Why Companies Can’t Just Write Checks to Do Good
Watching the horrific events in Las Vegas makes us wonder how we can combat so many of the problems we see in the world—especially the world immediately around us. I think it is relevant that, at Fortune’s recent CEO Initiative event, some of the world’s top executives talked about doing well by doing good, and the importance of their companies’ focusing on common causes to rally around.
While we can’t directly combat acts of violence, we can energize our efforts to play a positive role in society. Listening to the dialogue at the Fortune conference, and reviewing social media chatter emanating from the event, there are some interesting emerging trends to note.
Partnering for change
This week’s tragic events bring to the fore yet again the fact that our great country has problems that must be urgently addressed. Many issues have bubbled together to create a scary dynamic, and all of us, especially business leaders, must be champions for positive change. How can we make a difference?
JPMorgan Chase CEO Jamie Dimon, in his conference remarks, encouraged attendees to invest in the Rust Belt. He stressed the importance of finding “practical solutions” to revitalize American cities, and the role corporations play not just in giving financial support, but also in donating their time, talent, and resources. For example, JPMorgan, which has heritage business roots in Detroit, has been working to help rebuild the city through efforts focused on such immediate issues as sanitation, affordable housing, and fixing and installing streetlights to prevent crime.
The firm’s goal is to make Detroit more liveable to prevent additional population attrition and attract businesses and residents back to the city, which will, in turn, positively affect the tax base. When JPMorgan decided it wanted to help, it didn’t just write a check; it looked at data to see where its support would be most effective. In fact, the firm worked with the city of Detroit, donating its own data tools and resources so it could help the city make smart investments and planning decisions.
This is the future of corporate purpose: becoming a true partner for change.
The millennial shift
Indra Nooyi, chairperson and CEO of PepsiCo, said it well when she noted that in the past, company “purpose” was a one-off corporate social responsibility (CSR) program, usually focused on what the CEO cared about at the time. But when the CEO left, that CSR program often disappeared as well.
Now, she said, “We have to look at how purpose can be part of the core business of a company.” Purpose can no longer be an afterthought; companies must look at how they can link profits with purpose as part of their DNA. Tory Burch rallied behind this thought with her tweet about why “injecting social benefit into the core business strategy is a success factor for modern companies,” and Fortune highlighted the Allstate CEO’s comments that “business must focus on more than just money.”
Much of this shift has happened in the last decade, with the rise of millennials in the workforce, creating a change in not only what employees expect from their employers, but also what consumers in general expect from the companies from which they purchase. A job is no longer just about a paycheck; it’s about working toward a greater cause, feeling good about what you do, and finding business leaders who are increasingly dedicated to the notion that business can be a force for good. More than 50% of millennials say they would take a pay cut to find work that matches their values, while 90% want to use their skills for good.
The broader ecosystem
Mark Bertolini, CEO of Aetna, summed another interesting theme from the conference: that companies themselves are becoming “social ecosystems.” Employees now have a broader view of the world and are influenced by many perspectives. Many companies today have a greater responsibility to be part of their communities.
Hamdi Ulukaya, founder and chairman of Chobani, talked at the conference about how his first priority has always been the people in his company, followed by an effort to help the local ecosystem. One of the projects he’s most proud of is building a world-class baseball field for Chobani’s local community.
As Steve Case tweeted: “Zip codes matter more than genetic code.” Once again, we are reminded we have to be a meaningful partner not only with our shareholders and customers, but also with our employees and broader communities.
Corporations who want to make a difference today must demonstrate less talk, more action, and a lot more investment in our own circles of influence to create an impact. Alan Murray, Fortune president and Time Inc. chief content officer, noted at the event that it is far more common for the heads of huge companies to wade into controversial cultural and political topics—from climate change to racial protests—today than was the case 10 or 15 years ago. Increasingly CEOs are exhibiting the idealism that truly has the potential to change the world.
Kathy Bloomgarden is the CEO of Ruder Finn.