Training a New Generation of Business Leaders

Training a New Generation of Business Leaders

Three MBA programs emerge at the forefront of sustainable business education. By Alison Weeks



Business as usual is in trouble. Corporate scandals fill the news, as accounting and ethics debacles spread from Enron and WorldCom to the financial services industry and throughout the economy. What is the human and environmental impact of financial gain at any cost? What role does business education play in the problem, and in the solution? Can the new generation of MBAs help us out of the mess we're in?

There is an emerging trend in business education that seeks to integrate traditional management with the values of human and environmental sustainability. As this trend develops, three new MBA programs dedicated to the interface of sustainability and management provide an indication of what may be the future of business education.

Training future business leaders in finance, strategic management, and analytic reasoning continues to be the province of business schools. In the U.S., more than 100,000 Masters degrees in business are conferred each year (source: Beyond Grey Pinstripes, 2003). Business schools are beginning to address social and environmental issues, but there is wide variance in the depth and integration of sustainability. Though business schools are traditionally ranked on outgoing salaries, job placement and test scores, there is increasing pressure to take sustainability and social justice more seriously. This pressure comes from all sides: employers, MBA alumni, faculty and students.

Significantly, the largest push for change comes from business students themselves, who understand that the dangerously narrow focus on shareholder value has wreaked havoc with people, the environment and corporate profits as well. In a recent study of students in 12 international business schools, "half of the students surveyed acknowledge that the priorities communicated during the MBA program may have been a contributing factor in corporate misconduct" (source: Aspen Institute Business and Society Program, 2003, p. 4).

New organizations represent the growing voice of business students in sustainability. Founded in 1993, as Students for Responsible Business, Net Impact is a network of more than 9,000 emerging business leaders and MBA students in more than 90 student and professional chapters around the world. Their purpose is to "use the power of business to create a better world," and their growing presence in business schools is helping put pressure on program administrators and faculty to address social and environmental issues.

New centers and institutions for research also contribute to change toward sustainability in business schools. At UC Berkeley's Haas School of Business, Dr. Kellie McElhaney leads the newly established Center for Responsible Business. George Washington University faculty member Mark Starik worked to establish the Organization and the Natural Environment group of the Academy of Management, helping to gain legitimacy for environmental issues in business education.

Sadly, business faculty interested in promoting sustainability in their traditional institutions also report feeling marginalized for their areas of emphasis, but continue to steadily promote change from within.

There are other organized efforts that are helping to fuel change in business education. Environmental think tank World Resources Institute and The Aspen Institute's Business and Society Program publish an annual ranking of business schools, Beyond Grey Pinstripes, which evaluates business schools on how well they address social and environmental issues. "Faculty Pioneer Awards" also acknowledge contributions by business school professors who are leading the efforts. The most recent report put 36 business schools into three categories: schools on the cutting edge, schools with significant activity and schools with moderate activity. Other indicators include faculty research on related topics and extracurricular activities such as student-initiated conferences and seminars on business and sustainability.

Traditional business schools, as institutions of higher education, can be slow to change, but there are some promising signs. According to Beyond Grey Pinstripes, though there has been only a marginal change in the number of core courses with social and environmental content, experimentation with elective courses is on the rise. Some examples include "Business as an Institution of Society" at Loyola Marymount and "Sustainable Venturing" at the Leeds School of Business, University of Colorado at Boulder. Fully 45% of the schools surveyed require at least one course in ethics, corporate social responsibility (CSR) or sustainability. Unfortunately, integration of those topics into the core curriculum, such as accounting, finance, and marketing, remains limited. When Ethics is outside of the core curriculum, what message is being sent to MBA students about the priority and challenge of leading an ethical organization?

Extracurricular activities also contribute to the growth of sustainability in business education. More than 700 conferences, seminars and speakers make up the landscape of outside activities at business schools. Cornell has a "Sustainable Enterprise Symposium," and Northwestern hosts an "Innovating Social Change" conference. Student-driven events such as George Washington's GESPA, a student group for environmental and social professionals, co-sponsored a panel discussion "Sustainable Production and Consumption," while Harvard's "Social Enterprise Club" sponsors an annual conference on different sustainable business themes.

Employers are playing a role in this new wave. According to Hunter Lovins, the majority of the 150 largest corporations now have something equivalent to a sustainability officer. According to a study conducted by the U.K.-based magazine Ethical Corporation and the U.S.-based consulting firm Political and Economic Link Consulting (PELC), over the past five years, 74% of companies have increased their investment in CSR staff, 72% have raised their CSR budget, and 68% have top executives who devote more time to CSR issues. And this demand for MBAs who understand sustainable management seems to be on the rise. A recent Arthur D. Little study of Fortune 500 CEOs reported that though 90% said, "sustainable development is important to their company's future," only 30% say they have the "skills, information, and personnel to meet the challenge." Employers need new skills and they will be looking toward business schools to provide them.

Even with some signs of change coming out of the more traditional business schools in the direction of sustainability, a number of educators didn't think these traditional MBA programs were doing enough to affect real change in business. Three new programs -- two of them brand new schools -- have been founded in the last several years to offer a more integrated approach to sustainable business education. Presidio World College, Bainbridge Island Graduate Institute and New College of California -- all West coast-based -- offer MBAs in sustainable business, each with unique areas of expertise, but all integrating sustainability into the core business curriculum.

New Integrated Programs

Presidio World College as an affiliate of Alliant International University, launched its MBA in Sustainable Management with a cohort of 22 students in Fall 2003. The program is a full-time, accredited, two-year MBA program that integrates social and environmental issues into every course. The program was designed to be convenient for working adults, meeting one three-day weekend per month during the semester, with online learning work between the face-to-face sessions.

As renowned sustainability expert, co-author of Natural Capitalism, and Presidio World College faculty member Hunter Lovins says, "What we're doing has just never been done before. I couldn't go to an established, traditional business school and teach what I'm teaching here. Instead of sustainability being integrated into the entire program, it would be a tag-on course to a conventional, single bottom-line program."

"When we looked around at business education, we realized that nobody was doing what we wanted to do," explains Presidio World College MBA Program Director/Integrator Doug Paxton. "Traditional business schools were offering elective courses in 'environmental management,' but the broader issues were not getting in the core curriculum. We also felt strongly that sustainability meant a lot more than the environment, and had to include a human dimension."

Hunter Lovins, in speaking about the human dimension, says: "The thesis of Natural Capitalism has yet to receive a credible criticism. Business author Peter Senge has called it 'the bible of the next industrial revolution.' However, the question is then, if this makes so much economic sense, then why aren't people doing more of it? The short answer: people are simply not just economically rational. There's a reluctance to take risks. These issues exist at every level - globally, organizationally, and individually. This begs for the need to address human issues in business education."

The PWC MBA in Sustainable Management is organized around four curricular strands: Money/Numbers, Market, Sustainability, and the Human Dimension. On the surface, the curriculum looks quite similar to the traditional MBA, because the values of social and environmental responsibility are integrated right into the traditional fare.

Located in the heart of San Francisco's decommissioned military base turned urban national park, the Presidio is ideally suited for a new college focused on sustainability. The congressional charge of the Presidio, beyond becoming financially self-sustaining by the year 2013, is to be an international center for research and education in sustainability.

Presidio World College student Lorin Troderman is an entrepreneur, and along with his wife, Jill, runs Blue Lotus Blankets, a small California-based company that manufactures and sells blankets made from recycled plastic bottles.

"I joined this program to figure out how to be more successful," says Troderman. "We run this business with our values first, and that means sacrificing those values is not an option for us. But I wanted to learn the skills, tools and strategies to build on those values and be able to compete effectively in the marketplace."

As Presidio World College was busily recruiting its pioneer cohort of students, they met founders of Bainbridge Island Graduate Institute and business leaders/authors Gifford and Libba Pinchot and realized they had company in the emerging field of sustainable business education. Bainbridge invited Presidio World College staff to take part in their first on-site residency in September 2002, beginning a collegial exchange of program ideas and faculty that continues to this day.

Bainbridge Island Graduate Institute (BGI) based on Bainbridge Island in Puget Sound, Washington, launched the MBA in Sustainable Business two years ago. Similar to that of Presidio World College, their MBA program fully integrates environmental and social responsibility into all of its courses. Their program features three short residential intensives in the Pacific Northwest each term, supplemented with distance learning and mentoring. BGI currently has 37 students and is graduating its first class this May.

"MBA programs everywhere have begun to recognize the importance of sustainability in business, but are slow and ill-prepared to make the necessary changes," says Rick Bunch, former business education director at World Resources Institute and now the BGI executive director. "BGI is creating a model other schools can emulate, and proving that business demand does exist for MBAs with sustainable management skills."

BGI's founder and chairman Gifford Pinchot says their MBA program integrates the tools and concepts of a traditional MBA with the new business practices leaders need to move toward sustainability and broader social responsibility. "BGI's students learn to achieve business success while serving their deepest values," says Pinchot.

BGI student Kelly Scott-Hanson, the CFO at Cohousing Resources says the school "has given me the confidence to reach farther because I feel as though the faculty understands and supports my earth-friendly objectives. They problem-solve with me to help my business grow but within my sustainability goals. I wouldn't even be able to ask these questions at a 'mainstream' business school."

New College of California offers the Green MBA -- or MBA in Environmental Entrepreneurship -- program to "prepare leaders for the necessary and inevitable transformation of business practices in this country and the world." Based in Santa Rosa, California, the Green MBA trains students with strong environmental and social values to successfully advance their initiatives. The five-semester, full-time program uses a project-oriented approach that integrates the development of entrepreneurial skills with the building of critical thinking and leadership capacities. Classes meet on two weekends and one weekday per month for 20 months.

"Students discover that there is no shortage of opportunities for those who are willing to take initiative," says faculty member and program coordinator John Stayton. "There is so much to be done. We will need many more ethical profit and non-profit enterprises to take advantage of the opportunities for environmental restoration and social healing. And we will need skilled change agents to transform existing businesses and government institutions. The seven faculty members like to keep classes small, rarely exceeding 15 students, because of the high level of student involvement and student-faculty interaction inside and outside of the classroom."

Indicative of this new trend in business education, there is a feeling of camaraderie among the three new programs and a willingness to exchange ideas and help one another succeed. Although the three schools have no formal partnerships, they do recognize they have similar programs, each with a unique distinction, and agree that having more colleagues in this budding field is an advantage. "We're hoping to get together with the other [Sustainable MBA] schools this summer," says Bainbridge Island Graduate Institute Operations Director Halim Dunsky. "Our goal is to exchange ideas and best practices that will contribute to the growth of sustainable business education. Essentially, we're learning as we go."

As Albert Einstein reportedly said, "You can't solve a problem with the same consciousness that created the problem." The new trend of integrating sustainability into traditional MBA curriculum offers the opportunity to take the best of business education, and expand the consciousness for how business does business.

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Alison Weeks is Director of Operations and Student Services at Presidio World College.

This article has been reprinted courtesy of GreenMoneyJournal.com. It first appeared in the Summer 2004 issue of that publication.