In business school classrooms all over the world, there’s a lot of discussion these days about the three Ps: Profit, People and Planet. Perhaps more than ever before, students are using MBA-learned skills to find jobs with purpose that achieve all three goals: To not only make money but to treat people well and respect the environment.
To discuss how MBA graduates are using the degree for social impact, we brought together two alums, a graduating MBA student and the dean of the University of Michigan’s Ross School of Business, Scott DeRue, in a wide-ranging discussion on how both companies and nonprofits are using business solutions for meaningful change and positive good. The conversation was part of our second annual MBA Summit, sponsored by Michigan Ross.
The panel on social impact was the third of three conversations during the day-long event which was live streamed to a global audience in April. The first involved the chief gatekeepers at Ross, Dartmouth Tuck, and UC-Berkeley Haas. The second panel had students from both Ross and Haas talk about the MBA experience. All were moderated by Poets&Quants founder John A. Byrne.
In this session, the guests also included Nathan Stevens, who had been director of investment at Ross’ student-run Social Venture Fund and will begin to work for McKinsey & Co. in Dubai; Cynthia Shih, the global director of Sustainable Communities at McKinsey.org, and Stefanie Thomas, who is an impact venture investor with Impact America Fund. Shih graduated with her MBA from Ross in 2013, while Thomas graduated in 2015.
An edited transcript of the conversation follows:
John A. Byrne: Okay, so Cynthia, let’s start with you because you were the entertainer who came to business school as a non-traditional student, and you’re doing social impact work at mckinsey.org. Did you think of the MBA as a path to having that kind of career?
Cynthia Shih: Absolutely, and that’s actually why I came to an MBA program to begin with. As you can imagine, being a touring musician is not an obvious straight shot to having a social impact on a global scale necessarily except maybe through song. So I really thought hard for myself, what is a place where I can really do that kind of complete career switch and equip myself with the basic skills and knowledge that I would need to bring to a social impact endeavor? That brought me very quickly to the point where I realized I need to understand business, I need to understand market-based solutions, I need to understand how the largest organizations in the world work, how they make decisions, how they operate, and that’s how I ended up with an MBA program.
Byrne: Stefanie, how about you? Did you come to get your MBA knowing that you would end up an impact investor?
Stefanie Thomas: Not at all, but I did know intuitively that I cared about capital accessibility. I didn’t know until I got to Ross that it would manifest itself into the venture capital space where I would be working directly with high growth technology-based companies, but it all started with my previous work before coming to Ross. I was working on Wall Street with a lot of global companies that had large supply chains. A lot of the financing was dedicated to supporting even the smallest of businesses. When I looked around at these systems supporting these smaller businesses, and even some very innovative high growth potential companies, there weren’t a lot of adequate systems out there. So, that’s what really got me thinking, how can I connect the dots between my banking skill set and my experience to drive more capital to smaller businesses and upstarts? So, being at Ross really gave me the breathing room to come out of the workforce and understand what motivates me at the core, and then to also start to retool my skillset so that I could apply it in the entrepreneurial ecosystem.
Byrne: That’s great. Nathan, even though you’re going into a more traditional consulting role at McKinsey, you came from an economic development background. You’ve also been the head of the Social Venture Fund here, so clearly, you have that DNA in you that makes you want to do good in the world.
Nathan Stevens: I’d always thought I was going to get a degree in international relations. I’d worked in the State Department. I worked in development. My early idea was to get a degree in international relations, but I got to the point in my career about four years ago where I said the problems I’m facing are much more about managing organizations in difficult settings and selling solutions and economic development to private agencies and actors. The solutions weren’t going to be found in an IR degree. I thought they were much more aligned to an MBA, so I came back with the idea of actually doing impact investing. I did that for my summer internship, taking a bit of a left turn, but I don’t think I’ll stray too far from it for too long.
Byrne: One thing about a consulting job is it prepares you for anything just like the MBA. Scott, you’re seeing this interest in social enterprise among millennials and Gen Zs in a much bigger way today than ever before, right?
Scott DeRue: What has me really excited is folks like Cynthia, Nathan, and Stefanie. The demonstrate a hunger for tackling the most challenging and pressing problems of our generation and likely the next generation, and they want to find market-based, business-oriented solutions so that we can gain scale to have the most impact. At Ross and across the globe, we’re providing the training for that next generation of business leaders who understand and appreciate the power of business and the impact that it can have in the world. It’s our responsibility and opportunity to give them the tools that they can use to then go leverage business to have that positive impact.
Byrne: There’s a general acknowledgment now that the world’s biggest challenges require market-based solutions and business know-how to solve. In the past, that may not have been true. You had a lot of really good people who were cause-oriented who may not have had the tools to do the job.
DeRue: I think that’s exactly right. Without a financially sustainable model, which in some sense is what business is able to provide, we can’t have the impact that we aspire to have. I often say without margin, there is no mission. What’s really exciting is the students who are coming into our universities are so hungry to have that impact. We, as universities, as business schools, have the opportunity to give them the tools that will then unlock that potential, which is really exciting.
Byrne: So, for some, it would be contrarian to think that if they want to pursue a career with social impact, they should get an MBA. Clearly, none of you were in that category. How come?
Shih: Part of the reason why it made sense to me was I was part of a dual- degree program. I enrolled in the Erb Institute, a global sustainable enterprise here at the University of Michigan, which is a program that involves the MBA at Michigan Ross as well as the School for Environment and Sustainability. So, I basically spent my time going between the two schools. We joked in the beginning that it was like spending time with the tree huggers one day and with the capitalist pigs the next and kind of developing a lot of cognitive dissonance. But I actually found that to be less and less the case. The business school had really kind of absorbed a lot of that influence from all of the other schools. So, I felt that I actually met a lot of peers who were thinking about business from a public policy and social impact perspective. They are thinking about wealth inequality and how to address those kinds of issues, how to tackle climate change and environmental issues. So I was actually pleasantly surprised to find that the MBAs and the business school was actually thinking about these problems and grappling with them and thinking about how can we work together. It was really a rich experience.
Byrne: Stefanie, some prospective MBA students wonder if they should instead pursue a policy degree or a social administration degree. Was that in your consideration set before deciding on business school?
Thomas: Actually, no. I hadn’t thought of that. Being at Ross opened me up to all the possibilities. I had a lot of classmates who were doing dual degrees. I thought it was very important to have those classmates shaping and informing my opinion and my lens about the world. Today, we’re moving into systems that are more emergent, more complex, and more uncertain. With that, we need business leaders who have multidisciplinary backgrounds that can allow them to leverage a lot of different experiences and knowledge around how different economies work together. It’s going to be incredibly important to have a dynamic lens on the world and on its problems. Business as a tool, finance as a tool, is going to be an important way to drive a lot of that change home.
Byrne: Your comments lead me to think about the incredible diversity of an MBA class that enriches the experience. As an MBA student, you’re not only going to be sitting next to investment bankers and consultants. Talk a little bit about the people you’ve met and how it’s helped shape you and your thinking.
Stevens: One of the advantages of Michigan, in general, is how many great programs they have across the university. We have public health. We have foreign public policy students. I think those people joining the class, maybe as dual degree students, maybe just as within their own track, have added to the conversation and made it much richer. I think it also challenges the business students to defend their stance and also opens them up to other opinions and other ideas on what business should and could be or is right now. That has been great for me personally. It’s been an exciting way to learn.
Byrne: And you’ve seen a lot of students who want to be part of the Social Venture Fund, an MBA club which invests money on behalf of social enterprise. How many applicants and how many students participate?
Stevens: I might be revealing some confidential numbers. We had about 100 applicants for about 20 spots. It’s a very competitive application process. We get a wide range of students. We have BBAs, we have MBAs, we also have law students join us, which is an incredible advantage. I think it was about 10 MBAs, five BBAs, and five law students. I know the other student funds at Ross draw from other schools as well.
Byrne: And all from different backgrounds?
Stevens: Yes, very wide backgrounds. We have a lot of non-traditional students, nonprofit backgrounds, people who are going to consulting and banking. We’re better off because of it, and it makes for a much richer conversation in the fund.
DeRue: So there’s 19 schools and colleges at the University, and some of our signature experiences draw from north of 12 of those 19 schools, bringing them all together. Our leadership crisis challenge, for example, which often has a social impact component to it, asks what’s the impact of the choices you’re making as a business on various stakeholders including but not limited to your shareholders. I think this year we had 11 of 19 schools represented in that crisis challenge.
It’s wonderful for those non-business students to get exposure to a set of business tools and principles that help you make choices, and then for our business students to get exposure to what are the policy implications. What are the community implications? How do you make these tough choices that are very values-based and principle-based while being sensitive to the broader world? It’s been a great learning experience to bring those folks into our community. It’s one of the metrics we actually track, both in the curriculum and outside of the curriculum: how many students are we bringing into the school from all the various places on campus.
THE COMPLETE 2019 MBA SUMMIT
Candid perspectives from MBA students, admission officials, and employers