EDGE

Will “purpose” be the new mantra for business? Or just a buzzword?

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Katie Krossby Katie Kross, Managing Director, EDGE

To train leaders who “make a decent profit—decently.” That was Harvard Business School’s stated goal when it was founded in 1908. One hundred years later, as we pick up the pieces of the most recent financial and housing market collapse, it seems that few people would believe that business schools espouse that balanced mission today. Looking at the crisis in hindsight, academics, executives, and pundits alike have speculated about whether HBS and other business schools are teaching quite a different set of values to the MBAs they graduate today. Aspen Institute portentously raised this question in its 2001 “Where Will They Lead?” survey of incoming and exiting MBA students. It found that over the course of their two years in business school, MBA students shifted their view of corporate priorities from focusing on customer needs and product quality to first and foremost maximizing shareholder value.

However, there is reason to believe that a new era of business is dawning. At the annual Net Impact Conference held in Ann Arbor, Michigan this year, Harvard University Professor Srikant Datar shared findings from his research for the book Rethinking the MBA: Business Education at a Crossroads. Professor Datar and his colleagues interviewed executives about what business schools have done well, and what they haven’t done well, in preparing MBAs to be the next generation of business leaders. What they found is that business schools are great at teaching students concrete skills and methodologies, but not at instilling in them a greater sense of purpose and identity as a leader. Professor Datar and fellow panelist James Walsh, Professor at University of Michigan’s Ross School of Business referred to the U.S. Army’s leadership slogan: “Be, Know, Do.” In recent history, business schools have done a great job at delivering on “know,” they said, but they need to add “doing” and “being” a leader to the essential training of an MBA.

Blair Sheppard, Dean of Duke’s Fuqua School of Business, shared a similar view in his remarks to our EDGE Advisory Board last week: “I think one of the things that’s happened in business schools is, the part of [business school] that has to do with getting markets to work has lost a little bit of the moral purpose behind business.”

At the same time, I think that we have seen MBAs begin to develop an increasing desire for a sense of purpose in their careers. Dan and Meredith Beam of the consulting firm BEAM, Inc. predict that employees will move beyond thinking about their careers in terms of a particular company or job function to orienting their careers toward purpose. “We’ll see more of this in the ‘3.0 world,’” says Dan Beam. My friend and colleague Mrim Boutla, a career coach who helps students align their values with their job search, agrees: “In the post-Great Recession era, management professionals know that job security is a myth in Corporate America. Instead of defining career success as working for a prestigious company for the biggest possible paycheck, an increasingly large proportion of top talent is focusing on building a purpose-filled career that successfully blends financial return with social impact and environmental responsibility.”

With all this talk of purpose, are we on the verge of a major business shift?

Appealing to a sense of purpose was a key part of the conversation in the conference sessions I attended on both social innovation and green careers at the Net Impact Conference. This message resonates with new-generation leaders. One tweeted message from the event sums it up well: “Leaving [Net Impact Conference] with a renewed sense of purpose.”

So, with all this talk of purpose, are we on the verge of a major business shift? One in which both companies and employees strive to be working to some collective contribution?  It’s hard for me to imagine a world in which this nebulous “sense of mission” could ever trump the primacy of next quarter’s quarterly earnings targets. But the Net Impact Conference gave me reason to hope. The conference was attended by roughly 2,500 people, most of whom are current MBA students. The rest of attendees are students from other graduate and undergraduate disciplines, professionals, and academics. They were joined by 50+ recruiters who specifically want to attract these purpose-minded students to their organizations.

The conference attendees are by and large young, bright, inventive, and fiercely determined to assume the role of change agents in business and society. At the conference, they packed sessions on how to overcome hurdles to renewable energy development in the U.S., how to scale up mission-driven companies, and how to use crowd-sourcing to drive solutions to social challenges. They competed in an “Iron Chef”-style competition to develop an innovative supply chain solution for a waste material. They asked tough questions of Nestle Waters and Ford executives during plenary sessions and pitched sustainable business plans directly to Walmart managers.

Are today’s companies thinking past next quarter’s shareholder reports to a higher sense of purpose? Maybe not, but Net Impact gives me reason to hope that someday, they will.

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