Many of you know how much we, the RedThread organization, care about purpose and stakeholder capitalism. We published a research report on it, did a podcast season on it, and will be delivering a keynote on it at the upcoming Spring HR Tech show.

Well, purpose also happens to be in the news A LOT right now—or maybe, I have confirmation bias because I’m prepping for my session—and there are a few must-read items we want to put on our radar (below).

TL;DR: There remains a real need for orgs to serve a broader purpose in society (as shown in the 2022 Edelman Trust Barometer), but some investors and business leaders are starting to push back on that notion.

My takeaway is that many leaders are uncomfortable with the idea of the purpose being their North Star (and letting everything else follow), because purpose can be somewhat squishy and hard to define. In contrast, the shareholder value is focused, clearly defined, and historically “safe.” No CEO ever got fired for chasing the shareholder value. Yet, an argument could be made that in the future, they might be, if the shareholder value is all theypursue. Therefore, a narrow focus on the shareholder value may not be as “safe” as some leaders assume. 

All of this pushback doesn’t mean business leaders should shy away from leading with purpose. It means we should instead:

• Clarify what purpose means in our orgs and connect it to individuals more effectively.
• Identify better metrics for measuring and communicating purpose.
• Develop leaders to better understand and lead through purpose.

How do we do that? Well, the report and the podcast season mentioned above have some good insights—and we will be adding to those in that Spring HR Tech keynote in March.

In the meantime, these resources will help keep you keep updated:

• 2022 Edelman Trust Barometer: This got published yesterday—and, to be honest, it is a bit of a depressing read this year. Yet, the headline is that business is still the most trusted institution, underscoring the broader importance of businesses having and delivering a clear purpose to their stakeholders.
• Larry Fink’s 2022 Letter to CEOs: Fink is the CEO of the investment firm, Blackrock, and as such, has a strong influence on investors and the business world, more broadly. He has also been a proponent of stakeholder capitalism for years. This letter, which is still very bullish on pursuing the organizational purpose, seeks to tamp down some of the dissension surrounding stakeholder capitalism.
  Specifically, he calls out, “Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke.” It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.” 
• Unilever Should Know That Purpose Isn’t Strategy: An investor named Terry Smith, who owns about 7% of Unilever, is going after the company for its focus on purpose. He likely isn’t going to succeed in dissuading CEO, Alan Jope, from the focus on the purpose, but Smith’s tirade is likely indicative of a greater undercurrent of questioning orgs having a focus on purpose. This is a good reminder of the need for balance when talking about purpose.
• C.E.O.s Were Our Heroes, at Least According to Them: If you want a cynical take on organizational purpose, here it is. This essay is adapted from a new book, “Davos Man: How the Billionaires Devoured the World,” by Peter S. Goodman. In his view, stakeholder capitalism is merely “a means of preempting government regulation.” It’s an interesting perspective, to say the least, and reminds us to check our assumptions.

• 10 ESG Questions Companies Need to Answer: This list of questions can help business leaders understand the Environmental, Social, and Governance (ESG)-related questions they should be asking as theyset their strategy. Given that the annual World Economic Forum at Davos is this week, you can expect to hear more on ESG (and likely retorts to Goodman’s book) in the coming weeks and months.

If you come across any other good articles/perspectives on organizational purpose and leadership, send them my way.

Meanwhile, stay (or get!) healthy, and take care of yourself as you begin navigating this new year.