MBAs of the Future

In the early 1990s, the University of Washington (UW) business school became one of the first programs in the country to develop an environmental management concentration within the MBA program. Poised to become a leader in the field of sustainable business education, UW was recognized for its cutting-edge program in the 1996 “Beyond Grey Pinstripes” report, a national ranking of business schools that incorporate social and environmental responsibility into the curriculum.

Accolades notwithstanding, the UW business school — acting under the directive of a new dean — killed the environmental management program in 1997.

“The school chose to focus strategically on other areas,” said Rick Bunch, a 1995 graduate of the now-defunct UW program and executive director of the Bainbridge Graduate Institute (BGI), the only MBA program in the Northwest that integrates sustainability into all of its courses. “The program just evaporated.”

Eight years later, a growing number of sustainable MBA programs are sprouting across the Northwest. Offerings range from flashy immersion programs like BGI’s, to the University of Oregon’s Lundquist Business College, which plans to unveil a concentration in sustainable supply chain management by 2007. And yet, when it comes to developing comprehensive corporate social responsibility MBA programs, the Northwest has yet to live up to its reputation as an environmental innovator. Only two of the region’s business schools (Portland State University and the University of Oregon’s Lundquist College of Business) made it onto the 2003 Grey Pinstripes Report — a ranking both schools earned automatically by responding to the survey. And despite rising student demand, most of the region’s business schools still limit “triple-bottom-line” (economic, environmental and social) course offerings to business ethics classes and a few electives, with the occasional option for students to design their own social or environmental specialization.

“I have closely tracked the progress of sustainability in MBA programs since I was an Oregon MBA student myself in 1994-96,” said Dan Poston, executive director of the UW MBA program. “Ten years later, even the MBA programs that tout themselves as leaders in the field have actually made only modest commitments to this field in terms of faculty hiring and course offerings.” Citing a recent article in The Economist, which mocked the credibility of corporate social responsibility initiatives, Poston said the field “is still not viewed as a safe bet.”

Poston and other business education faculty cited additional roadblocks that deter business schools from pursuing a corporate social responsibility curriculum: a tradition of ranking MBA programs based on job placement and the amount of money graduates earn, and academic journals that frown on triple-bottom-line article topics. And although the demand for such degrees is increasing in the marketplace, the consensus is that both large and small corporations need to significantly bolster recruiting efforts. “Business schools won’t invest heavily in corporate responsibility until business starts loudly calling for people with knowledge and skills in this area,” said Poston.

But not all is gloom and doom. On the contrary, many faculty and administrators said they believe sustainable MBA programs represent the wave of the future — it just has yet to hit with full force. “Its day is still three to five or more years away,” said Poston.

Charting the change

In April, the UW business school is sponsoring a seven-university regional symposium on how to bring sustainability into the business curriculum. And last fall, Hewlett-Packard (Nasdaq: HPQ), Alcoa (NYSE: AA), Ford Motor Co. (NYSE: F) and Johnson & Johnson (NYSE: JNJ) worked with the World Resources Institute on a study of internal hiring processes and global citizenship. The goal was to link corporate sustainability and responsibility with human resource departments and business educators.

“Interest in corporate social responsibility is on the rise across all aspects of business today,” said Ken Larson, Hewlett-Packard’s director of corporate social responsibility. “As competition among graduates increases, so will our consideration of specialty degrees.” Graduates of sustainable business programs offer their own even-keeled assessment of the job market.

“There aren’t that many director of sustainability jobs out there,” acknowledged Chad Haddock, a business analyst at Symantec Corp., who will graduate this spring from Portland State University’s Masters in International Management program with a sustainability specialization. “Realistically, you need to be the agent for change and take that as your champion cause,” he said.

But it’s an exciting time to be a pioneer, Haddock hastened to add. “You’re charting the course,” he said.

Bucolic Bainbridge

Launched after the collapse of the UW environmental management program, BGI is possibly the gold standard for regional green MBA programs.

Located on bucolic Bainbridge Island — with occasional retreats to the founders’ 140 acre, off-the-grid property in Canada — and boasting big-name faculty such as Amory Lovins and Elisabet Sahtouris, the school caters to working executives with a passion for changing the way business does business. Economics classes focus on eco-economics, instructors teach finance and accounting from a triple-bottom-line perspective, and case studies of companies such as Patagonia illuminate traditional strategy in the context of social responsibility.

“Most programs focus on whether or not a company should do it and, if so, why,” said BGI program director Jill Bamburg. “We’ve already answered this; we focus on the how.”

Erin Gately, a 2004 BGI graduate and environmental product steward at Hewlett Packard, said in addition to the material, one of the most outstanding aspects of the BGI program was the community. “It was unlike anything I have ever experienced,” she said.

The institute also helped her build the business case for sustainability at HP, she said — and that was her goal when she entered the program. “Now when I want [staff] to do more on environmental issues, I’m more likely to say, ‘What’s the return on investment?’”

One of BGI’s primary goals is to influence the course of business education around the country. To that end, the institute has an “open source” policy toward its curriculum — any institution in the country is free to use or adapt BGI’s course materials.

Across the Puget Sound, UW adjunct faculty member Martin Westerman is doing just that. The author of two green business handbooks, Westerman is incorporating BGI materials into a new MBA elective launching this spring: “Business FutureWorks — Making money in an environment-based economy.” A core business ethics class, which was recently expanded to include corporate governance and social responsibility issues, and a new international business elective on environmental technologies round out the program’s sustainable business course offerings.

UW MBA students also have the option of enrolling in a graduate certificate program in environmental management or tapping other disciplines to create their own specialty. According to Poston, MBAs who are interested in pursuing environmental management, sustainable enterprise or corporate social responsibility do so by blending courses in finance or operations management with governmental policy, international development or the UW’s interdisciplinary Program on the Environment.

‘Publish or perish’

Somewhere in between BGI’s immersion program and the UW’s aggregate elective system is the University of Oregon (UO) Lundquist Business college, which is capitalizing on a reputable history of sustainable business activity — including sponsorship of an annual sustainable business symposium for eight years — to push for the future concentration in sustainable supply chain management.

“To flourish, MBA programs have to develop programs in niche areas with a national reputation that are difficult for others to replicate,” said UO management professor Mike Russo, who is helping finalize the proposal for the new concentration.

Housed in a brand new LEED (Leadership in Energy and Environmental Design) silver-rated facility, the college hopes to leverage the “Oregon brand” to highlight the importance of technical, environmental and business expertise, he said.

“How many people can master an industrial balance sheet, Natural Step and thermodynamics on top of that?” asked Russo. “Graduates need to be fluent in many disciplines.”

Chair of the 500-member Organizations and the Natural Environment (ONE) interest group of the Academy of Management, Russo has emerged as an internationally recognized expert on environmental management. As proof the field has entered the mainstream, Russo pointed to several corporate environmental performancethemed articles he’s published in top journals: the Academy of Management Journal and Strategic Management Journal. “For a field to move forward, you have to publish in the top journals, not the specialty journals,” Russo said.

But when it comes to the “publish or perish” paradigm in academia, Russo also considers himself one of the lucky ones.

The consensus among business school experts, including the authors of the 2003 “Beyond Grey Pinstripes” report, is that academic journals — the prestigious ones in particular — still resist articles pertaining to triple-bottom-line issues.

“Management journals are more open,” said Mark Pagell, director of Oregon State University’s sustainable business initiative, an undergraduate program widely viewed as the most comprehensive in the country. “But in finance, accounting and marketing that acceptability declines, and declines fast, to the point that finance people don’t believe sustainability is a researchable topic.”

‘Founding fathers’

The more conservative bent of MBA disciplines perhaps explains why Portland State University recently developed a sustainability specialty within its Masters in International Management (MIM) program, but not within the MBA. With a focus on moving toward closed-loop systems in large global corporations, the MIM specialty comprises a core class on global sustainability and three additional courses on metrics, product design and stockholder management.

“I came to believe that if sustainability was ‘bleeding-edge,’ there was also a market for it,” said MIM professor Scott Marshall, who spearheaded the program. “I feel fortunate in our department we have the ability to innovate.” MBA students also have the option of earning a graduate certificate in sustainability, a new interdisciplinary program PSU launched last fall. Other MBA programs are also pursuing following the graduate certificate model.

And across the region, student demand is increasing. Last year, six out of 60 students enrolled in the MIM sustainability program. Eleven students are expected to enter next fall. Since opening its doors in 2001, BGI has doubled its enrollment every year; the school will meet its target of 50 students for the fall class of 2005. At the University of Washington, said Poston, 15 percent of entering MBA students expresses interest in specializing in corporate social or environmental responsibility.

“Teasing out” the market value of green business degrees remains a challenge, said BGI’s Bunch. The majority of sustainable business graduates, he said, move into “regular” MBA jobs without the words social or environmental responsibility attached to the job title. By the same token, “standard” MBA graduates are also moving into corporate responsibility positions. For example, Rick Woodward, who received an MBA from PSU, is now corporate sustainability director for Wilsonville, Ore.-based Coastwide Laboratories.

Job postings cast light on the rising market demand. According to Laurie Gray, development director at Business for Social Responsibility (BSR), the number of job listings citing sustainability specializations has steadily increased over the past few years. Four hundred such positions are now listed on the BSR job site, she said. Eight years after the demise of the UW program, sustainable business management education is coming back to life in the Northwest — even if it’s not yet in full bloom. “It feels like we’re at the beginning of the sustainability movement,” said BGI graduate Erin Gately.

Students participating in the first wave may have the advantage, Gately added. “Because it’s so new, we get to be around the founding fathers,” she said. “It’s an amazing experience.”

As for the job market, Gately is equally optimistic. “Certainly our state has embraced sustainability,” she said. “If someone had a personal interest in sustainability, they could take that thinking into any job.”