Fertile Ground in Executive Education

When executives hear the word ''environment,'' they tend to think ''burden,'' but one executive-education program hopes to prove that sustainable b...
Lisa YoonSeptember 17, 2004

At the University of Virginia, the Darden Graduate School of Business Administration has developed a rare hybrid: an executive-education program on sustainability, combining corporate concerns with environmental interests. But at first, this program seemed much like a delicate flower that might die on the vine.

“Sustainability and Beyond: Business Leadership Through Innovation and Design” is one of the few open-enrollment executive-education programs that specifically address business and the environment. At most schools, such as Stanford’s Graduate School of Business, the environment is addressed under the rubrics of strategy or leadership.

Stanford also covers it as part of “nonmarket” issues such as ethics, according to Gale Bitter, associate dean of executive education. “The environment is a cost issue, it has ethical implications — it’s part of the balanced scorecard,” she explains. “Firms are understanding that they don’t exist in a vacuum; they can’t just think about shareholder value and profits.” Nor can environmental issues be considered in isolation, adds Bitter; “they affect costs, reputation, many different areas.”

Part of a larger picture: That’s more or less how environmental concerns are treated within the executive education divisions of many other top business schools. “We don’t have any specific programs [on the environment],” says Charles Breckling, marketing director of executive education at Harvard Business School, “but the issues get covered as part of ethics and from a strategy standpoint.” Ethan Hanabury, associate dean of executive education at Columbia Business School, notes that many companies and nonprofits that specialize in sustainable business are enrolling in more-general management courses, but Columbia offers no programs that address the subject exclusively. That’s also the story at Dartmouth’s Amos Tuck School of Business Administration, though executive director Clark Callahan points out an initiative on green ventures through the school’s Center for Private Equity and Entrepreneurship, which investigates opportunities for investing in new ventures “at the intersection of business and the environment.”

This dearth of programs might be explained by the way most executive-education divisions are run — they tend to be regarded by many business schools as revenue-generating opportunities at least as much as forums for education. It’s telling, for example, that most exec-ed administrators refer to program participants as “clients” rather than “students.” Determining which programs to offer executives is largely based on market demand as well as on faculty expertise.

The demand just hasn’t been there. One reason, surely, is that when executives are focused on the short-term demands of the market, the business practices and decisions that affect longer-term environmental considerations can fall by the wayside. Prof. Michael Porter of Harvard Business School observed this very mindset in his preface to the World Resources Institute’s 2002 report “Tomorrow’s Markets: Global Trends and Their Implications for Business.” Wrote Porter: “Business leaders have a tendency to see ‘social’ concerns as having little relevance to competing. Instead, these fall under the headings of corporate citizenship or corporate philanthropy, or are left to managers to address as matters of individual conscience.”

Another reason is on the gut level, says Prof. Andrea Larson of Darden. When executives hear the word “environment,” observes Larson, they tend to think “clients, costs, liability, lawsuits, regulatory issues, and overhead expense” — in a word, “burden.”

Darden, like most schools, takes into account several factors when selecting its lineup of program offerings — demand, course popularity, current events, and faculty research. For “Sustainability and Beyond” the school’s administrators gave added weight to their own gut instincts, says Lou Centini, Darden’s program director for executive education. Maintains Centini, “We believe this will be a huge issue for companies in the future.”

But in 2003 — when Darden’s executive-education division teamed up with Virginia’s environmental engineering school and with Bill McDonough, a former dean of the university’s School of Architecture, for the program’s would-be debut — so few executives enrolled that “Sustainability and Beyond” was cancelled. The slumping economy made that a bad year for executive education overall, notes Larson, one of the program’s faculty leaders, and hers was not the only exec-ed offering cancelled due to low enrollment. Larson and the program’s other faculty leader, Prof. Richard Brownlee, persevered in their efforts, however, and when the program was finally launched this past summer, 25 executives participated.

“Sustainability and Beyond” is not a course for tree huggers. The five-day program covers such issues as corporate accountability, innovation and entrepreneurship, product and facilities design, financial measures and metrics, leadership, and implementation. Brownlee — a finance specialist whose part in the program focuses on life-cycle analyses, techniques, and tools — is attracted to “the notion of top-line growth because of great products and happy customers. The opportunities [for an organization’s finance organization] are incredible.”

That’s why, he maintains, that if anyone in a company should be thinking about environmental issues, “it’s the CFO.” Adds Brownlee, “There are enormous financial implications,” such as cost reduction and competition. And at a time when finance executives are breaking free of their bean-counter image, the professor believes that sustainable business is an area in which they “can use finance as a tool to add value.”

Perhaps — but most finance executives seem to be using this tool elsewhere. “We haven’t had any requests for programs on the environment specifically,” says John Gallagher, the managing director of Duke Corporate Education, a provider of custom executive education and a wholly owned subsidiary of Duke University. “It’s covered under leadership or general management capabilities.” In fact, all the administrators we interviewed say that for their custom programs, environmental issues are subordinated within company requests for instruction on management and leadership, and that no one has requested a program on environmentally sustainable business.

Interestingly, many more schools are notable for their efforts at the MBA level to incorporate environmental issues into their programs, according to a report by the Aspen Institute and the World Resources Institute. “Beyond Grey Pinstripes 2003: Preparing MBAs for Social and Environmental Stewardship” lists all the schools cited in this article among the top 100 worldwide in their emphasis on the environment. Tuck (Dartmouth), Harvard, and Darden (Virginia) were noted as having “significant activity,” according to the website; Stanford was one of six schools “on the cutting edge of incorporating social and environmental stewardship into their MBA programs.”

Why is there so much attention given to the environment within MBA programs and so little within executive education? It’s difficult to pin down a reason for the disparity. Clark Callahan at Tuck “would put the question back to [executives]. I’d ask our clients why green issues don’t make the priority list.” He adds that he’d be interested in “putting together an executive education program in sustainable business.”

Cornell University may be going that one better. The school is developing a $5 million Center for Global Sustainable Enterprise, funded by the late Sam Johnson (as in S.C. Johnson & Co., and as in Cornell’s Johnson School of Business). Tom Hambury, the associate dean of Johnson’s executive-education division, is aiming for an executive MBA curriculum that will include “sustainable business in every course we teach.”

Sounds like a growth opportunity.

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