In an interview with the New York Times magazine in 1970, the subsequent Nobel laureate Milton Friedman gave his view of a company’s social responsibility: “The social responsibility of business is to increase its profits.” He was thus advocating the same view of business and enterprise as Adam Smith in the 18th century, who employed the metaphor of the “invisible hand.” Smith believed that the self-interested market player did not strive directly to improve the common good but, guided by the invisible hand, ensured that scarce goods were distributed in the best possible way. Just under half a century after Friedman’s pithy statement, the expectations placed on companies by society have changed dramatically, and thus also the way companies and their executives see themselves.
The Blackrock CEO Larry Fink manages more than 6 trillion dollars of assets. In his latest message to the companies that invest in his fund, he writes that “profits and purpose are inextricably linked.” However, he continues, “purpose is not the sole pursuit of profits but the animating force for achieving them.” For communications management, this naturally also gives rise to new demands. The PR advisory firm Reputation Institute, for example, ranks the definition of a credible purpose as the number-one task for leading companies in 2019.
However, this quest for companies’ contribution to society is not completely new. And contrary to what we may sometimes be led to believe, it is not to Silicon Valley that we owe this orientation to social concerns. Back in the 19th century, leading entrepreneurs such as Carl Duisberg, Werner von Siemens, and Robert Bosch not only endeavored to improve the working and living conditions of their workforce, but also set their sights on social progress as a whole. And even if their choice of language and the aims they set were somewhat more modest than the tone of today’s entrepreneurs, then this was above all because it was still the job of religion to provide transcendental orientation and define the meaning of life.
It is no contradiction when the established churches in Germany currently expect to lose half their members and people in the advanced industrial countries, especially young people, expect their employers to make them part of a project to solve the pressing issues of human existence. Materially, they have what they need, and many of them are very well off, but meaning has become a scarce resource. In a secularized world, and following two world wars whose millions of casualties shook the foundations of established religion, the future is in short supply as something to yearn for beyond the present and the past. Digitalization is exacerbating this feeling by putting an end to the transitoriness of information. The impression that arises is that fewer and fewer truly new things are coming into being, and that history is marching on the spot.
Certain observers believe it is presumptuous, if not counterproductive, for companies to rush in to fill this gap in people’s quest for orientation. Writing in the German daily Frankfurter Allgemeine Zeitung, the Bielefeld-based sociologist Stefan Kühl says that any company wanting to motivate its workforce by alluding to the “higher purpose” of their work should be aware that a company is not a “house of fun.” Of course, an appeal to the purpose of work can permanently make up for deficits in areas such as pay or working hours – although the working conditions in many a promising startup tell a different story. However, the impression that arises here is that any talk of purpose is just a means to an end (that of optimizing the use of human resources). In fact, the reason behind this desire for a clear understanding of what our employers stand for and what their objectives are in deploying their resources is people’s need to know where they stand in an increasingly complex world.
And because this is so, workers can distinguish very well between half-baked posturing and serious-minded purpose – especially if companies engage in open dialogue on this subject. Anyone who just pays lip-service to these ideas or who never gets beyond playacting should heed the words of the Hungarian playwright Ödön von Horvath. He knew exactly where the difference between appearance and reality lay: “You see, I’m really quite different. It’s just that I rarely get around to being that way.”