‘Business Schools should be extremely nervous’

One of the benefits of going to big global conferences is that you meet old colleagues and friends. So I was very pleased to bump into Peter Lacy (now Managing Director Accenture, Sustainability Services, Europe, Africa and Latin America). I enjoyed working with Peter while he was Exec. Director at EABIS (an association of businesses and academic institutions to boost CSR in Europe) and built up the organization in the early/mid 2000s.

Peter was here, among other things, to present a Survey on CEO perceptions of the Sustainability topic which I mentioned earlier in another post. I won't bore you with some of the bickering raised here (too small sample of 'converted' companies, CEO rhetoric is no data etc.) since it does not jeopardize the main message of the research: that sustainability is now clearly on the strategic agenda of many major companies and in fact 93% of surveyed CEOs globally see this as a key imperative. No more just an 'issue', a blip on the screen, as it was ten years ago. Though Peter told me, too, that the survey probably just hints at the sheer magnitude of the task ahead, which is implementation. He is a little cautious about some of the statements in the report regarding implementation in these companies as of now, but his main point is well made: what about those non-UNGC members and other companies, who aren't even yet in the strategic stage?
Since Peter knows both worlds, business and academia, I was also interested in his view on what the survey means for us in the ivory tower. Two things emerge. Since one of the findings was, that the investment community cares next to nothing about sustainability, Peter thinks we need to develop tools to make the actual value of sustainability more explicit. This is closely related to performance management as – given current business practices – only if I can give sustainability as a measurable task to my crew, I can reward and assess them on success.
But the main point he made was that in his view, business schools in general have not even entered the first 'issue' stage and are lagging behind their main target audience by – mas o menos- a decade. Of course, he hastened to add - that he is aware that there are a good number of schools out there which have understood the challenge and are able to provide education of managers with regard to sustainability issues. But personally I could not agree more that by and large, business schools are still largely operating within an agency-, efficient markets- and shareholder value-framework. This applies certainly to many of the top North American and European schools. And while this is bad enough I would add that this thinking is still dominating our research by and large – and today's research is the teaching material ten years from now, as Peter put it. He added that from his current work of running a department of 800 staff, in recruitment he finds precious few candidates trained by business schools in sustainability. So Peter's message was that business schools really need to take into account the changing imperatives for business – otherwise business might more and more look for other sources of education (something which came already up in an earlier post).

'Business Education has Become an Industry'

So here we are. As hot as the weather is in New York, as hotly contested is the role which business education has played recently in making for more responsible companies. At the PRME 'side event' of the UNGC Summit some rather soulsearching questions were raised. Rakesh Kurana from Harvard made it quite clear that one of the dilemmas of b-schools in fact is that they have come to see their students rather as ‘customers’ then people who need education and at times been served a diet that needs some acquired taste. Just to blame the business world for lack of demand for issues of CSR and ethics is not enough in a world where the public increasingly worries about the status of wider societal impacts of business.

While the Accenture Study (in cooperation with the UNGC) of the opinion of more than 800 CEOs suggest a slightly different picture, it leaves us with one general problem: Since business education, certainly at postgraduate/MBA level is in fact privatised and ‘purchased’ by students or their companies, this inherent tension cannot be denied. One of the reasons I personally have started to dislike teaching on MBA – or worse – executive MBA – programs is exactly that it is a tough challenge to make students think, reflect about things unknown or strange to them and, most notably, to read. And the issues the UNGC is concerned about fall exactly in this category.

Interesting comments came from India, delivered by Jamshed Irani, Director, Tata Sons Limited. In his view, since business schools don’t do a good job (in general) at talking about climate change, ethics etc. corporations should have their own universities and b-schools. Yes, you havn’t misheard. I guess this reflects a tradition of a great company with a long tradition of philanthropy and ethics, such as Tata. But what about a b-school run by AIG, BP or Lehman Brothers? Just imagine the type of ‘leaders’ we would get from there...

So far the UNGC summit (i.e. this fringe event) put the finger on one important thing: with delegating responsibility for public goods (and education used to be one) in the hand of private actors, we have opened a pandora’s box. Its irreversible, I think (as the Hewlett Packard Chair in CSR, no less). But we need new criteria for private responsibility for public goods in order to change this focus within b-schools. How this will be achieved – no real answers so far from New York.