Founded 25 years ago, BlackRock has quickly become not only the world’s largest asset manager ($5.7 trillion under management), but also the dominant leader in the fastest growing investment product; exchange-traded-funds (ETF’s). The company went public in 1999 for $14/share and today BlackRock’s stock trades in the $465/share range. Over the past 5 years, it is up +145%. Separately, a recent Harvard Business Review (HBR) article reported on research dealing with the role of “sense of purpose” in enabling companies to attract top talent and achieve strong results. They single out BlackRock as a prime example.
The HBR authors noted that what interested them in BlackRock was the palpable sense of pride that seems to drive them to continually excel. They claim that the thing that makes BlackRock different is the fact that the whole organization seems to be driven by a very concrete and explicit mission; “to create a better financial future for our clients.”
The CEO, Chairman and Co-founder of BlackRock, Larry Fink, summarizes BlackRock’s success in the following way “what makes a game-changer in my mind is that our mission and purpose is crystal clear (to create a better financial future for our clients); it has never changed, and never will. We are maniacal about driving high performance.”
Stepping back, one could easily say that all financial institutions probably believe that they are trying to create a better financial future for their clients. What makes BlackRock different is that they have configured the whole company to constantly address and achieve that purpose. Here are the three things that BlackRock seems to do very well and I believe are critical in driving a genuine sense of purpose in the organization:
1.) A Simple and Aspirational Purpose Statement – The organization needs to understand it instantly and be able to play it back easily. The BlackRock story reminds me of my days at Microsoft in the 1990’s, when the company had the following purpose statement that created a strong sense of being part of something really significant. “A personal computer on every desktop and in every home.”
2.) Organization-wide, Constant Communications – It is imperative that everyone constantly be reminded of the purpose and that it be the core building block that drives all actions.
3.) Recruit Top Talent by Enrolling Them in the Cause – People have always sought meaning in their lives. In recruiting talented people, don’t under-estimate the power of making sure they understand the deep sense of purpose the organization represents.
As the HBR article points out, sense of purpose can be a powerful driver of success and collective pride and unity.