Business Schools are often maligned as being out of touch with what is going on in the world of business and society beyond the comfortable confines of academia. As with all such criticism, when enough mud is slung, some of it sticks, and it sticks all the more firmly if there is a grain of truth to it. Much business school research is esoteric, and not embarked on with any benefit in mind for those beyond academe’s walls. There is a well-observed focus on what management professor, Martin Parker, calls ‘market managerial capitalism’ to the exclusion of just about all other models. And the accusation that several decades of MBAs chasing profit at all costs led to the financial crash of 2008, while not the whole story, is certainly part of it.

The world is changing, and so are business schools... emphasis today on innovation and entrepreneurialism

But the world is changing, and so are business schools. There is much more of an emphasis today on innovation and entrepreneurialism than ever before, and business schools are seeing more of their alumni head to start-ups rather than exclusively to banks and top consultancies. The best schools are shining a light on current issues like digital transformation, machine-learning implications, and also the wider impact of business on society.

The UBC Sauder School of Business leads very strongly on the theme of Responsible Leadership and invests significantly in sustainable development which informs many of the programs it provides. IEDP Developing Leaders had the opportunity recently to dig into these areas with two of their leading faculty, Professor James Tansey, the director of the Center of Sustainable Innovation and Impact Investing at Sauder, and Dr Justin Bull, who leads several executive programs there.

From an environmental standpoint, it is easy to become either despondent or quickly angered by what big business is perceived to be doing to planet Earth. This approach serves no one well, it alienates business decision-makers from the activists, and it obscures the important work that businesses are doing to improve the environment. Prof Tansey clearly understands these partisan politics well and is nevertheless relentlessly positive about the progress being made and momentum being created in the business world, without belittling or underestimating the challenges we face.

Business is a hugely influential force that now has this opportunity to be the conduit for change

“I think in the last two decades, we’ve entered a period where there’s been a profound suspicion of the role of business in society. When we introduce MBAs to topics like climate change, sustainability, and corporate performance, we often find that we’ve reached a level of skepticism about the role of business in society that’s become counterproductive and unhealthy. And so a lot of what we focus on within the business school is, on the one hand, giving students the tools to understand the driving forces behind environmental degradation; the challenges to food systems; behind the exploitation of workers in emerging markets. And understand that often the causes in those cases aren’t simply the sort of villainous business person exploiting weaker countries, or weaker jurisdictions, but is often a function of public policy, is often a function of limits to what the law can do. And that capitalism is no less the cause of the problem than several other causes and several other driving forces….I think we’re emerging out of an era where there’s that pure skepticism of businesses, to recognizing that capital markets have an enormous role to play in directing investment, “impact investment”, as we now call it, to new markets. Challenging the way that we think about philanthropy, as being more than just gifts and donations in charity, but investing in self-sourced income for target groups”.

This approach is a lot more engaging and energizing for current and future executives, and is one that Sauder sees leveraging their influence within the business community. There is already a determination amongst businesses to seek and identify greater purpose in what they do, partly to ensure they attract the best talent who are increasingly looking for value-driven businesses to work with, not just high-paying ones. Tansey reflects that “the workforce that’s emerging now from business schools has different expectations …. when you talk to NGOs, they’re very clearly oriented around values, and around mission, and I think sometimes when you strip organizations back to what their core values are and set aside whether they’re for-profit or non-profit, you’ll find most people are motivated to work, to achieve a set of values. And so often there’s common ground, even in environmental conflicts, when you look at, NGOs struggling to protect forests, and forestry companies. When you sit those people down, and say, ‘What are the values you’re trying to protect here?’, and ‘What is it you’re trying to achieve?’, there’s a lot more common ground than you see in the public domain, in the political domain, where you’re forced into these sort of binary oppositions. And so, I think particularly for this generation, for millennials, they have a strong sense of wanting to work for a purpose. They don’t have that same kind of scarcity mentality that the baby boomers have”.

Sauder is keen to weave this sustainable mindset into all its students and executive program participants, not in a ‘preachy’ way, but in an enlightening and educational one. “On the curriculum side, we offer a range of different courses to be able to understand the underlying causes behind problems and give them the models for managing those problems as companies. So, we look at a tool like ‘life-cycle assessment’, for instance, which looks at the full impact from when a resource is removed from the ground to when it’s disposed of at the end of its life, of its lifetime. We look at that kind of tools, not to teach students as managers how to do those, but how to integrate those into a business’s strategy”. Beyond this, the school also runs an incubator for around eight new ventures each year, and the entrepreneurs get assistance from students and executive participants to help create marketing plans and move the product to market more quickly. Tansey is excited about this “It’s a great alignment, in many ways, because you have early-stage ventures, which are built around the passion of a small team of entrepreneurs, who understand a new technology, and new product well, but they don’t necessarily have the skills to translate that into a fully functioning company; whereas our students have fantastic, underlying technical skills. They’re the best kids in the province, in terms of their grades, but they don’t necessarily have the experience to know how to create a new service or product. And so the Venturing program combined with the Innovation Hub allows them to apply what they’re learning in the class, to real businesses, and I think that adds a lot of richness to their experience.”

Justin Bull sees that shifting these mindsets is central to achieving the change needed in society, “the shift in the executive mindset around sustainability has been one of risk management, or compliance, of being responsible, to one where we’re recognizing that the political and social environment is sending executives a lot of signals that being sustainable is something that will be required and will be a tremendous source of innovation moving forward. There are a lot of business models right now that are under stress. They’re dependent on the exploitation of labor, they’re dependent on the exploitation of natural resources, they’re dependent on levels of carbon emissions, or resource consumption that science is telling us is simply not sustainable. So we’re working rigorously with executives, to say ‘What are the business models that are going to be able to create value and innovate over the long term?’. So we’re looking at sustainability now as this source of innovation”.

The Sauder campus itself is a unique source of innovation. It operates its utilities, with its transit infrastructure, planning, and control processes. With up to 60,000 people on campus on a busy day, it’s the size of a small town. And the university has been able to use that control over the infrastructure to use the campus as a living laboratory for new technologies. This ranges from low-energy lighting systems to a $30 million bioenergy system - a laboratory on the campus for doing bioenergy research, that also provides 20% of the campus’ heat load. “We’ve just finished, for now, at least, the world’s tallest wood building, which is a 57-meter-high, 18 story, wood construction. We pushed the frontier on that….. there are some real advantages of using wood in construction that you don’t see in other places” says Tansey. “The wood construction is a product that’s been developed and widely used in Europe, but this is the tallest application to a ‘tall wood building’, …. anytime we build a project like that, we wrap faculty and research student projects around it. The building’s fully instrumented, so we can look at issues like sound transmission, moisture penetration, and building stability, as well. We use these capital projects as an excuse to run research projects, as well.”

Part of the shift in mindset that Sauder is fostering amongst the executives and managers that come to do executive programs is that the new sustainable economy is likely to be far less binary, winner-takes-all than the classic 20th-century commercial models often were. “I think one of the things that’s going to happen as energy systems transform is that we shift away from dominance of single energy types within jurisdictions, to much more diversity in energy use and supply. So there won’t be a single type of car that wins in the end, there’ll be several different ways of providing mobility, there may be a role for hydrogen vehicles, there may be a role for pure electric vehicles, there’ll be a role for hybrid vehicles, whereas now what dominates is just the internal combustion engine. … and that means companies can experiment and take risks with a range of technologies because it’s less likely we’ll have a single winner in the future if we’re going to meet all the needs of the system. We have a cool project that’s just starting at the moment, which was, you know, the shorthand for it is it’s the Solar Parkade Project. And we’re putting solar panels on the roof of car parks, the top floors of car parks generally aren’t used very well, so, but we’re also integrating electric vehicle infrastructure into the parkades (multi-story car parks), and then hydrogen fuelling infrastructure, which is driven by electricity, passed through water, to generate hydrogen. And what we end up with is an integrated transport and energy system because the electric cars of the future are not just going to absorb electricity, take electricity off the grid, they’re going to be able to put electricity back into the grid, and so the experiment, it’s a $12 million experiment on the campus”.

The Sauder programs look far beyond the near horizons of the university campus, however. “One of the most inspiring things that we can share with our students is that if you look at the leading companies of today,” says Justin Bull “ for example, at the technology sector, you look at Facebook, Amazon, Apple, Google, Netflix, these companies that have been creating all of the profit in the last 10 years, that have been driving economic growth on a global level, their environmental values are almost akin to a far-left environmental activist. They think sustainability is one of the most important things to themselves, to their shareholders, to their employees, to their board. They take climate change exceedingly seriously. They’re looking to rapidly de-carbonize what it is they’re doing. And so I think what’s crucial is that other sectors, right, outside of technology, who perhaps don’t benefit from those huge profit margins, and all that growth, need to recognize that the terms of the game are shifting and that the conversation around sustainability is not one simply now of responsibility, but one of resilience. Moving beyond, and finding new areas of value creation. So the question I always pose to an executive is “Do you think you’re extracting value from a system, or do you think you’re creating value in a system?” That might be a social system, an ecological system, or an economic system, but you have to ask yourselves fundamentally different questions. Most folks have not taken the time to dwell on that; they could certainly argue, ‘I’m a value creator for my shareholders’, but they’re not necessarily creating value for society at large. So there’s this challenge of a more antiquated, I would say Milton Friedman-esque mindset, of maximizing shareholder returns in a socially responsible way, to recognize that business over the last 20 years has become such a deeply globalized, hugely influential force that it now has this opportunity to be this conduit for change, for leveraging new mindsets, of exponential change around sustainability, and bring in some of these solutions that we know are required by, for us to sustain the quality of life and wellbeing of this planet.” The passion and energy to foster change in a sustainable and impactful way is gaining momentum at Sauder.