Feature of the Week

October 31, 2011 1:12 am

Sustainability lessons from the boardroom

By Sarah Murray

In one of his finance and sustainability classes at Columbia Business School, Bruce Usher likes to talk about fishing. Citing the “Catch Shares” system, which allocates a right to harvest a percentage of the total catch to individual fishermen as a means of preventing the depletion of fish stocks. The theory, he says, is simple. “But it’s not easy to take a system of fishing used for thousands of years and suddenly implement market tools,” he says.

Prof Usher, who from 2002 to 2009 was chief executive of EcoSecurities, a carbon credit and consulting group, is one of a growing number of former chief executives hired by business schools to teach MBA students how to build environmental and social considerations into corporate strategy.

In some ways this is nothing new. Business schools have often invited practising business people to talk to MBA students. This is particularly true in the area of sustainability, where schools have been racing to meet the voracious appetite among students for content on issues such as climate change, resource efficiency and poverty mitigation.

However, a growing number of former corporate chiefs now find themselves teaching sustainability from behind business school podiums as adjunct professors, with some in full-time positions. These include Prof Usher, who is co-director of the Social Enterprise Programme and an executive-in-residence at Columbia, where he has been an adjunct professor in finance since 2002.

Growing demand for social and ethical content

The recent results of this year’s Beyond Grey Pinstripes survey revealed that in the wake of the financial crisis, demand for MBA course content on sustainability is increasing.

The survey, by the Aspen Institute, is a biennial ranking of how well business schools integrate social, environmental and ethics content into their curriculum. The institute analysed submissions from 149 schools from 22 countries with data covering more than 6,000 course descriptions and more than 6,000 faculty research abstracts.

This year Stanford Graduate School of Business bounced back into the top slot, having fallen to fourth place the last time the survey was conducted in 2009.

Judith Samuelson, executive director of Aspen Institute’s business and society programme, finds the results encouraging. “We are seeing a burgeoning of activity,” she says. However, she adds that just as important as the volume of courses on environmental and social sustainability is the content and the way that it is taught.

“We’re seeing more courses submitted that we can score for business impact. That’s where they’re focusing much more on the business model and strategy as opposed to courses where it’s taught as being about public-private partnerships.”

But she believes schools need to do more work to shift the belief among some faculty that profit is the sole driver of business strategy.

“If shareholder primacy and corporate earnings are the most important tools used to measure success then the environmental story is always going take a back seat,” she says.

At Case Western Reserve University’s Weatherhead School of Business, Roger Saillant, former chief executive of Plug Power, a fuel cell power company, is executive director of the Fowler Centre For Sustainable Value. Since last June, Michael Crooke, former Patagonia chief executive, has been a full-time faculty member at Pepperdine University’s Graziadio School of Business, where he oversees sustainability teaching.

Meanwhile, at Copenhagen Business School, Mads Ovlisen, former chief executive of Novo Nordisk, a healthcare company, is adjunct professor of corporate social responsibility. And before joining UCLA Anderson School of Management as a faculty member and lecturer on corporate responsibility, ethical branding and social entrepreneurship, Jonathan Greenblatt was chief executive of media company Good Worldwide and co-founder of Ethos Brands and Ethos Water (now part of Starbucks).

One reason business schools may want to hire former chief executives to teach their sustainability classes is highlighted by Prof Usher’s fishing industry example. For when it comes to socially or environmentally sustainable business practices, a wide gap exists between idea and implementation.

Energy efficiency is another case in point. By some estimates, companies could cut 15 to 20 per cent from their energy costs if they were to drive energy efficiency consistently through their enterprises. But many have yet to capitalise on these potential savings. In the UK, for example, the Carbon Trust, a UK government-backed advisory, estimates that large businesses are wasting at least £1.6m a year on energy that could easily be saved.

“There’s a lot of good ideas out there when it comes to sustainability and a lot that seem obvious but the reality is that it’s hard to actually do it,” says Professor Usher.

He believes that for those students who want to learn how to execute sustainability strategies, former chief executives have valuable lessons to pass on.

“Teaching the theories and the model is important but it you want to be of service to your students you have to show them how to implement these ideas. That requires a certain amount of practical experience.”

This may be true for the teaching of all the MBA disciplines. “Broadly, having people who have worked at the senior levels in business enriches the learning process for students,” says Linda Livingstone, dean of the Graziadio School of Business, which hired Prof Crooke.

However, she acknowledges that the topic of social and environmental sustainability is one for which practitioner teachers are well suited. “Because it’s a newer field from an academic perspective, sometimes it’s harder for students to see how to apply these things in an organisational setting,” she says.

“So it’s important to have practitioners who can show them how to apply the skills they’re developing anywhere in an organisation.”

Of course, a lot of faculty do have first-hand experience of business, since many take on consulting work for corporations. However, in this work they tend to interact with senior company executives on projects that are highly strategic.

“They’re rarely working at the level where an MBA student is going to start out,” says Prof Saillant. “So people like me, who’ve been out there, are helpful in letting students see the opportunities that might be put in front of junior level employees.”

However, he believes theory also plays an important role in the teaching of how business should address its environmental and social impacts. “You have to have a destination in mind and the destination for sustainability is very abstract,” he says.

“You need some design constraints and some destination ideas – and that’s pretty theoretical.”

Yet a bigger and constant challenge for business schools is how to integrate sustainability teaching into core courses such as accounting and finance, rather than having the subject taught on the sidelines or in electives.

“The fact that schools are making room for CEOs and that they are talking about this will drive student interest,” says Judith Samuelson, executive director of Aspen Institute’s business and society programme.

“But it doesn’t necessarily mean that we’ve made progress in integrating sustainability into the core.”

She argues that if a professor is teaching sustainability as an adjunct, having a former chief executive on the roster of instructors will do little to advance this. “If you haven’t figured out how it fits in your intellectual framework, it’s not going to change the model,” she says.

In this respect, Ms Samuelson sees the participation of full-time faculty as critical. “It takes real intellectual heft,” she says. “Without that, we’re missing something important.”

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