Dear Larry Fink,
Your annual letter this year sent a shockwave into the corporate world, with a wake extending far beyond the CEOs to whom it was addressed. Defining prosperity as the delivery of not only financial performance but also a positive contribution to society is a case that social organizations and CSR departments have been making for what seems like forever. Coming from you, its an imperative, and it’s news. Those of us who integrate business with social value creation and education are heartened by your vision, and your clarity of intent. There has never been a time when we so badly needed industry to step up, use the power it has to create social as well as financial value, and address the dangerously escalating inequity of human society.
The problem is, though, that no one knows how.
To begin, the meaning of social value is unclear. Unlike the language of financial value, with its precision, regulation and universal application, the words we use to describe social value are generalities, with no metrics or shared definition, and therefore no teeth. Value for whom, and value of what kind? Expressions like “contribute to society” aren’t concrete enough to be actionable, and not specific enough to allow us to recognize a goal when it’s reached. This has served a purpose for many corporations, though, as a convenient kind of haziness, behind which fuzzy intentions can hide. Imagine a conversation with a CFO in which, instead of the technical language used to describe the nuances of a company’s financial health, words as open to interpretation as “wellbeing” were used to detail intended results. Without concise definitions, shared values and measurements, how can CEOs accomplish something when they don’t know what it means?
In addition, creating social value requires a vastly different process than creating financial value, and executives don’t work that way. It takes skills that are neither currently appreciated nor widely dispersed in corporate cultures. A real commitment to it takes patience; a mindset of inquiry rather than decisiveness; relationships prioritized over transactions; a willingness to invest in experiments instead of predictable bets; collaboration across boundaries of competitors and outsiders of every kind; and a willingness to fall out of love with experts paid to know the answer to everything in advance.
Outside the corporate world, many organizations have succeeded in solving seemingly intractable human problems. They define social value concretely, are brilliant at creating it, and know how to do it at scale. They are ending chronic and veteran’s homelessness, revitalizing cities with jobs, clean transportation and energy, addressing every aspect of human health, restoring the environment, making nutritious food available to people in food deserts, fighting drugs and crime by strengthening the communities where they exist in their most feral form. The methods and the skills are available to us.
Right now, though, the organizations creating social value exist in a different world than those creating financial value. It’s another example of the bifurcation that our current view of life and work demand. There is good and there is profit. Which is why your letter is so important.
Some things need to change in order for your challenge to be met. Education needs to relinquish its traditional academic silos of narrow, specialized disciplines with no overview of the larger systems at play in our contemporary world. Intentional effort is required to share learning and foster collaboration, co-creating systems-level solutions. Resources are needed, of course, and importantly, places are needed where leaders from both sectors can come together to learn from each other and align around language, goals, metrics and strategies.
We will not succeed if we continue on our current parallel paths. Nor will we succeed if every corporation develops and brands its own disparate initiative, duplicating efforts; overlooking synergies. As you have said so clearly, it is time to view them as one, but seeing the need is just the beginning. We are here, ready to help in any way.
Chair, Design for Social Innovation at SVA
President, The Measured Lab