Volume 25 · Number 3 · Spring 2008
“Every day, I help companies understand that sustainability is good for their business,” says UC Davis M.B.A. graduate Ted Howes, who works at IDEO,
a global innovation and design firm. (Photo: Karin Higgins/UC Davis)
Beyond the Bottom Line
A new generation of M.B.A. graduates is using their business acumen for good, not greed.
In the fall of 2005, Ted Howes, a San Francisco native with an undergraduate degree in Chinese history from UC Berkeley, found himself in the hills of Colombia, enjoying a meal of braised turkey in the home of a coffee farmer who, because of inducements from Starbucks, had adopted more sustainable growing methods. The methods allowed use of less synthetic fertilizer and pesticide, reduced soil erosion and downstream pollution and yielded higher-quality beans. During his five years as a consultant in charge of designing and implementing Starbucks’ C.A.F.E. (Coffee and Farmer Equity Practices) program, Howes also visited Zambia, Indonesia and Guatemala — virtually every place where good coffee is grown — to track progress in environmental and social responsibility throughout the coffee supply chain. In 2006, Starbucks bought 155 million pounds of coffee from C.A.F.E. Practices-approved suppliers, more than 50 percent of all coffee purchased by the company worldwide and double the volume of the year before.
“The quality of the coffee went up,” Howes says. “And it changed people’s lives.”
An avid cook and mountain hiker, Howes started his career as an environmental journalist in Taiwan. He is also an M.B.A. graduate (UC Davis, ’04), an educational choice that surprises no one more than Howes himself.
For decades, an M.B.A. degree has been associated with a profits-above-all ethos. “Greed, for lack of a better word, is good,” said Gordon Gekko, a character memorably played by Michael Douglas in the movie Wall Street. And in the minds of many, it’s been the defining characteristic of business and of those who pursue its professional degree. But is such an assumption warranted?We would do well to ask. Today, the nation’s business schools are producing five times more M.B.A.s than they were three decades earlier (142,617 in 2004–05, the latest year for which statistics are available, compared with 26,490 in 1970, according to the National Center for Education Statistics). The schools deliver M.B.A.s who head for careers as CEOs and company presidents, people with the power to hire, fire, promote and finance the dreams of the rest of us. Are these young men and women emerging with Gordon Gekko’s greed — or with Ted Howes’ commitment to making a positive impact?
Cleveland Justis, director of programs and strategic initiatives for the Golden Gate National Parks Conservancy, sits in a still-rundown office on the second story of a long-neglected building at Fort Baker, a former military village on the north shore of San Francisco Bay between Sausalito and the Golden Gate Bridge, on some of the most valuable real estate in the world. Justis is an ’05 M.B.A. graduate who recalls: “A friend actually took me aside when I told people that I was going back to school to get an M.B.A. She said, ‘I can’t believe you’re selling out.’”
At the time, Justis was executive director of the Headlands Institute, a Marin County environmental education and conference center. He had come to the conclusion that running a nonprofit takes business skills.
To acquire them, Justis enrolled in the UC Davis Graduate School of Management, one of the youngest, smallest and most highly rated graduate business schools in the nation. Students in the full-time program invest two years and about $48,000 earning their M.B.A.s. Those in the 2007 graduating class took jobs with an average starting salary of $85,555. Two out of three went to work in the Bay Area. About one in five stayed in the Sacramento region. GSM also offers executive M.B.A.s for working professionals through evening and weekend classes at sites in downtown Sacramento and the Bay Area.
M.B.A. in hand, Justis went to work at the conservancy, a nonprofit organization that supports one of the largest urban national park systems in the world: more than 30 park sites that form a greenbelt along the Pacific Ocean from Tomales Bay in the north to the San Mateo watershed in the south. Among his new responsibilities is overseeing the launch of the Institute at the Golden Gate, part of a $150-million public-private transformation of Fort Baker into a world-class park lodge and retreat center. The institute will bring together business, government and the nonprofit sector to solve critical environmental issues.
Wearing a navy windbreaker against the damp fog on a chilly afternoon in December, about six months before the scheduled opening date, Justis guides guests around the fort’s former parade ground, a 10-acre oval lawn encircled by 30 early 1900s structures in various stages of renovation, many of them stately homes that once served as officers’ living quarters. Just a couple hundred yards away, the northernmost tower of the Golden Gate Bridge rises above the mist.
“These are national treasures,” Justis says. “They were literally falling into the ground. Now they’re coming back to life.”
Thomas Nelson is using his M.B.A. (UC Davis, ’07) to preserve the agricultural character of western Yolo County’s Capay Valley. Through Capay Valley Vision, a nonprofit organization he founded in 2001, Nelson works to equip the area’s farmers with the business, branding and organizational skills they will need to promote sustainable regional development. His next project will be to launch a Capay Valley farm shop, a cooperative venture that will showcase members’ local organic produce, wine, olive oils, nuts, honey and flowers. Plans also call for a gourmet deli.
“When you live in a place as beautiful as the Capay Valley, you want to preserve it,” explains Nelson, who lives with his wife at Full Belly Farm, a 250-acre organic farm.
In the future, more M.B.A.s may look like Howes, Justis and Nelson. The Washington, D.C.-based Aspen Institute, an international nonprofit dedicated to “fostering enlightened leadership,” tracks business schools’ efforts in an annual “Beyond Grey Pinstripes” survey. The latest found that 63 percent of schools now require students to take a course dedicated to business and society issues, compared with 34 percent in 2001. Progress was reported in other measures, too.
Even the United Nations is getting involved. Last summer, the U.N.’s Global Compact — an effort to promote universal principles of responsible business — launched its PRiME initiative: “Principles for Responsible Management Education.” Among the principles: “triple bottom line” accounting, a way of evaluating organizational success that puts “profit” after “people” and “planet.”
GSM was an early adopter of the PRiME principles. Measured against schools 11 times its size, it also ranked 29th in the world in the 2007–2008 “Beyond Grey Pinstripes” survey for integrating issues of social and environmental stewardship into its curricula and research.
The Association to Advance Collegiate Schools of Business International, organized in 1916 by Harvard, Yale, Columbia and a dozen other prominent institutions, currently accredits more than 500 business schools worldwide. At its February Deans Conference in San Antonio, the association invited the deans of two of those schools — one of them GSM Dean Nicole Woolsey Biggart — to showcase the ways in which their programs foster global corporate responsibility among students.
“We teach courses in sustainable business and include ‘triple bottom line’ topics in our courses. But we believe PRiME is about integration of skills with philosophy, values and understanding,” she said. “PRiME is a practice, not a topic.”
Biggart cited more than a dozen GSM examples: placing students in internships at socially and environmentally progressive firms; recruiting students to consult for soup kitchens, domestic violence shelters and other nonprofits; and bringing in inspirational executives — including Will Agatstein, a former Intel vice president in charge of creating products for the developing world, and Russell Read, chief information officer of the California Public Employees Retirement System — to teach quarter-long classes. GSM also extends its reach and influence by creating and participating in networks of like-minded organizations, such as the women’s organizations that collaborate with the school on the annual UC Davis Study of California Women Business Leaders. And the school works to transmit PRiME principles throughout the campus by bringing M.B.A. candidates together with undergraduate and graduate students in the sciences, law and medicine. Even GSM’s new building, Maurice J. Gallagher Jr. Hall, represents environmental leadership. Set to open in fall 2009, the building and an adjoining conference center are expected to earn the Gold standard of Leadership in Environmental and Energy Design, or LEED, certification, becoming among the “greenest” buildings in the University of California system.
GSM also picks the right students. Only one of every four applicants to the full-time program is admitted. Every applicant is interviewed by a staff admissions officer, and most make a presentation to an admissions committee. “We are admitting students we would want to be in charge,” says Brad Barber, a professor of finance and founding director of GSM’s Center for Investor Welfare and Corporate Responsibility. “Our typical student arrives with a deep concern. We reinforce that tendency.”
Alumni often return to teach these values to the next generation of M.B.A. students.
Cleveland Justis returns to Davis once a year to teach a quarter-long evening “Social Entrepreneurship” course.
Morlee Griswold, M.B.A. ’85, comes back to present an annual lecture on philanthropic business practices. Before the concept of preventive medicine became mainstream, Griswold helped build a new venture, the SelfCare Catalog, into a $50 million business that played a pivotal role in popularizing the then-revolutionary notion that consumers can take charge of their own health. She later was hired by Patagonia, a company widely admired for its corporate philanthropy, where she took over the outdoor retailer’s direct marketing division. Griswold is now in private consulting. One of her first clients was Jockey International, and one of her first moves was to have the company print its catalog on recycled paper.
“Change is in the little things,” she says.
When she talks to M.B.A. students, she tells them a career “is not a streetcar.” “You don’t have to stop at every stop,” she says. “And you don’t have to pick up everybody on every corner. You can say, ‘No, I want to work for companies that do good in the world, and I want to personally do good.”
Crystal Su co-chairs GSM’s Community Consulting Group, which has helped organizations like PRIDE Industries and the Bread Project serve the needy in countless ways. (Photo: Karin Higgins/UC Davis)
Management schools are now preparing themselves for the so-called Millennial Generation, a much-written-about group born between the early 1980s and early 2000s.
“They are the most socially conscious group in a long time,” says Daphne Atkinson, vice president of industry relations for the Graduate Management Admission Council. “They see themselves as instruments of change. They are purposeful idealists, with a practical activism. It’s not, ‘We’re going to try to change the entire world.’ It’s: ‘There is a thing here that I see needs addressing. How can we address it in a focused way?’”
According to demographers, the millennials, in comparison with other generations, want real responsibility right away, care less about having a prestigious company name on their résumé than about being challenged and expect a healthy work-life balance.
Millennial Crystal Su, 26, co-chairs GSM’s Community Consulting Group, which supplies nonprofit organizations with free consulting help. Over the years, the group has helped PRIDE Industries, one of the nation’s largest employers of people with disabilities; the Bread Project, an Oakland-based organization that trains low-income and unemployed people in the skills needed for entry-level commercial baking and cooking positions; and California FairPlay, which helps underprivileged Sacramento-area schoolchildren cope with their asthma.
Su, who earned her undergraduate degree in English and history from Rice University in Houston, long planned to be a lawyer. “But I decided that business is where a lot of things can get done very quickly and very efficiently,” she says. “Our program is socially conscious. A lot of us are interested in more than crunching numbers. We want to learn how to leverage the power of business to make a social impact.”
Su’s goal is to start her own small business after graduation and gain the skills and experience she needs for her ultimate career goal: a management position in a nonprofit.
On a beautiful morning last spring, the GSM community and invited guests from across the campus gathered in the school’s grassy courtyard to celebrate the Davis Net Impact club’s November 2006 award as “Small Program Chapter of the Year.” Net Impact has 140 chapters on six continents in 80 cities, with a mission to make “a positive impact on society by growing and strengthening a community of new leaders who use business to improve the world,” according to the organization’s Web site.
Dressed in shorts and T-shirts, not a power suit in sight, the future M.B.A.s ate sandwiches and fruit from 100-percent recyclable paper plates and biodegradable forks. Composting receptacles set up in the courtyard collected leftover food.
Biggart took the microphone to congratulate them.
“As dean,” she said, “I am often confronted with misperceptions about M.B.A. students. A lot of people think we are producing smart but greedy people who are all out for personal gain. They see us as a place where sharks come to get their fangs sharpened.
“But you are the reality: Our M.B.A.s are very thoughtful, globally aware and committed to using their skills in finance, marketing, accounting and organizing to improve their communities and the world.”
Davis Net Impact — 53 percent of GSM students belong to it — went on to win “Trailblazer Chapter of the Year” in 2007, an award bestowed on the chapter that “has created the most positive impact at the campus and community level.”
Last year, Ted Howes left his job as vice president for corporate social responsibility and supply chain programs at Scientific Certification Systems, the Emeryville-based firm that helped to develop, and now audits, Starbuck’s C.A.F.E. Practices program. His new job is at IDEO, a global innovation and design firm, where he leads efforts to integrate business practices and sustainability.
“Every day,” he says, “I help companies understand that sustainability is good for their business.”
Howes’ desk at IDEO is among dozens of others in a cavernous space the size of a small airplane hangar, squeezed into a side street in Palo Alto’s old downtown. The space is peopled with gnomes. Bicycles hang from the ceiling. A Volkswagon Vanagon, its sliding doors open, is parked at one end, serving as a conference room (with a sun deck and umbrella on the roof). On a typical workday, music is blaring. Employees are throwing darts.
The energy sector is among Howes’ first targets. One opportunity: Electronic devices that draw electricity even when they’re turned off. In aggregate, such devices consume the equivalent of the output of three nuclear power plants each year. Although technologies exist that can reduce this waste, consumers are not clamoring for them. Yet.
“IDEO excels at understanding latent consumer needs to help support positive behavioral change,” Howes says. “We’re going to figure out how to make energy efficiency sexy.”
When he was an undergraduate in Chinese history, Howes says business never interested him. “Now,” he says, “I see it as the most powerful way to have an impact in the world.”
He couldn’t sound less like Gordon Gekko.
Claudia Morain writes about business, law, education and the humanities for the UC Davis News Service.