On Money as Narrative

“Larry’s Letter” — or when the story of our real goals is too boring to tell.

In December 2017, Larry Fink, CEO of a 6 trillion dollar fund management company sent an open letter to his portfolio of household brands including Amazon, Facebook and Johnson & Johnson requesting a better articulation of strategies that do long-term good. His argument is mundane: short term profit is not enough profit. More profound is how the request put companies in a double-bind: suddenly, the story of how both “good” and “money” is made had to be one and the same. A few days later at the World Economic Forum in Davos, a heated debate ensued that completely fails to spot the real issue at hand: if money is the goal, the story simply isn’t worth telling. There is a better way to approach this narrative.

The controversy around Larry Fink’s letter can be easily summarized with two widely published entries. The first is an excerpt from the only section that matters for the discussion:

“Without a sense of purpose, no company, either public or private, can achieve its full potential.”, Larry argues, “It will ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures to distribute earnings, and, in the process, sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth.”

Now, the other side: Charles Lieberman of Advisors Capital Management captured the sentiment of those who thought Mr. Fink would do us all a favor by staying in his own lane:

“Society and Larry Fink seem to have forgotten that companies serve a critical public purpose by supplying their goods or services to their customers and firms pay taxes, financing the government’s policies. Whom does Fink think should be appointed to judge whether the companies adequately meet his objectives?”

The value of money is narrative

There are two reasons the discussion above is a narrative problem. Firstly, the snarly debate between fund managers — like so many wasted debates — will simply yield further polarization because it is focused on two solutions without anchoring in a problem we can measure against. We have to talk problem before we talk solution. Methamphetamine is a growing and profitable business. And Payday Loans offer a product that customers want so much they can charge somewhere between 250% and 2,350% interest rate (from their official site at time of writing). Neither meth nor Payday Loans solve any real problems long term, and they will therefore always struggle to tell a meaningful story of what they do apart from making money.

A narrative lens however, will focus on the story that the company and its customers participate in. It would start, like all stories, with a single obstacle or problem that needs addressing. All story needs conflict. Money however is the opposite: it’s a solution. It can be a narrative hero when applied to solve something. But no one likes and eager hero. And money is a solution looking for any problem that will have it. Hero’s don’t need to be perfect, but they do need something to do. Or we lose interest in the story.

Corporate virtue-signaling

Secondly, money is a perfect story problem because money hold zero value by itself. The value of money is determined by the plans that we have for it. If the plan aims no further then piling up more money, the story is weak and not worth telling.

When Larry Fink asks for a long-term strategy articulated, it exposes a lack of goals worth talking about beyond simply making money. The knee jerk reaction to compensate is often to highlight some ad-hoc politically correct and non-controversial good behavior or how many jobs are created. But the “good behavior” has likely nothing to do with the core business, and at best confuse the core story to appear insincere and opportunistic. And for those who work at that job “created”, no real meaning has yet been provided to all the years on-the-clock invested. What if all that work created more problems for others than it solved? We try not to ask, and in a pinch will justify our daily grind with survival. Business apophenia, if you will.


An additional problem stemming from a true lack of purpose for a business is the nickel-and-dime-economy it creates: the core business is not how they actually make their money. Let’s pick on Wells Fargo because their case has been tried in court. Banking they do, yes. But a substantial part of the profit comes from overdraft and late-fees. Approximately 30 billion dollars last year were made by banks in the US alone from late fees and overdraft fees. The worse a bank perform its core businesses, and the harder they make it for their customers to handle simple transactions, the more money they make. You can’t turn that into a sincere story that we would rally behind.

That leaves you three options: say nothing, witch is the problem Larry is trying to highlight in part because it leaves you vulnerable to those who have a strong story: activists. Second option is to argue — like the other fund-manager did — that if customers and buyers come to an agreement, all is good and no one has the right to judge that agreement. The third option is to do the hard narrative work: to extract the story that does make sense, and start weaving in as much of the business as possible. Even if that creates painful exposure, the articulated story will at least hold together.

Do companies have to do good? Yes. They do. But let’s be careful with how that is defined. Most corporations were not founded to support gay pride parades, cancer survivors or the spirit of Christmas. And that’s OK. But they should — without exception — be founded, and funded — and run — to solve problems that are of importance. And they should be able to articulate that to the world around them. We are trying too hard with advertising and charity to drum up stories that deflect from the real plot. Loud noise and colorful distractions are tell-tale signs of a weak narrative.

Money as a resource vs. Money as a goal.

Narrative is the great litmus test. Larry Fink should have asked: What big and important problem is your business solving. Narrative is also a tool to provide uniquely creative answers to sincere questions. Even if the story isn’t obvious or watertight, a narrative approach will highlight what works and what is weak and can be very creative in merging contingencies under a common purpose that matters. That is how story is written: backwards and forwards at the same time. What can’t be written but has to be earned with courage: the choice of a story that is ambitious enough for the world to care.

Larry’s letter got close enough in asking a real story question to make many uncomfortable. But it did not reach all the way to a narrative solution. Because the trillion dollar fund manager never answered his own question: is his goal more money, or is it a resource to accomplish something more important. The latter would have made for a better letter.

And of course, for a much better story.

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For more articles in this series on Story and Narrative as Tool, please see : https://medium.com/@johan_38106