Larry Fink, the chief executive officer of the global mega-investment firm BlackRock, sent a missive recently to other business executives urging them to step up and be at the forefront in solving social and political issues. “The world needs your leadership,” he wrote, because governments are failing in their responsibility to effectively address these challenges.
Indeed, the world has grown to its most turbulent time in recent memory. The “old-guard” has fomented geo-political and socio-economic turmoil with nationalist movements, shifts in global alliances, instigation of trade disputes, and many other factors.
And there are ongoing social and economic issues — the #metoo movement and gender equality, diversity and inclusion, immigration, the permeation of artificial intelligence and information technology, the growth of the wealth gap, mega-mergers and takeovers, regulation and de-regulation, and so much more — that are influencing the core mission of every company every day and everywhere.
In such a tumultuous environment, the foundations of economies have been shaken and companies are scrambling to keep up with this new world order of disorder. Corporations around the world have begun to realize that you can’t be neutral on a moving train, to quote the late Howard Zinn. The world is being transformed by seismic shifts and companies, just as individuals, are being forced to choose a side, a belief, something to stand for. In his annual letter to business leaders last year, Fink wrote that it was crucial for businesses to stop concentrating on just the bottom line. Rather, they must make “a positive contribution to society.”
This climate has made business leadership more challenging than ever before, but also all the more meaningful. C-suite leadership is no longer called on to simply fulfill key performance indicators and profits, and satisfy investors. Corporate heads are now charged with defining the vision, direction and strategy of an enterprise that does good while also doing well. The bottom line is not just black or red, it is humanism. And this nascent trend is only going to grow as millennials begin to assume greater leadership roles. Indeed, the 2018 Deloitte Millennial Survey clearly shows that younger people want the businesses they support and work for to “improve society” rather than “generate profit.”
Changing the business world – and, of course, the world in general — doesn’t happen in a vacuum. CEOs aren’t just going to kowtow to Fink’s declarations. Rather, this will require, in large measure, a new breed of corporate leaders who are educated and trained for this new and evolving environment — one marked by technology, inclusivity, ingenuity, and, most importantly, empathy.
As such, the role of a certain type of business school has become more relevant than ever. No longer can business schools simply serve as cash cows for their parent universities. No longer can business schools simply churn out thousands of graduates who see their MBAs just as a necessity to professional advancement. No longer can business schools simply teach as they may have done even 10 years ago.
I would argue, therefore, that business schools must adopt the same tripartite mission of their parent universities: research, academics, and service. As it pertains to the first, professors need to be engaged in comprehensive study of the new socio-economic realities and how they inform and are informed by government policy and the labor force, among other areas. They need to produce evidence-based solutions, often in multi-disciplinary collaboration with non-business school academics, as well as by tapping into the minds of innovative C-Suite executives and disruptor-entrepreneurs.
Curricula at business schools need to incorporate topics that go beyond the normal scope of finance, marketing, and entrepreneurship. To truly understand markets, for example, requires an understanding of the people and the zeitgeist of those markets. Infusing coursework with philosophy and sociology content can only enhance a student’s experience. At the same time, faculty must impart to their students a sense of how businesses shape local communities and how they impact, or don’t impact, the daily life of the people who live and work in those communities.
Above all, business schools must weave ethics and a sense of morality throughout their programs in order to inspire the leaders of tomorrow to work in a spirit of service and integrity, basing their action on the highest standards of professionalism, accountability, and justice.
“The mission of governance and leadership,” says Monsignor Fernando Ocariz, the chancellor of the University of Navarra, the parent institution of IESE Business School, “should always be service.” These words should be the beacon that illuminates the very raison d’être of business schools. We must produce global executives who feel an obligation to be altruistic leaders. This may not be the easiest path to take, but it is the right path.
Eric Weber is associate dean of IESE Business School, ranked by The Financial Times as the No. 1 business school for professional education four consecutive years.