INVESTING FOR GOOD
Joanna Herrmann is another second-year Erb student who’s a little surprised to find herself in business school. As a college student at the University of Virginia, she studied human rights and planned on going to law school. But that’s not where life took her. The Aspen Institute hired Herrmann right after her 2008 graduation; she started as an executive assistant, and within five years became a senior program associate, working on market-based solutions for poverty and inequality. She decided that she could make a more concrete positive impact through business. “The reality is that for-profit corporations have more money than government and nonprofits combined,” she says.
Herrmann realized that her hard business skills were lacking. She’d learned everything on the job—so she decided to go for an MBA. She applied to six different schools, evaluating each school’s commitment to impact by looking at how students were actually spending their time. Ross won. “I felt that not only was the admissions office touting these claims, but I actually saw the actions of the students and the opportunity,” she says. A belief in the value of interdisciplinary education led her to apply for a Master of Science in Sustainable Systems through the Erb Institute.
Though Erb students spend their first year taking classes in the School of Natural Resources and Environment, Herrmann has worked on her finance skills outside the classroom. She joined the Social Venture Fund when she came to Michigan, and she’s currently serving as its director of investments; this month, she’s fielded calls from folks at American University and the University of Virginia who want to start their own funds. Last summer, Herrmann interned at SoFi (short for Social Finance), a startup that refinances student loans at lower rates than traditional institutions (see Disrupting The MBA Loan Market). In the long term, her goal is to help a multinational corporation integrate social and environmental concerns into its core business strategy. Though she started her career at a nonprofit, she knows that to have any kind of credibility with one of those organizations, she needs to gain traditional experience.
GOING BEYOND “THE ZEALOTS”
It’s not difficult to get students like Herrmann and Ballantyne into do-gooding classes and activities. Still, a big measure of a school’s dedication to that area is the extent to which it can make a mark on everyone else—“not just the zealots,” Hopp says.
That’s why Ross integrates impact-related themes in its core curriculum. For example, Hopp teaches the core MBA operations class, and he includes case studies on sustainability and positive organization management (e.g. how did REI change its carbon footprint by shifting from a sales model to a rental model?).
Additionally, as part of the Ross Leadership Initiative, every incoming student participates in the Impact Challenge, which requires groups of students to create and fund businesses within a week. When Ballantyne was an incoming student, participants were tasked with creating organizations that would make Detroit youth more likely to become entrepreneurs. The winners’ reward? Getting to implement their business over the following year. “It was a super great challenge. Like, amazing,” Ballantyne gushes. She says it made the consulting and finance people go, “Oh, business can actually change the world.”
CAN POSITIVE BUSINESSES TRULY BE PROFITABLE?
Business schools are typically highly pragmatic, but any academic institution worth its salt has to produce research. Hopp is concerned with verifying that positive business and sustainability don’t just sound good—that they can be core components of profitable business models. An example question: To what extent does a progressive environmental stance help recruit and retain workers? So far, it’s looking like impact and profitability actually fit together well, Hopp says.
Not that research is totally incompatible with action. In the next five years, Hopp also wants to give Ross students a better idea of how to take everything they’ve gleaned from the school’s initiatives and integrate that learning into successful business models.
Arguably, that’ll be the real demonstration of Ross’s success in the impact space—not the kinds of students it attracts or the variety of activities it offers, but the extent to which its graduates change the way business is done.