By Andrea Larson, Darden School of Business
It’s 2013, and sustainability has moved into the mainstream as a critical lens through which business opportunities (and risks) can be viewed. Not surprisingly, MBA students interested in sustainability are a very different breed than they were 14 years ago when I first began offering my Darden elective, Sustainability, Innovation and Entrepreneurship.
At that time they were unclear about the definition of sustainability and skeptical whether there was, in fact, a business case. I had to provide the science addressing the “Why should we care?” argument, and answer the “Isn’t this just altruism?” question. Those days are over. Students no longer need to be educated about the importance of the interlocking financial, ecological, human health and social equity issues. They walk into class with experience working in roles requiring an understanding of companies’ social and environmental impacts. Thus their questions have expanded from “Why should we care?” to “We get it!” And further: “How can we design, implement, and integrate sustainability strategies? How can business collaborate effectively with non-governmental organizations (NGOs) and governments to achieve common sustainability aims in ways that grow profitable firms AND enhance the common good?”
How does Darden teach these well-informed, motivated students about sustainability? Through a systemic approach with case studies at the core and complementary, experiential educational opportunities, informed by faculty trained to address these new complexities. Cases are real-time, showcasing entrepreneurs and ventures that are creating new products, processes, technologies, markets, and organizational forms to deliver low-pollution electrical power, outdoor gear made from recycled materials, packaging polymers from plant-based materials, low CO2-emitting cement, and modular green buildings.
In class, we discuss the challenges these creative entrepreneurs face, either in their own startups, or as innovators operating within large corporations. The larger firms can be hard to move, but have resources, and significant global supply chain impacts when they do. Smaller, flexible and fast-moving entrepreneurial firms continually feed exciting new design and market strategies into the mix, such that the study of both small and large companies provides a window onto the exciting market shifts now driving business sustainability worldwide. Topics at the intersection of sustainability, innovation and entrepreneurial initiative provide a rich set of examples for writing, and also content for Darden’s 100-plus cases and technical notes on these subjects.
For the private sector to deliver goods and services in ways that support human and ecological health requires a systems view that cuts across business functional areas and across sectors and industries. This often brings together unlikely bedfellows to solve problems, develop new markets or address needed public policy changes. So at Darden we integrate these cross-cutting topics as part of first year required academic areas, such as Strategy or Marketing. For example, in Strategy, students grapple with a case centered on BP’s evaluation of its long-term renewable energy portfolio. They must use strategy analysis tools to analyze what is best for the company in light of not only its core strengths and future projections, but also public perception after the oil spill.
Darden MBA second year electives also comprise an Innovation for Sustainability multi-disciplinary concentration. It aims to:
- Equip students with the ability to create and execute collaborative sustainability strategies to: increase firm revenues through innovative products and services; lower costs and raise profitability through efficiencies and design; create and enhance brands; better manage supply chains; and mitigate business risk.
- Instill knowledge about the global and systemic impacts on natural systems and human well-being from accelerating trends such as urbanization, industrialization, climate change and population growth, as well as emerging scientific knowledge.
- Inform students of regional and global institutions and policy instruments that influence business operations and strategy.
Courses in this concentration include my core course, Sustainability, Innovation and Entrepreneurship, as well as Supply Chain Management, Leading Strategic Change, Strategic Alliances and Global Economics of Water.
Of course students learn best through experience, which is why one of the best parts of my job is getting to take them to Stockholm for our Sustainability, Innovation and Entrepreneurship course. Students work with Stockholm School of Economics faculty and meet with pioneering Swedish entrepreneurs, business leaders, and government agencies offering new technologies and services that reduce, if not eliminate, waste, ecological system damage, and adverse human health impacts while addressing social inequity concerns. They also work closely with corporate clients on related projects.
While the sustainability challenge – to re-design economic and social models – our world faces is daunting, the creative and pragmatic MBA students seeking to leverage market mechanisms to solve them are impressive. These Millennials defy any simplistic, and certainly all critical, stereotypes: they are idealistic AND practical, and because they know their generation must produce new approaches, they are committed to collaborating across functional, cultural, and geographic boundaries. They have a “both-and” mindset, rather than an “either-or” attitude to achieving positive economic, environmental and social goals in their careers.
Despite their academic demands they get involved in everything from local sustainable food initiatives to global organizations as far away as World Bicycle Relief in Zambia. They have even done projects here at Darden to help us move closer to achieving our vision to be zero waste and carbon neutral by 2020. Their efforts on energy efficiency and waste reduction strategies have helped us reduce our carbon footprint by 20 percent, and waste to landfill by 59 percent relative to our 2007 baseline, even as our programs expand. Darden students manage for academic credit $8M of the School’s endowment, one fund of which is explicitly guided by sustainability investment criteria. And in the School’s iLab, aspiring entrepreneurs launch ventures designed to reduce waste, improve efficiencies and in various ways contribute to improving community economic and social development.
I’m also impressed by the increasing number of scholars integrating sustainability thinking into their research. Here at Darden, Professors Tim Kraft and Gal Raz are looking at supply chain impacts of bisphenol-A (BPA), an endocrine disrupter. Professor Peter Debaere studies the global economics of water. Professor Michael Lenox conducts greentech innovation research and also leads a 15-university consortium housed at Darden, The Alliance for Research on Corporate Sustainability. Professor Ed Freeman, pioneer in the area of stakeholder management, is Academic Director of Darden’s Institute for Business in Society.
In summary, Darden and other top business schools have responded to new realities of demographics and human impacts of conventional industrialization by generating innovative frameworks and tools to guide sustainability strategies in business. Our students emerge from their MBAs with the capacity to positively impact society through business, and we certainly need them!