Last month, JP Morgan Chase announced plans to invest $40 million in Chicago to battle poverty and violence through economic growth. This sum – the bank’s second-largest investment in a single city – will fund job training, small businesses expansion, neighborhood revitalization and personal financial health programs in Chicago’s South and West sides.
This move marks an expanded wave of corporate community involvement, in which companies reach beyond their walls to partner with public, private, and nonprofit organizations to build local prosperity. The business case? “If the economy is growing for everyone, that’s a good long-term bet for our shareholders,” says Peter Scher, head of Corporate Responsibility at Chase.
“We’re not arrogant enough to think that we’re going to come in and solve a problem,” says Scher. Change happens through influence rather than fiat, only after trust and good working relationships have been established with community partners. Community solutions must go beyond symptom relief to understand and alter the root causes of social ills. Change efforts must be sustained over decades, not just quarters.
Collaborative community work to solve “wicked” social problems requires a different kind of leadership than running a single company. These are the four common qualities we see across successful CEO-led community prosperity initiatives.
Leadership for Long-Term Community Prosperity
- Set the Right Tone
Successful business leaders forge relationships with established community groups. They seek to understand what people are already doing to address local issues, honoring their priorities, and working to identify shared goals. They are humble, respectful, and inclusive.
In 2016 Rush University Medical Center launched the Chicago West Side Total Health Collaborative, inviting 120 people representing 47 community-based organizations to an inaugural meeting. The Collaborative is a cross-sector partnership that aims to build community health and economic vitality on Chicago’s West Side. Collaborative members are now embarking on a listening tour across West Side communities, with the view that residents are the experts who are best able to define problems and solutions.
“Companies bring critical business discipline to community change: a relentless focus on results.”
Similarly, Chase learned that writing large checks didn’t have much impact, and so changed its approach in Chicago and Detroit, another investment region, to partner more closely with established community groups.
Setting the right tone of leadership often starts at home. CEOs who lead the Itasca Project, an employer-led civic alliance working on economic vitality and community well-being in the Minneapolis-Saint Paul region, wanted to close gaps in employment and labor force participation between whites and people of color. They began by convening CEO members to examine their own attitudes towards diversity, and to improve their companies’ hiring and workplace practices. Each CEO was tasked to reach out to local citizens of color, meeting informally over coffee to better understand their workforce experiences. Says Brad Hewitt, CEO of Thrivent and co-chair of Itasca, “CEOs have to commit personally to diversity as a strategic and business-critical issue.”
- Committed Caring
Company leaders earn convening power only if they demonstrate a commitment to a larger purpose beyond their own business success. This means separating community investments from business profit, and investing for the long term.
Chase won’t directly profit from their Chicago investment, at least not in the short run. Opening bank branches in the target communities is not part of the plan, and Chase won’t profit from grants to partner organizations.
Rush University Medical Center elevated the achievement of community health and economic vitality as one of its four key strategies. A new senior leadership position with a focus on community health equity was established. In the next fiscal year, for the first time, a community focused performance goal will be on the corporate dashboard.
“This kind of work has to go beyond the CEO. It has to be embedded in the organization’s strategy and mission, and supported by the leadership team, the board, and the entire organization,” said Larry Goodman, CEO of Rush.
- Pragmatic, Not Partisan
Companies bring critical business discipline to community change: a relentless focus on results. “The key is to have a learning agenda, always be evaluating, and if something’s not working, move on,” said Whitney Smith, executive director of Chase’s global philanthropy for the Midwest region.
Talent 2025, a consortium of over 100 CEOs working on talent development in West Michigan, uses a structured community change process modeled on lean manufacturing and design thinking used by firms like IDEO. The process relies on high quality data to understand complex community problems, identify good ideas that can be scaled, and stop pursuing bad ideas that aren’t producing results.
A data-driven results focus means that rather than becoming mired in ideological and political debates, business leaders can focus on launching pilot innovations, collecting data, and measuring impacts to test whether early efforts are achieving desired outcomes.
- Passionate Championship
Community partnerships run on volunteer energy, and this is especially true for business leaders. CEOs get engaged and stay engaged when they can pursue their personal passions.
Itasca launches new initiatives only when at least one executive is committed to leading it, in collaboration with regional partners. “Our model isn’t a chamber of commerce, where you pay your dues, and in return you get access, lobbying, and maybe an event. We expect people to lead action on the ground,” say Justin Freiberg and Julia Silvis, McKinsey partners who work closely with Itasca.
Salesforce CEO Marc Benioff and his wife got engaged with the issue of family homelessness after they read a local news story about a homeless boy named Rudy. The Benioffs were alarmed to learn that approximately one in every 25 public school students in San Francisco was then homeless. In 2016, the Benioffs joined with other businesses leaders, local government agencies, school districts, and nonprofits to launch the Heading Home campaign, a $30 million partnership. The aim is to eliminate family homelessness in San Francisco by 2019.
In the hands of some visionary CEOs, a new wave of corporate citizenship is directed towards building local prosperity at home. With the right tone of leadership and business focus, they are exerting significant impact on the communities they serve by working in partnership with other community leaders.