The acceleration of sustainable development initiatives across the global marketplace has stimulated a variety of responses from both global companies and business schools as they race to adapt to increasingly powerful demographic, economic and technological changes.
Yet the direct relationship between companies and business schools remains uneven, both in actions and in results. This is reflected in the often ad hoc nature of their collaboration, the differing approaches to teaching sustainable development, and the burgeoning need for new skill sets among graduates.
The World Environment Center recently convened 40 thought leaders from multinational companies across a variety of sectors, as well as representatives from academia and non-governmental organizations, to examine the critical skills required of business leaders implementing sustainable development.
Following an examination of current teaching approaches, 10 major ideas emerged around which business schools can integrate sustainable development into their teaching methodologies and curricula:
1. Understand Geo-political, Economic and Marketplace Trends Related to Sustainability
The structure of competitive relationships within the global marketplace is changing in response to a range of drivers, including population growth, rapid expansion of mega-cities, growth of the middle class in less-developed nations, and climate change. As a result, business schools must convey the importance of these factors as they relate to a company's continued survival and the sustainability of its products and practices. Students must understand these linkages and recognize their role in reshaping markets and business strategies.
2. Emphasize the Role of Science and Innovation in Advancing Sustainable Business Opportunities
Sustainability has become a catalyst for developing new products and processes that create value for business while solving a societal problem. Students that understand how scientific investment and innovation inform the product development cycle will experience a smoother transition into the private sector.
3. Demonstrate that Sustainable Business Strategies Must Ultimately Yield Profits
From an executive's perspective, sustainability is less about feeling good about your company's operations and more about how to maximize profits. Companies are increasingly modifying their product portfolios to take advantage of market opportunities introduced by sustainable development, such as alternative energy technologies, aircraft design, consulting services, green chemistry, information management services, materials design, and transportation fuels.
4. Examine the Role of Meaningful Partnerships and Opportunities for Efficiencies Along the Entire Value Chain
Sustainability encompasses the interconnectedness of players in the business world and cannot be fully achieved without considering both upstream and downstream activity. Global companies continue to experience rapid transformation in their structures, decision making processes and relationships with other companies through their value chains. Factors such as new business partners, the speed of decision making and sourcing of raw materials have become more prominent factors of success.
5. Stress the Importance of Communications Skills with Customers and Stakeholders
Given the evolution and greater transparency of civil society, combined with more product and service choices available to customers in many markets, the need for clear and effective communication at all levels of a company is essential. The ability to articulate the value that a company creates for its customers and stakeholders can expand its own flexibility in making and marketing its products and gaining access to key markets.
6. Highlight the Role of Public Policy and How It Shapes Both the Structure of Markets and the Demand for Products
While the phenomenon of globalization has given an increasing role and influence to global companies, public policy still shares the stage. In particular, government policy, whether at the national, regional or global level, can create new markets or significantly alter the rules through which existing markets operate.
Legislation governing chemical manufacturing in Europe, tax policies encouraging specific biofuel feedstocks, or recycling mandates are just a few examples of government actions, beneficial or not, that shape market demand for specific products.
7. Instill Competencies in Project Management that Specifically 'Operationalize' Sustainability
Action-based learning has become an important tool for helping students understand the implementation of sustainable development in business. Examples include projects to negotiate a global climate treaty, internships with corporations and NGOs, and consulting projects that closely approximate the reality of the business experience.
The important value-add for business schools, then, is to remain connected to actual sustainability challenges in today's companies, as these examples are not yet institutionalized like some of the classics in the B-School cannon and may require more proactive research on the part of the faculty.
8. Integrate the Teaching of Sustainable Development with Finance and Marketing Courses
The emphasis on sustainable development in business school course work is best accomplished through an approach that is integrated with other elements of the core curriculum. Understanding the role of sustainable business in finance, marketing, and strategy, among others, is essential to acquiring a well-rounded portfolio of core competencies.
9. Foster a Systems-Thinking Approach to Management to Account for the Increasing Complexity of Sustainability
Regulations, changing market demands, scientific breakthroughs, and shifting business practices mean that global companies must manage an array of issues with origins both internal and external to the organization. Business leaders must consider the ramifications of their decisions on not only the company itself but also on society and the natural environment.
10. Develop Multicultural Perspectives and Interpersonal Negotiating Skills
One of the greatest assets of any organization is the authenticity of its values and behavior and how it impacts employees and external stakeholders.
The growing diversity of the global marketplace and the need to make adjustments in business strategy and its execution, modify workforce and management composition, and the imperative need to demonstrate recognition and respect for the cultures in which the organization operates places a premium on skills that emphasize multicultural learning and the ability to utilize indigenous decision making approaches.
The teaching of sustainable development in business schools will be less effective if it becomes another specialized discipline, one that is not fully integrated with other core elements of the curriculum. To be successful in the accelerating global economy, graduates will need to demonstrate an even broader array of skills that can be flexibly adapted to circumstances of rapid change and opportunity. This increasingly dynamic situation will be especially challenging to those business schools and faculty who persist in the habits of stove-pipe specialization, unaware of the changes sweeping across the global economy, and the increasing expectations placed upon businesses to play an even more positive role to improve the quality and dignity of life.
To further develop an understanding of the challenges facing the preparation of future business leaders, the World Environment Center and Net Impact have developed a partnership to evaluate the application of sustainable development in the business strategies of leading global companies. Both organizations will conduct interviews with senior business executives in a number of regions to assess their companies' existing sustainable development strategy and future talent needs.
Through their joint initiative, WEC and Net Impact aim to assist business schools by providing recommendations for how MBA programs can better respond to the needs of a changing global marketplace.