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Preparing tomorrow’s leadership for climate change

Schools must help tomorrow’s leaders take decisions together, with those from several areas of expertise, while understanding how these decisions will affect different groups in different ways across the world, say the University of Gothenburg’s Thomas Sterner and Åsa Löfgren.

Global changes are so significant that geoscientists speak of Earth entering a new geological era, the ‘Anthropocene’, during which many crucial variables for the planet are controlled by man, and our activities and consumption patterns risk exceeding the planetary boundaries. This leads to a changed climate, acidification of the oceans, loss of biodiversity and many other global environmental problems. These problems are global, long term and uncertain. They are also interconnected and must be analysed together in order to find solutions that provide synergies and avoid those that solve one problem but worsen others.

For example, it is not sustainable to aggravate problems related to a loss of biodiversity, or vital water/nutrient cycles, when you are trying to solve the climate problem through a poorly conceived forest policy.

Biologists, physicists and other natural scientists document and analyse many of the changes mentioned above, and are usually the ones who write about planetary boundaries and the Anthropocene. Social scientists, meanwhile, are experts on how society and the economy work. Both of these areas of expertise are indispensable when analysing social causes and proposing solutions that are effective and politically feasible. Therefore, collaboration between economists, social scientists and natural scientists is urgently needed to discuss solutions.

An interdisciplinary approach

Business Schools have the important task of preparing students to become tomorrow’s leaders in business and other organisations. It is vital that these aspiring leaders are given tools to understand our current and future predicament since it will be decisive for future success and, indeed, survival. One of the prerequisites for a sound future education is an interdisciplinary approach to problems where this is necessary. When it comes to sustainability, we need expertise that understands both natural and social sciences. 

When training tomorrow’s leaders, standards must be high in all areas. We need interdisciplinary understanding of environmental challenges and opportunities, high ethical standards, and a capability to
work with leaders from other countries, cultures and disciplines. 

The School of Business, Economics and Law at the University of Gothenburg (the School) has taken on this challenge in several ways. Most importantly, it is a strategic mission of the School to integrate sustainability into all education: ‘To develop knowledge, educate and foster independent thinking for the advancement of organisations, policy and a sustainable world’.

Over the the past decade, the School has turned its mission into practice by integrating sustainability-related learning outcomes for all undergraduate programmes and strengthening the progression of sustainability concepts between courses. This allows programme coordinators and lecturers to develop curricula in the knowledge that these learning goals must be met.

Sustainability days

Another important activity is the School’s compulsory sustainability days. The concept was introduced in 2013 and was implemented fully in all undergraduate programmes in 2016. It consists of three full days of focus on sustainability from various perspectives. The overall aim is to complement the sustainability content of courses by raising awareness and providing knowledge around three themes: challenges, responsibility, and solutions. During this time, students from different programmes meet and learn to work with, and respect, those from a variety of backgrounds.

At an international level, and in collaboration with Gothenburg’s Chalmers University of Technology, there is the School’s Environment for Development unit. With support from the Swedish International Development Cooperation Agency, the Environment for Development has trained PhDs from emerging markets in environmental economics for decades and helped build centres in more than 12 countries in the
Global South. 

In the future, the unit’s plan is to co-teach master’s courses with students in several countries simultaneously. In a pilot course run at Chalmers this year, students in Asia, Africa and the US solved problems related to fairness in climate negotiations simultaneously. In a second step, students held discussions with real climate negotiators to develop their negotiating and leadership skills. A capability to work with leaders from other countries,
and understand the positions of other groups or countries, is key to addressing global environmental problems such as
climate change. 

More specifically, while it is important to find effective solutions, it is also important to educate students about the income distributional effects of policy measures and their perceived fairness. These effects are vital determinants of political feasibility and aspects that must be considered carefully when policy instruments are selected and designed. The task is complex since policies need not only be feasible in Europe or the US, but globally. 

There are ways that global environmental problems can be addressed. But the solution relies on there being leaders who are responsible, knowledgeable and understand the importance of, and are open to, collaboration with those who possess skills from other disciplines. Business Schools have a responsibility and an important role to play in the education of such leaders.

Thomas Sterner is Professor of Environmental Economics and Åsa Löfgren is an Associate Professor in the Department of Economics, part of the School of Business, Economics and Law at the University of Gothenburg.

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Business Schools for business and society

Business Schools must understand how they can contribute to the wellbeing of society, adopting an active stance, writes Loïck Roche, Director and Dean at Grenoble École de Management

On 11 December 2017, the then French Minister of Environmental Transitions and Solidarity, Nicolas Hulot, announced in a speech, at the Medef Employer Federation in Paris: ‘We [the French Government] are going to help companies evolve in terms of their social objectives, which can no longer be limited to earning profits without regard for working women and men, and without consideration for environmental consequences.’ 

His proposed French Pacte Law (action plan for business growth and transformation) was put forward, with the goal of helping to ‘reintegrate morality in capitalism’. 

To ensure financial objectives better support the greater good, the law will re-write two 200-year-old articles in the French Civil Code (articles 1832 and 1833, see box overleaf). 

The articles redefine a company’s role as simply  creating profit for shareholders. The proposed modifications will integrate social and environmental considerations. At the time of AMBITION going to press, the law was to be voted on in autumn 2018 and its primary actions could come into effect as early as 2019.

But, taking this news out of the context of the French arena, and into the wider global economy, could this development suggest that the era of the Chicago School and one of its most noted economists Milton Friedman – who coined the phrase ‘money matters’ – is over? 

A reason for existence

The step change outlined above looks set to take business thought back to 19th and 20th century business magnate Henry Ford’s fundamental advice: ‘Business must be run at a profit, else it will die. But when anyone tries to run a business solely for profit, then also the business must die, for it no longer has a reason for existence.’

This gives us, as Business School leaders, the opportunity to position social responsibility as the foundation for business. 

The perspective that a company can no longer exist within a silo, but instead must be part of the whole, builds on the stakeholder theory developed by R Edward Freeman, an American philosopher and Professor at the University of Virginia’s Darden School of Business.

His theory suggests companies should not only consider their own interests but also the interests of all concerned parties (employees, customers, stakeholders, leaders, and so on). This helps to improve the wellbeing of society. Corporate social responsibility is an example that was born from the concrete application of this approach.

To implement these changes, and to ensure companies accept that they must go beyond their mission (to manufacture products or deliver services) and participate in a larger responsibility, Business Schools have a primary role to play as they train future managers and leaders and offer continuing education for working professionals who are ready to question their practices.

Beyond the ‘usual goals’ of the Business School

The first step in taking on this new role, is to go beyond a Business School’s usual goals (for example ‘training the leaders of tomorrow’ or ‘ranking in the top 10, 20 or 30’) in order to ask: ‘why train the leaders of tomorrow?’, ‘what do the leaders of tomorrow need to be able to do?’, and ‘why attempt to be in the top 10, 20 or 30 Business Schools?’

The second step is a result of this exploration: in addition to working through these questions with students, professionals and employers, Business Schools have to consider the bigger picture. 

Much like what is expected of companies, Business Schools have to understand how they can contribute to the wellbeing of society. As a result, Schools are preparing and implementing a process of change to become ‘schools for business for society’. 

It is a positive sign to see that what was once the perspective of a few has become a generally shared vision. While not all Business Schools are currently working in this way, they are all headed in the same direction and that’s a great result.

It might not seem like much, but there is an important difference between saying ‘we want to train the leaders of tomorrow,’ and ‘we want to train the leaders of tomorrow to do something special’. 

It’s vital to understand that this concept of doing ‘first, for society’ is, in fact, quite complicated to implement because it’s a reversal of traditional values. For Business Schools,  it means that if we only carry out our mission to offer training and support research we will miss our fundamental objective. And, if we miss this fundamental objective, we will still be doing something positive – but the current stakes are so much higher.

In addition to working with students and companies, Business Schools have to offer a vision and solutions for major global challenges (issues surrounding end of life, climate change, energy transition, immigration crises, terrorism, epidemics, corruption, child exploitation, human rights, women’s rights, cybersecurity and artificial intelligence).

The challenge for Business Schools

The mission is for Business Schools, and higher education in general, to continue working in their particular fields of expertise, while contributing to solving the world’s larger challenges. They have to go beyond their comfort zone; in other words, move beyond their limited focus on business, in order to understand and explore the complexities of the world. 

It’s a change that will enable them to provide support in overcoming the major hurdles faced by society.

When Business Schools take the step to work on major societal problems, they open the door to risks and are forced to take sides. By this, I mean that Business Schools do not currently think (and this is a simple fact, not provocation). Their researchers and professors think, but the Schools themselves do not. They ‘describe’ and often they do so after the fact. This was illustrated by the 2008 financial crisis – no Business School anywhere in the world predicted or anticipated this crisis. In other words: Schools do not think, they do not take sides, they do not act.

For example, what does Harvard Business School think about problems impacting on society? Does Harvard voice an opinion, not on immigration, but on what we should do in concrete terms about immigration and immigrants? Going further, if a School’s opinion supports immigrants, does the School work actively to welcome them?

Another example that might offer better perspective is the case of US President Donald Trump. The researchers and professors at Harvard voiced many negative opinions before and after the election of Trump. But in concrete terms, what has Harvard done about it? Nothing. 

If the School had an editorial policy, if it truly wanted to change the world, then Harvard wouldn’t simply denounce policy or take sides. The School would act in concrete terms. How? For example, by setting up locations in the US where people voted overwhelmingly for Trump. 

That would be going beyond its comfort zone in Cambridge, Massachussets, and entering the playground where things are taking place. To understand societal changes, events and facts, it’s important for Business Schools to be ‘external’ and to maintain a certain impartiality. But if you want to change things – and to have an impact – you have to be where the action is. While Business Schools have been limited to describing and explaining, they now also have to (and I do mean ‘also’, not  ‘instead’), state their aims, choose sides, communicate and convince. 

They have to act, which is at the heart of being engaged and inciting change within the world. In this way, Schools can help federate the business world and public institutions in order to work together on important human values and the goal of companies: to perform and create profit for all concerned parties, thereby improving our shared social fabric and contributing to the common good.

Loïck Roche is Director and Dean at Grenoble École de Management (Grenoble Business School). Coming from a corporate background, he worked for 10 years in France and internationally as a consultant in the field of human resources.

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Applying original thinking to business

Business Schools must encourage independent thinking and bravery in their students to help prevent future financial crises, says Fiona Devine OBE, Head of Alliance Manchester Business School. Interview by Jack Villanueva and David Woods-Hale

What were the key points of your presentation at AMBA’s 2018 Global Conference for Deans and Directors? 

I wanted us all to reflect on the global financial crisis of 2008 because the causes and consequences of that crisis are still being felt today and will be for some time. 

I wanted us to think about its impact on the world with a particular focus on leadership and management education. We have to produce the leaders of tomorrow who still take issues of corporate governance very seriously. There are many examples in the business world and in all aspects of life in which we have to think about fraud, accountability, corporate governance and how we address those issues. 

In light of that, how do you think Business Schools should be preparing MBAs to be leaders of tomorrow?  

Business Schools should be producing well-rounded people. By that, I mean people who understand business in the wider context – the social, economic and political environments in which businesses are operating. 

They need to understand this external environment as well as the environments of the organisations in which they’re working.
I think business leaders of the future need to understand how to manage change, how to lead change, and how to deal with risk and uncertainty. 

How can we be sure that the skills that are currently being taught are the right tools to safeguard against another financial crisis?

We’ll only know that when there isn’t another one. 

I don’t suppose we’ll never have crises in the future. But there should be people who will have the independence of mind to step up and say when there is uncertainty about issues. It doesn’t have to be a big crisis for people to draw attention to something. It’s about having the independence of mind and the courage and bravery to say something different – and not be part of group think. It’s about reflecting on and challenging things that come along if they don’t feel right. 

Do you think MBAs are being taught the necessary skills to succeed? 

I would hope so, as a Business School Dean. They will be taught what’s needed if the curriculum is up to date. An old curriculum doesn’t serve anybody, so we want an academic community that is abreast of the latest developments in the world of business and how it’s changing; and always bringing theory and practice together. 

Our strapline in the Business School in Manchester is ‘original thinking applied’ and it is really about defining theory and practice. Theory is often speculative and not grounded; it’s about connecting this to practice and this is very important and I know that many Business School Deans aspire to achieve it. 

How important is the continuation of learning after achieving an MBA? 

It’s hugely important. We all talk about it and we know that in a world of change, risk and uncertainty, it’s important to have the space to step out of your organisation, find a platform to talk to people about issues and challenges and get advice. 

Executive education and continuing professional development provide that space for you to do that. It’s easy when you’re in an organisation to think you’re the only person facing these problems and you’re the one who has to come up with novel solutions, but often when you join an executive education programme you’ll find yourself confronting similar dilemmas and challenges so it’s good to have those conversations and join that collective discussions about the best ways forward. 

In what ways have Business Schools adapted sustainable leadership into their programmes? 

Sustainable leadership is to do with resources and how you use them efficiently and effectively for the long term. One of our preoccupations is with environmental sustainability – but there are other forms – and in Manchester we have scholars working in this area. 

For example, there are lots of discussions at the moment about the need to move to a low-carbon future, but how do organisations get there? It’s a huge transition, especially if you’re a dominant player in a particular market. How do we get there? This has to be a core part of the curriculum [in Business Schools] whether it’s in the MBA or electives on specialist masters or undergraduate programmes. There’s a high demand for these programmes from students. 

What are some of the innovative teaching methods being used to prepare the leaders of tomorrow? 

Teaching has changed considerably over the past 10-20 years, most notably because of new technology. The days when you would go into a lecture for an hour of being talked at, as a passive audience member, are long gone. 

Technology has allowed us to do amazing things in the classroom and that learning engages students a lot more. It’s not about passive learning, even in large lectures. Material can be presented in innovative ways, using apps and gamification, to help people learn and think in active ways. 

Is the need for innovation a major challenge that Business Schools face? 

Like any other organisation, Business Schools have to think about change, evolution and relevance. Business Schools have to be useful to the business world, serving local as well as international communities. 

The biggest challenge is the politics of today – will the world remain as international as it has been for the past 20 years? Will we embrace people of all nationalities moving around the world and studying at Business Schools? Will people still feel comfortable to do this as the politics of the world changes? 

Which is the bigger issue for Business Schools: the volatile economic environment or barriers to student mobility? 

International mobility is important, not only for the Business School world but education in general. The academic world has enjoyed a surge of interest from students coming to Business Schools from all around the world and it would be shame if we lost that confidence people have to travel. 

We’ve got to think about keeping students up to date with current debates about politics, looking at international relations in terms of trade, how countries collaborate with each other, and all those sorts of issues. These are important for understanding businesses and what happens in the business world.

What innovations have you seen in Business Schools that have the potential to change the way businesses do things? 

There are lots of things out there and even as a Dean of a Business School, you hardly know the breadth of innovations happening in your own School. 

I’ve been interested in knowledge-transfer partnerships, in which Schools work with organisations. I have a number of colleagues working with legal companies at the moment, around legal tech. They’re exploring changes happening with legal technologies, how that’s disrupting the legal world and also how data is disrupting this sector, in the same way as fintech has disrupted the finance sector. 

Academics are bringing their expertise to the areas of solving business problems and helping companies through this. It’s important to be useful. 

How can a Business add value to a corporate with which it’s working? 

There are many ways we can work with corporates. Business Schools act as a platform to bring people together to discuss important topics. 

Manchester Alliance Business School recently held a talk on the industrial strategy in the UK, bringing people together to talk about this. What was gratifying about this event was that people were sharing business cards with each other. We can be a place where big ideas are discussed and we can bring solutions to problems as well.

Fiona Devine OBE is Head of Alliance Manchester Business School and Professor of Sociology at the University of Manchester. 

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Creating responsible citizens to lead organisations to sustainable success

Preparing MBAs to lead sustainable economic growth is the core task of Business Schools, argues Professor Percy Marquina, Director General, CENTRUM PUCP, the Graduate Business School of the Pontificia Universidad Católica del Perú. Interview by David Woods-Hale

What do you think differentiates the MBA at CENTRUM PUCP?

When students search for a Business School at which to study their MBA, they look for prestige, a high-quality academic programme and networks. At CENTRUM PUCP, we possess and offer these elements to students. But we offer more than that.

We prepare our students for the future by creating responsible and socially committed leaders, who think, decide, and act based on principles. We believe in an holistic form of education that enables students to assimilate the knowledge they require to lead companies based on the experiences they have shared in our classrooms and in their lives. 

Our programme also provides students with the human skills demanded by companies, such as time management, task prioritisation, complex problem solving, the ability to train others and to build sustainable networks.

With reference to Latin America in particular, why is it still vital to develop world-class business education? 

Globalisation and interconnectedness are growing at an exponential rate; every day it becomes evermore important to understand that our actions have far-reaching impacts. As technology advances, it will become easier to reach new audiences, but it will be more important for professionals to acknowledge that competition is no longer local, but international as well.

What innovative teaching methods have you come across that are used to create the leaders of tomorrow?

Emerging, disruptive technologies such as artificial intelligence, virtual reality and machine learning are changing teaching methods in Business Schools and can help us to adapt teaching to each student’s learning needs. For example, at CENTRUM PUCP, we use IBM Watson Personality Insights analytics to understand and predict the personality characteristics of our students. Using these results, we take a more humanistic approach to our MBA programme.

How important is sustainability, and in what ways have Schools adapted this into their programmes? What does sustainable leadership looks like?

Sustainability is crucial nowadays and we try to instil this in our students. By sustainability, we mean that professionals should meet society’s needs, preserve humanity, increase opportunities for others and make their organisations’ marketing, finance and human resources departments sustainable. We guide students to take decisions that put society’s needs ahead of profits. 

What are the biggest challenges facing global Business Schools today?

The biggest challenge for Business Schools is helping to create responsible citizens. We must be able to develop competent professionals while guiding students through a process of social sensibility. And we must also be competitive. 

When facing global competition, we find that every School that has been able to obtain good results and trained their professional workforce is making a name for itself in the areas in which it excels. 

Gone are the days when professors used to teach traditional subjects in a static way; the time is ripe for a new model of professor who is able to inspire students’, teaching and learning from them in a constantly evolving environment that demands greater skills and vision in order to develop social innovators. 

At CENTRUM PUCP we have developed the NeuroManagement-Lab initiative, with the objective of identifying students’ main leadership competences and areas of development. Through this programme, we enhance the user experience, helping to personalise education, shaping skills and helping students to discover their strengths and work on their weaknesses.

How do you instil the thirst for global mobility and an international mindset in your students? 

Whenever I step into a classroom or I encounter a student, the message I always try to communicate is a simple one: do what makes you happy and you will lead the way. Having visited so many places, I have confirmed this theory: students overachieve when they are able to work and pursue their goals in something that makes them happy. 

If you are able to identify and understand your passions, your thirst and commitment towards your goals will increase every day and your competition will become global. 

You will innovate, search and look for solutions to questions that have never been asked before because your thirst for knowledge will push you to think more broadly. During their MBA, our students are exposed to global experiences such as international faculty, peers, global case studies, international study stages, business programmes abroad and so on.

You urge your students not to put limits on their goals – can you share some insight into how MBAs can take theory into practice? 

Through many case studies, we teach students the ways firms and managers have faced and solved unexpected problems. I advise them to stick to their principles and the message of their organisation. 

If your organisation has a distinctive characteristic or stands for something, wear it as your own personal badge of honour. 

One story that people can relate to is Apple’s. Steve Jobs, former Co-Founder and CEO of Apple, believed in innovation and in the superior quality and practicality of products. He used to say: ‘Apple products should be easy to understand. Everyone should know how to use them’.  

His team believed this, too – at a time when this was not expected – and created products accordingly. Acting in line with the beliefs of your organisation can help it differentiate itself in a saturated or extremely competitive market. 

At CENTRUM PUCP we promote entrepreneurship as a way of creating innovative business models. Several start-ups are created every year by our students, and have a great impact on society. For example, three graduates from CENTRUM PUCP and three from the faculty of engineering PUCP were among the 15 finalists in the Cisoc Global Problem Solver Challenge. The talented Peruvians developed Pukio, an intelligent mechatronic system that generates clean water through the condensation of water vapour in the air. Collaboration is vital in an uncertain climate. 

How does your Business School link and work with other Schools, employers and alumni? 

Relationships are about co-operation, and co-operation is about progress. We challenge ourselves to establish partnerships with other Business Schools to provide the best each School can offer in a combined MBA or specialised master’s programme. 

We promote co-operation between our departments to allow the ideas and innovation to flow through the veins of our School. We create opportunities for alumni to collaborate with us so that we benefit from the skills and experiences of the professionals we create in our classrooms. Co-operation has grown in importance among Business Schools and it is yielding better results.

What would your advice be to other Business School leaders operating in such a volatile and uncertain world?

Education is not about outcomes. It is about the impact. At CENTRUM PUCP, we have a mission: educate to serve. We serve academia, the business world and wider society. But we are also here to educate people about sustainable development. 

We want people to learn to thrive in a competitive world. Business Schools should also follow suit: educating people to allow them to see the bigger picture and teaching professionals how to lead the departments within their organisations.

Do you feel optimistic about the future of business, Business Schools, and the economy?

I believe we are all more aware of the global challenges ahead than we were a couple years ago. We are in the process of acknowledging the impacts of our actions and the dangers of not doing so over the long term. 

Business Schools have taken advantage of this. We teach students to think about impacts on society and how our actions can be turned into positive outcomes for the greater good. 

Sustainability is both an individual responsibility and about teamwork: we all have to engage in the right actions to produce a positive impact. I believe Business Schools are preparing people to provide sustainable and egalitarian economic growth.

Professor Percy Marquina is Director General at CENTRUM PUCP, the Graduate Business School of the Pontificia Universidad Católica del Perú. He was previously General Manager of Rhone Poulenc and General Manager, Commercial Manager and Marketing Manager of companies related to the Richard O’ Custer group. Marquina holds PhDs from the Maastricht School of Management and the Pontificia Universidad Católica del Perú in business administration and strategic business administration, respectively.