By Mark Feldman
The new U.S. tax code creates a significant opportunity for companies to improve lives around the world while simultaneously growing their bottom lines. The reduction in the corporate rate from 35 percent to 22 percent will free up cash that offers the potential for business and social transformation.
Business titans, including Blackrock’s Larry Fink, have already begun to turn up the heat on CEOs around the world pushing them to think differently. In his 2018 annual letter, Fink, who manages $6 trillion of investments in global companies, shares his belief that “to prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” This is not new thinking in the responsible and sustainable business world, but a monumental moment when expressed by a CEO with such influence – someone who has the teeth to cause huge financial impacts to companies and organizations globally. With Blackrock’s future investment strategy in mind, Fink demands more transparency, tangible proof showing how executives are continuously re-imagining their companies and incorporating new thinking and methodologies system-wide. He directly asks CEOs “what will you do with increased after-tax cash flow, and how will you use it to create long-term value?”
Since the tax cuts extend to companies of all sizes and industries, this is not a question only for the world’s largest and most prominent. It is a challenge for all executive teams. As someone who has spent 25+ years helping companies create and communicate their corporate social impact initiatives, here are four initial pieces of advice to help leaders drive toward effective strategies and greater impact:
- Recognize that this opportunity is not about giving more philanthropy, although that’s important, too. It is about making new, highly strategic investments in people, processes, and R&D that make social impact a highly strategic and valuable component of your business.
- Identify what your company and people do best and prepare to apply those skills and resources toward social challenges big and small. Generate a list of assets you might bring to the table, and carefully consider that how you do your work may be more valuable than what you do. Remember to include your skills, processes, access to data, relationships, and marketing reach, among many others.
- Find your niche. Dedicate the time and resources to clearly understand and define the social challenges you want to address. Do not quickly jump toward activating the best sounding solutions; trust in a collaborative process is a must. Integrate and apply user-centered design, system thinking, product development and other approaches to articulate problems and innovate around them. Keep in mind that although you may be the best at building a better mousetrap, the real challenge may be to help change the end-user’s behavior about how they store their cheese.
- Position your social impact work within a branded signature platform that guides, connects and simply communicates your diverse and often complex initiatives. Use this platform to bring your corporate purpose to life, providing a “true north” and call-to-action that inspires employees, customers and business partners to take action. As you collect wins and learn through failures, craft and tell authentic stories about how you are leveraging your unique assets, engaging others, and improving lives.
The time is now to create a “new normal” where companies view social investments as a continuous imperative to business success. Bottom line: If executives don’t take advantage of the opportunity today and strategically guide part of their tax windfall toward addressing social impact, in the future it will be even more challenging to unlock these resources and unleash their potential to further strengthen business and impact society. Inaction jeopardizes our communities, and perhaps the very investor relationships that have historically enabled companies to drive forward.
Mark Feldman is the Founder and Managing Director of Cause Consulting, a social impact strategy and communications firm dedicated to simultaneously strengthening business and impacting society. firstname.lastname@example.org.
Image source: Pixabay / rawpixel