shutterstock_130460555By Christina Meinberg, Associate Director

I give a lot of credit to Anand Anandalingam, Dean and Professor at University of Maryland, Smith School of Business, who recently said what had been assumed in numerous conversations at the recent AACSB Sustainability conference:  “Business schools are under siege. We have done a lot of bad things.”

He did not say this out of context.  What he was pointing out – with great humility – is that business schools have been humming along for decades, cranking out graduates who are programmed to follow the twin tenets of expansion and consumption… teaching, and many times not questioning, an economic growth model that implicitly assumes we live and operate in a planet with infinite resources.

We live in an interesting time.  On the one hand, the stereotypical MBA has become a wizard at building quantitative models, analyzing data, and coming up with “innovations” to eek out more quarterly profits.  When I was a b-school student (less than a decade ago), I’ll never forget getting ‘dinged’ during an interview with Kraft Foods after giving the wrong answer to the question, “If we dominate the shelves in peanuts, should we make a move to own snack bars, too?”.   I personally felt that the 30-some granola bar-like offerings at the grocery store were enough, and answered the question with a question.  But apparently the right answer was “Yes!  Growth – expansion – domination!”.  I’m sure they hired another, more “prepared” MBA…

This analytical dogmatism, Anandalingam recapped, has been blamed for opening the doorway for greedy bankers to manipulate the financial system, leading to the recent banking crisis.  By placing a relentless focus on shareholder value and growth at any cost, and encouraging short-sighted behaviors such as taking net profits to be the key indicator for success, we have taken the ends to be the means, silently yet surely removing any values from the conversation.

On the other hand, I see more and more students and educators feeling moved by the wreckage they see all around them (and on the horizon), from resource scarcity to poverty projections to climate change and beyond.  They understand the business term “capital” but not in isolation; they also understand concepts such as ecological overshoot.  Sure, they are interested in making a living, but they also understand that we’re currently eating our own capital… natural capital, that is.  And we only have a few decades left to do that comfortably.

As students enter into school with aspirations for making a difference in the world, wouldn’t it be beneficial for them and society if these visions were fostered and incubated? Yet in some ways b-schools have their hands tied; Financial Times’ Global MBA ranking (and other popular measurements like it) primarily measure salary upon graduation and 3 months out, leaving it hard for schools to justify sending students off to create their own ventures or seek alternative career plans.  An Insead professor stated recently that “Students come in with a more rounded view of what managers are supposed to do but when they go out, they think it’s all about maximizing shareholder value.”

B-Schools at a Crossroads

For these reasons, business schools are at a crossroads.  Schools have introduced ethics courses in response to various crises for decades, and yet the crises seem to be getting bigger and bigger.

So, how should these organizations reflect and question their own methods for preparing participants to become leaders, innovators and creators?  How can we break out of the analytical straightjacket to inspire more of a sense of stewardship for the world around us? And perhaps, bend some of the unsustainable paths that our society is currently pursuing?

A fellow AACSB sustainability conference attendee explained the answer to this question very simply:  “We have taken the values out [of business and management education]… and now we’re putting them back in”.

I think this is true.  The statement made me appreciate Berkeley-Haas’ defining principles and how important they are in recruiting exceptional staff and students. But more importantly, I’d like to state something I’ve come to learn from working inside this culture:

For sustainable management to be carried out in a strategic and interdisciplinary way, an organization’s values must be tied to it. 

Values Let You “Change Everything”

Given the laundry list of the world’s most important issues, why should we focus on values? In an HBR article, former IBM CEO Sam Palmisano recounts his experience refreshing IBM’s culture, stating:  “values let you change everything, from your products to your strategies to your business model, but remain true to your essence, your basic mission and identity.”

He went on to say he believed that a “values refresh” could once again help guide IBM “through major change [to] meet some of the formidable challenges we face”.  One of IBM’s core values, as determined by a 72-hour, all employee “values jam” is “Innovation that matters, for the company and for the world.”

According to a NYT article, “IBM [was] a textbook case of how to drive change in a big company” durng Palmisano’s tenure there.   In Palmisano’s last year as CEO the company was rated #1 in the US (and #2 globally) in Newsweek’s Green ranking.  While most companies were pulling back during the recession, IBM invested in big projects such as artificial intelligence and Smart Planet, landing it record profits and the 18th rank in the Global Fortune 500 list.

Leaders Set Culture

“Leaders set culture,” Berkeley-Haas Dean Rich Lyons reminded an audience of management educators, in a lunch-time keynote at the AACSB conference.  It is important for those working inside the tentacles of any organization to pause, reflect, and ask whether your organization’s values lend themselves towards building a sustainable future.  At Haas, Dean Lyons has really taken time to double-click on a basic yet critical question: “What values do we need to have in order to produce path-bending leaders?”.

Let’s think about this in the corporate context.  Unilever instantly comes to mind, which has been ranked one of the top 25 companies for leaders in a global poll by Fortune magazine.

Unilever’s Sustainable Living Values state that they “aim to be a ‘trusted corporate citizen’ wherever we operate in the world, respected for the values and standards by which we behave.”  As the third largest consumer goods company in the world, Unilever has undoubtedly had to be very intentional about decoupling its growth from environmental impact. To increase to longer-term thinking, the company has abolished publicly giving quarterly earnings reports, aligned management incentives for the long-term and now “delivers” on a 6-month or 12-month basis.

Unilever’s Global VP of Marketing, HR and Sustainability, Geoff McDonald, emphasizes the importance in linking to human resources and advises companies to put as much effort into culture-building as they do when they create sustainability strategy.

Acknowledging the Value in Values

When you reference the MBA degree, it elicits a lot of different responses depending upon the person you are talking to.  Anandalingam pointed out the view that some people indeed have about the MBA degree, based upon a relentless focus on driving shareholder value, which detaches students from society.   But fortunately he also believes that the education sector, and business schools in particular, play a key role in moving us forward in terms of sustainability.

Hundreds of thousands of students – armies of highly motivated and intelligent future leaders in business and society – are graduating with MBA degrees each year from schools around the world.  What if these students were empowered to take the values they have at home and bring them into the workplace?

Management educators ought to think more creatively and deeply about the power they have to bring purpose and values back into the lifeblood of their schools.  By more clearly signaling the kinds of behaviors that will be supported or frowned upon, a strong culture can be formed.  And as we have seen with Unilever and IBM, there is a ripple effect from there.

Setting up a Path-Bending Culture

When Berkeley-Haas took inventory and ownership of its values a few years ago by putting the stake-in-the-ground around 4 defining principles (question the status quo, students always, confidence without attitude and beyond yourself), this opened the door to new approaches in recruiting and teaching.  We have since modified our application process,for instance; undergraduate applicants are now asked to explain which Haas defining principle they personally need to “work on” most.

We have also added a course called “Problem Finding, Problem Solving,” which all MBAs take; it provides students with a toolkit for framing up problems (as opposed to merely pitching solutions).  Incorporating our defining principles into our culture has therefore led to a critical outcome: MBAs aren’t just learning about sustainability as a “buzz word” but are now being asked to identify and therefore more fully understand the “wicked” problems they want to go out and solve.

This is only one example of a step taken towards escaping the straight jacket (what? Sticky notes and creative thinking in the MBA core?); but there can be so many more.  Business schools with a genuine interest in equipping graduates to steward more than just their own career success have an unbelievable opportunity to incubate the kinds of graduates who will move the needle within the organizations they lead in the world.

When leaders in management education carefully consider and articulate the values they expect their graduates to espouse and live up to, we can all benefit for generations to come.  The public will take notice of those they have inspired to lead transformative change in business and society during a time when leadership is so desperately needed, rather than recalling the ranking of the school they attended upon graduation.

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