Schedule a Demo

    Larry Fink: The Old World of Work is Gone

    CEOs Need to Heed Larry Fink's Advice; No relationship has been changed more by the pandemic than the one between employers and employees.

    Empty corporate boardroom with tables and chairs
    Loading Form...

    For years, Elon Musk took the top spot in “living person I most want to have lunch with”. This week, it officially changed to Larry Fink. Longtime readers of Saturday Spark will know who he is. If you are new, he is the Chairman & CEO of BlackRock, the world’s largest asset manager. More importantly, he is the author of some of the most catalytic letters to CEOs about purpose and sustainability. The fact that nearly one out of every four dollars on Wall Street is now invested with an ESG lens is in no small part thanks to him and his team.

    His most recent letter came out this week and did two things. First, it stated emphatically that Stakeholder Capitalism is not about politics, ideologies, or agenda. It is not “woke”. It is fundamentally capitalism and about the ability for your company to thrive in an interconnected, rapidly changing world where employees, customers and investors need to understand your purpose. As he states, in bold no less, “It’s never been more essential for CEOs to have a consistent voice, a clear purpose, a coherent strategy, and a long-term view. Your company’s purpose is its north star in this tumultuous environment”.

    The Employer-Employee Relationship Has Shifted

    Fink also wrote more about employees than in any prior letter. He reminded CEOs that employees are increasingly looking to their employer as the most trusted, competent, and ethical source of information; even more so than government, the media, and NGOs. That employees need to understand and connect with your purpose; and when they do, they can be your staunchest advocates. He then devoted an entire section to the future of work.

    Fink summed up what any CEO leading a company right now is likely feeling, “No relationship has been changed more by the pandemic than the one between employers and employees.” He stated that the world we knew before -- 5 days in the office, little discussion of mental health, and low wage growth -- is gone. He highlighted the importance of flexibility, meaningful work, racial equity, child care, mental health and the generational gap in expectations of employees. That CEOs need to thoughtfully use their voice and connect on social issues important to their employees. He summed up his thoughts by saying, “Companies not adjusting to this new reality and responding to their workers do so at their own peril.”

    A New Priority List for Leaders

    You know we are living in a brave new world when the world’s largest investor is advising their CEOs that they need to care about issues like childcare, mental health, and take a stand on social issues. He also reiterated the importance of decarbonization - continuing a theme of the previous letters. I wanted to reach through the Internet and hug him.

    Of course, every letter gets criticism from all sides. That Larry Fink doesn’t go far enough. It’s conventional wisdom, not leading wisdom. BlackRock won’t exclude fossil fuel holdings from portfolios, a controversial stance he defended this year. Others say he’s beholden to politically correct anti-business activists or that his ideas are "dangerous". But research shows his letters work, at least where BlackRock is a significant investor. At last count, they owned more than 5% in 97% of the S&P 500 companies. In other words, when Larry Fink talks, CEOs listen.

    So what would I say at that proverbial lunch with Larry Fink? First, I believe the combination of ESG and employee engagement is an incredibly powerful predictor for business performance and thus, investor return. Second, a huge personal thank you for bringing his voice, and power, to the topics that the WeSpire team has cared passionately about for 10+ years. Then, always the entrepreneur, “I have this idea…..”

    Quote of the Week: It is change, continuing change, inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be.
    Isaac Asimov

    Back to blog

    Subscribe to Saturday SparkSaturday Spark Icon

    Improve employee retention through impact engagement today