore, over 14 years, these firms added 12,000 more jobs on average than their peers. Refraining from managing to the short-term-often referred to as short-termism-has to become a CEOs new raison d’etre.Ī study conducted by McKinsey Global Institute in cooperation with FCLT Global demonstrated that firms focusing their business on the long-term had 47% higher revenues and 36% greater earnings. Serving all stakeholders (customers, team members, partners, suppliers, community, and environment) and being ethical with all actions is essential. Research has proven that purpose-driven organizations are more successful if they operate with the long-term in mind. Few companies and a scant number of CEOs think this way. Purpose is not the sole pursuit of profits but the animating force for achieving them.”Īnd there’s the rub. “Purpose is not a mere tagline or marketing campaign it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders. “It must begin with a clear embodiment of your company’s purpose in your business model and corporate strategy,” he wrote. He suggests there is “an extricable link” between purpose and profit. Fink rightly points out that as the world crumbles, it just may be the CEO's role to save it. Society is increasingly looking to companies, both public and private, to address pressing social and economic issues.Īnd there it is - a call for purpose.Fink sees this, too.īut he implores CEOs to think differently with an astute observation. From an ingrained short-term, myopic, shareholder-return-is-the-goal strategy to a yellow vest uprising, the world seems destined for moral bankruptcy. Once one digests Fink’s landscape setting, one gets the sense we sit on the cliff of a perilous future.
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