Byrne: Nathan, I want to get back to your Social Venture Fund, how that works, and how that may have shaped your idea of what purpose you’re going to pursue in your life.
Stevens: Absolutely. The Social Venture Fund was probably the number one reason why I came back to Ross other than I’m from here. It is an awesome institution that we have. It’s entirely student-run, so it’s a student-run fund. It was an integral part of both learning about impact investing, which is what I wanted to focus on, but also about management. We have 40 really diverse members of this fund. We have real capital. We work with entrepreneurs, and we’re doing it within the university, so the university has done a huge amount of effort to set that up.
It’s not the easiest entity to run to have students giving out cash to these entrepreneurs. It’s innovative. It’s experimental. Some things we’ve done haven’t worked, but that’s part of learning. Being in the space at Ross for at least two years to try that out has been hugely influential. I would say it’s probably by far, the most impactful thing I’ve done here and also the most learning has been through the fund itself.
Byrne: Give us a few examples of what you’ve invested in.
Stevens: Sure. One of my favorite investments was called Court Innovations. Basically, they would digitize the judicial process and put a lot of it online. For many low income or less mobile individuals, the court system and the process by which you have to go through legal infractions can be very punitive. There’s the cost involved. There’s a lot of transportation issues, many things that put people into a hole. This company works with court systems throughout Michigan to put the process online, tell them when they need to be there, what they need to do, and streamline the process for many demographics. People have really taken to it, and court systems have seen more people not missing fines, not missing times to show up, and also experiencing quicker processing times.
We also invested in a company that works in alternative proteins, specifically in cricket protein. We know that the agricultural system, the process of creating our mostly animal-based diet is pretty impactful in the environment in a negative way, and crickets are a way to really reduce the resource load and yet deliver more protein per pound than many of the other animals we eat now. They started with chips, which are actually delicious. I’ve had them many times.
Now, they’re moving into actual protein powder, so we’ve seen a lot of interest in the athletic community around a really diverse protein blend that they can provide through crickets, all while having a really reduced environmental impact.
DeRue: You know what’s really neat about what they’re doing? The social impact venture fund is a great testament to this. It was the first Social Venture Fund in the country, so it started in 2009. What’s been really exciting is to see that transcend the University of Michigan and the Ross School of Business and find its way into other business schools because we get the students who come here, and we get the privilege of educating them and working with them and being partners with them in business education. This only works if we scale what we’re doing across the country and across the globe. To see our Social Venture Fund become a model that is beginning to be replicated at other schools is really exciting.
Byrne: In fact, Nathan, you had schools seek your advice on how to set one up, right?
Stevens: Yes. I became a popular person for the year. We’ve had, I’d say 10 to 15 schools ask us how we’ve done it, how we set it up, how we manage it, and the realities of having a student-run fund within a university. We’ve been as helpful as we could be in helping them set it up, and I’ve seen more and more schools year after year come back and have these funds. I think it’s an awesome legacy that we have.
DeRue: It’s part of the curriculum. It’s not something that students are just doing on the side. It’s a core part of the curriculum, and faculty are engaged, and so, the education that is the underpinning to this. That’s where universities and business schools have to get right because otherwise, it just becomes something that’s on the side that happens. You want it to be part of the curriculum as a fundamental experience that students are having.
Shih: I would definitely echo that because I think a lot of the people who may be tuning into this may be asking themselves, ‘If I don’t get an MBA, what are my other options? Could I just jump straight into a social impact venture or something else I’m interested in?’ What so many of us got out of this experience was the combination of both a safer setting in which to do something like the Social Venture Fund but also to marry that with academic reflection and teaching and support so that unlike situations you may have in the real world, you can experiment with something, have it go awry or go really well and then actually be able to kind of come together with faculty or with people experienced in this field and reflect on what we learned from that.
Byrne: That’s a perfect segue into the next question. It’s easy when you sit in a class and you’re talking about the ethical implications of a decision that a company has to make. But then, when you’re in the real world, how does that play out? How do you bring your values to work? Is it a challenge when you’re in a profit-making environment?
Shih: I would say that it has a lot to do with both finding an organization that has strong values to work for as well as making sure you are a leader within that organization living those values. At McKinsey & Co., we have this wonderful value of the obligation to dissent. Not only should you feel comfortable to raise your hand and say something’s not right here, but you actually have an obligation to do so.
At McKinsey.org, we have adopted that as well and I feel like it’s my responsibility as one of the leaders of that team to create a nurturing environment where people get to have those hard conversations. We have had a few of them on the right thing to do in the face of regulation or of players doing things that are unsavory that we somehow have contact with. How do we actually navigate those situations? Having a diversity of opinions that are all grounded in an ethical perspective has been really important for that.
Byrne: Scott, real-world competition is intense. There’s a lot of pressure on people to perform, and some people don’t respond well to it.
DeRue: I think that’s right. I mean, we can all find examples of business leaders engaging in actions that we would not be proud of. At the same time, I believe that the overall majority of businesses and business leaders are giving voice to their values and are making choices that are serving a diverse array of stakeholders. I think what we all can do is give greater visibility to those examples of what we might refer to as ethical leadership or I would just refer to as leadership.
As a school, we want to unpack the cases that we’re proud of. We want to unpack the cases that we’re not proud of and normalize this conversation. I think that’s one of the most important things we can do. There are many for-profit entities that are not very good at making profit, and there are nonprofits that are pretty good at making profit, and so, I think what we can do across all forms of organization is normalize this conversation of values and ethics, and what our opportunity and our responsibility is to make an impact in the world.
Byrne: Great. So we have some really good questions here from our live stream audience. Let’s go with the first one: What advice would you give someone who wants to make a switch from the nonprofit world to corporate or consulting but still wants to make an impact? Stefanie?
Thomas: I would say start with your why. Dig really deep to understand why you’re questioning yourself about your career. What is motivating you around impact? In the impact space, you really have to define it for yourself because if you don’t, you can definitely be led astray, and you can be working in impact and hating your job and not feeling like you’re delivering on your purpose. So, I think starting with the why is incredibly important. From there, you need to remain open to a lot of possibilities.
For me, I knew my why was focused on capital accessibility. My father was a serial entrepreneur. I saw him struggle to get access to capital to build a business, so I connected with that personally. I didn’t think I’d be in venture capital, but I was open to it coming to Ross, really digging into the Social Venture Fund, digging in with the Zell Lurie Institute, and really figuring out what were the tools that I could use to have my purpose.
Shih: Sometimes, being an independent musician can be like a nonprofit thing. You think you’re doing a lot of good. The profit margins are not there, but may be implied in the question is, how do you keep your soul while you’re going into some of these very traditional business fields. You should try to know what you want to get out of each experience, even down to six-month increments or whatever makes sense for you. For me, that was really important as I was going through the basic training of consulting, which was a very different world for me. I definitely felt like a fish out of water a lot of the time, but I kept feeling like, what is the thing that I really want to learn from this chapter? Sometimes, it was something as simple as I want to know how to build a really robust business case for something. I want to know how to analyze the growth opportunity of an organization, for profit or not.
Then, later, it became I really want to learn how to manage people and to be an inspiring leader, and to really help coach people to the next level of their performance. So, with each step of the way, I had specific goals of what I wanted to get out of it and also a sense of how I would then transfer that to an impact situation because sometimes the project I was on was not necessarily impact oriented. But there were certain skills that I was building with the ultimate goal of getting there.
Byrne: Nathan, I think this is a good question for you. Many MBA programs these days are talking about social impact. How can candidates tell when a program has a true commitment to impact?
Stevens: Sure. That’s a great question. I think in my recruiting process, I went through that. You try to pull back the layers and see what’s really going on there. One is understanding and speaking with the students themselves. You need to make that effort to reach out to students in the program and say, “Hey, has this matched up to your expectations? Are you seeing the programs that they state are there? Are they really there?” That’s the Social Venture Fund. A lot of people say they have a fund, and they don’t really have a fund, and so that was a big deal to me. I think the other thing is being clear about what you want in impact. That’s a huge space. We talk about it across the spectrum.
I came in with a very narrow area of impact, and I recognize now that can mean a lot of things to a lot of different people. So if you take a little time and define kind of what you’re looking for in the school, what impact you want to have, and where you think that will actually manifest itself, you can be a little more targeted with your questions.
Byrne: This goes back to the advice we heard in our Admissions Director panel. Talk to students. Talk to alumni. Visit the school. Sit in the cafeteria. Arrange an appointment with the head of the Social Venture Fund, someone who went to MBAs Across America, someone who was a dual degree person whose heart was in two different places, and you get a lot of information. Scott, how do you educate leaders to incorporate sustainability into their thinking?
DeRue: If you go to any top business school, you’re going to get the basic fundamentals. What we do that I think is pretty unique is put students in situations where they have to wrestle with these challenges. How do you create a sustainable solution for city building and placemaking? How do you create sustainable solutions for energy consumption? These are really wicked problems that don’t have straightforward solutions.
I think the best thing we can do is put our students and our faculty in those situations together in ways that create an opportunity to wrestle with these challenges and use the business fundamentals to have an impact. In doing that, we’re imprinting not only a set of values but also a perspective on the power and the promise of business and what it can do. To Nathan’s point, the definition of impact actually expands, and we find this for almost every student who walks through our doors. They start to see with a different perspective, a broader view of the impact that one can have in the world no matter what your career path might hold.
We achieve that by putting our students and our faculty in these situations where they’re working together with wonderful organizations all around the world on these big wicked challenges. In this case, the challenge is sustainability and forcing them to come up with solutions that may be half-baked, and that’s okay. We’re learning, we’re growing, and we’re expanding our perspective on how we can have an impact through our careers.
Byrne: That’s great. Would you know our time is up? So, thank you all for participating. It was a great session.
THE COMPLETE 2019 MBA SUMMIT
Candid perspectives from MBA students, admission officials, and employers