This verse is part of the first recorded Divine communication to the Patriarch Abraham, in which God promised him various rewards if he left his homeland and went to Canaan. One of the rewards was "you will be a blessing," meaning that he would be given the power to bestow blessings on others (Rashi).
The same Hebrew phrase can also be read: "you shall be a blessing," in the imperative. In other words, God commanded Abraham to lead the kind of life that would make his very presence a blessing to everyone in his environment.
In Generation to Generation (CIS 1986), I related that my mother told me how excited and elated everyone was when I took my first steps. An itinerant rabbi who collected funds for a yeshivah was also there. He sadly commented, "When I first walked, my parents were delighted too, but now no one is delighted when they see me walk in." My mother related this comment to me many times, and one of my goals in life has been to fulfill my mother's prayer that people should not be displeased when I walk in.
Abraham received many Divine blessings, but along with them came an assignment: he was to make himself into a blessing. If we read on, we can then understand the continuation of the above chapter, Abraham went as God had commanded him (ibid. 12:4); i.e. he conducted his life in such a manner that he was indeed a blessing. The commandment to Abraham was intended for all of his descendants. By living a spiritual life, we can both endear ourselves to everyone and be a blessing to our environment.