A driver of future value

Wearing Well: a struggling clothes and home-ware retailer; losing touch with customers; sales nose-diving; share price dropping. Add to that the question marks over its supply chain, low staff retention and ethical concerns about its edible thongs, nipple tassels and other “raunchy Christmas gifts”. The prognosis was not good.

New private equity fund owners introduced a new management team with a dual mission: to draw up a five-year strategy to turn things around and, secondly, to explore potential opportunities around the sustainability agenda.

Nottingham University Business School’s MBA students will be familiar with the scenario. Since 2009, the MBA programme has included a core module that integrates mainstream business disciplines with the emerging field of sustainability.

The reasoning for this is that it is imperative for today’s managers to treat sustainability as a driver of future value, not as an add-on for specialist practitioners, says Nottingham University’s Professor Jeremy Moon. Hence the inclusion of the subject as a core teaching module on the MBA.

The same belief is reflected in how the centre teaches the subject. In an attempt to beat the “silo mentality” that affects both business teaching and company practice, the Nottingham MBA stresses the importance of an interdisciplinary, cross-functional approach. Indeed, the module invites students to develop a five-year vision for the ailing retail company, not a stand-alone plan for its sustainability activities. “We purposely situated the issue within business strategy rather than addressing it separately,” says Moon, who heads up Nottingham’s International Centre for Corporate Social Responsibility, which runs the MBA module.

This is not wishful thinking on the part of sustainability advocates, he insists. Harvard management guru Michael Porter is just one of an emerging raft of scholars to “take seriously” the relationship between long-term, sustainable business practices and the business bottom line.  So, students on the course find sustainability appearing alongside marketing, finance, procurement and other core components of the MBA curriculum.

The centre is not blind to the scepticism with which many mainstream MBA candidates look at sustainability, a topic often perceived as a ‘soft’ management issue. Again, the module’s integrated nature aims to overcome that, says Wendy Chapple, the centre’s deputy director: “When developing the course, our approach was to treat the sustainability agenda as a way of getting ideas and generating new pathways for a company that is failing. We don’t go in saying that you have to be green.”

A final, essential feature of the module is its emphasis on experiential learning. Students work in assigned teams and are instructed to write their own company biographies. Decisions are made through discussion and debate, and tested and refined through role-playing and workshops. “You can talk and talk, but until people actually feel it and connect with it [the sustainability agenda], then it won’t change their decision-making,” argues Chapple.

Not that classroom teaching is avoided. Students receive a number of hours of formal instruction in stakeholder theory and other aspects of sustainability theory. They must also complete a written essay, which accounts for half their mark. To ground such teaching in practical realities, the course administrators also invite in representatives of the business world. Early in the week-long module, the students receive an economic overview from a Bank of England representative and a session on scenario planning from think-tank Forum for the Future.

The final input comes in the form of a presentation by a senior business leader. Most recently, students heard observations from the director of the European Retail Round Table (whose members boast annual sales worth €400bn). Chapple believes it important that the business briefing isn’t provided by someone with ‘sustainability’ in their job title. “They’re not sustainability experts, but mainstream business practitioners who reflect on the emerging importance of sustainability in their field.”

Central to the module is the case scenario. By choosing the retail sector, the module designers picked a cut-throat industry with no margins for woolly thinking. Outside experts on the centre’s advisory panel also give ongoing input to ensure the course content remains contemporary and relevant. The latest version of the module, for example, works within the context of the UK’s summer riots.   

As well as taking account of the general sustainability agenda, the MBA participants are met with what Moon refers to as “interventions” – specific sustainability-related events that demand a fast, sure-footed response. The events in question might range from the sudden discovery of child labour in the supply chain, an environmental disaster or, perish the thought, consumer opposition to the edible thongs.  As the week proceeds, the pressure mounts. The students are not only required to develop a robust, forward-looking strategy. They must defend it too. First comes a simulated press conference, during which students are put through their paces as a panel of practising journalists grill them on the ins and outs of their strategy.  

Next, the students must tackle an interrogation by hard-nosed investors in the shape of a senior executive board meeting. “What we try and do is bring them some unexpected trouble to see if their strategy survives contact with reality – or as much reality as we can inject into it,” says David Pemberton, director of planning and administration at Business in the Community.

Success or failure rests on two basic questions: will their strategies increase sales at Wearing Well? And how does their strategy add value? “It proves to be a very earthy experience,” says Pemberton, who sits on the faux board. “The students generally get a shock to see just how focused a board can be.”

Glenn Robinson, a 45-year-old chartered accountant and former student, admits the “real world situation” did indeed turn out to be gruelling. That said, he credits the overall experience with bringing together a number of disparate strands on the MBA. “I was sceptical that you could marry the fundamentals of the programme with sustainability without short-changing one or the other, but this module managed to do it very well,” says Robinson.

According to Chapple, the feedback from students has been generally positive. Most admit to emerging from the course with an expanded understanding of sustainability and its importance to strategy. A few even confess to “light bulb moments”, she notes.  

As sustainability becomes more recognised as a mainstream management science, expect more MBA programmes to follow Nottingham University Business School’s lead. The main accreditation bodies responsible for rating business schools are already looking for some evidence of the subject on the curriculum. Likewise, the UN’s Global Compact is pushing for a similar outcome under the aegis of the Principles for Responsible Management Education.

The trend is not just top-down. While the number of academic papers on sustainability grows, the proliferation of campus groups such as Net Impact demonstrates how students are becoming increasingly engaged. Should other business schools look to adopt a similar module in the future, they would be well advised to keep the teaching practical, experiential and multidisciplinary.

The case for integrating sustainability into MBA curricula is far from won, says Professor Moon: “If it doesn’t work, it’ll only serve to increase people’s scepticism” about the sustainability agenda.

Further information: m.royston@nottingham.ac.uk