Issue link: http://www.e-digitaleditions.com/i/57462
The path to value creation and new markets is through values-driven, responsibility-based management. Charles Handy, co-founder of the London Business School, just finished teaching a short course at our school called "The Odyssey." His objective was to help some of our executive education students reconcile their values with their ambitions through a process of self-discovery that includes photographs, personal artifacts, and personal narratives. Handy told these students that they cannot manage and motivate others until they can properly align their own values and ambitions—until they can properly manage and motivate themselves. That's a premise that I believe underlies the art and science of man- agement. In this knowledge-driven world, where innovation and value creation are necessities, business school graduates must be not only analytical, but creative, reflective, intuitive, and passionate. They must not only pursue success, but also aspire to significance. Innovation in Action If business educators want to learn more about how business helps society function and prosper, while vigorously producing growth, they need only look at what's happen- ing in business itself. For instance, Procter & Gamble's CEO, A.G. Lafley, believes that for his company to continue to grow, it must become involved in creating stronger econo- mies everywhere in the world and be driven by constant innovation. That's why, when Lafley looked at the 7,500 designers and engineers who worked at the company and at the 1.5 million designers in the rest of the world, he realized that the company was tapping only a tiny fraction of the world's creative talent. As a result, he committed 50 percent of P&G's product innovation budget externally. Edward Jones, consistently ranked one of the best places for employees, is also one of the highest performing firms in the world and BusinessWeek's No. 1 financial services company. Costco's CEO is paid a fraction of what CEOs of other Fortune 500 companies make, out of respect to its employees, and pays a great deal of attention to customer service. Companies like Google, Gore- Tex, and Patagonia are experimenting with new ways to unlock assets that are way off the balance sheet. In fact, if we were working for Google, we would have to spend one day each week doing something other than what it paid us to do. It provides employees the freedom and encour- agement to explore new directions, engage their creativity, or participate in community service. In the process, it instills a sense of employee loyalty that cannot be achieved through conventional approaches like pay increases and stock options. Case studies show that these com- panies are successful; in many cases, they are doing better than others in their peer groups. Their innovative outlooks and strategies drive that suc- cess. There is no "one-size-fits-all" strategy, but as we raise more ques- tions, I believe we'll find that firms that take social responsibility serious- ly—that don't view it as peripheral or fungible—will gain and sustain con- siderable competitive advantage over their counterparts in the industry. Innovation in Demand Even with these examples before us, I don't believe enough business faculty are tackling the big ques- tions and exercising the kind of intellectual courage that Drucker so forcefully advanced. There still exists a gap between what many business schools teach, and what students want to learn—and between what our students learn and what business wants them to know. It is essential that we close this gap—and quickly. Society's concerns about global warming, political con- flict, child labor, and environmental destruction are not likely to lessen. The watchful eyes of CNN and You- Tube are not going to disappear. The growing number of socially motivated companies want business graduates who know not only how to do net value calculations, but also how to unlock creativity in an organization. Our graduates will be part of a global economy where social responsibility isn't just about eco-friendliness and social awareness. It also demands inte- grative business skills. It calls for busi- ness schools to emphasize innovation and creativity, promote an understand- ing of broad ethical dimensions, and treat management as a liberal art. As a result of this new focus, man- agement education is entering a new era. Steadily, surely, we are creating new disciplines, embracing new con- cepts. With continued effort, enthu- siasm, and attention, business schools can close the responsibility gap and lead rather than follow. ■ z Ira Jackson is the dean of the Peter F. Drucker and Masatoshi Ito Graduate School of Man- agement at Claremont Graduate University in California. He is the co-author, with Jane Nelson, of Profits with Principles: Seven Strategies for Delivering Value with Values. BizEd JULY/AUGUST 2008 63