Business school graduates seek opportunities within corporations to flex their ‘business and society’ strength, but firms aren’t ready.
In ironed gowns, pressed hoods, and cap tassels tossing in the wind, some 150,000 students will cross stages all around the country this summer to accept one of the world’s most popular diplomas: a Master’s in Business Administration. But for all the pomp and circumstance, these celebratory occasions disguise a surprising statistic: 42% of these MBAs will graduate without a job, according to BusinessWeek – many of them holding out for post-MBA opportunities in the social sector.
Socially-minded MBAs are in pursuit of jobs at corporations that use their core business know-how to tackle the most pressing social issues of today. According to Harvard Business School Professors Robert G. Eccles’ and George Serafeim’s research, companies do see a corollary increase in shareholder value when a firm’s performance improves on environmental, social, and governance (ESG) dimensions, but only when firms approach ESG commitments with resources for innovation and a strategy. This is where MBAs come in. Yet, skeptics believe that business education must be reformed to prepare future business leaders develop the requisite skills sets to think opportunistically about the transformative role business can have on society, while also seeking profits. However, I believe the issue is not about training, but rather the lack of socially impactful jobs in corporate settings directly out of business school.
In fact, business school curricula have increased their focus on social impact, training students to understand the greater social needs that business can meet beyond profit. Yale School of Management (SOM), for example, has a mandatory ‘State and Society’ course as part of its integrated curriculum, recognizing the need to think about business in the context of a larger ecosystem, including social needs. Increasingly, business school courses that go beyond negative screens of things not to do, but rather look for opportunities to use business as a powerful tool to improve society. Yale SOM, along with other business programs at Michigan Ross, Penn Wharton, and elsewhere charge students with using their business acumen to help real social enterprises in the developing world through consulting projects. These courses teach students how to think and operate in a complex environment – where companies are being increasingly looked to for solving social problems. Programs are shaping future business leaders to be conversant in both business and social sectors.
There has also been an increasing shift in the MBA mindset toward working in the social sector. Previously, the standard paradigm was to work in corporate and then transition to meaningful work after “earning your stripes” in traditional business. However, this paradigm is changing, where graduates no longer want to wait to do meaningful work. They want to get their hands dirty and utilize their business acumen to tackle some of the largest societal problems of today – poverty, water management, environmental sustainability, and economic development to name a few. Net Impact recently released the Business as UNusual Report noting that 70% of over 3,300 graduates students surveyed believe that finding an impact job is a top priority; and 77% would even be willing to take a 15% pay cut to have a job that seeks to make a social and environmental difference.
A new hybrid talent pool is emerging that seeks to use business principles to also affect social change. The challenge for MBAs now is where to find these jobs and what to do with these skillsets. Yet these opportunities right out of business school are elusive. Most MBA recruiting is done for traditional roles including strategy consulting, investment banking, marketing, and technology on set timelines. Social sector opportunities, on the other hand, require patience as hiring is done just-in-time. However, for MBAs that want to work in corporate settings tackling social problems, the roles are few and far between after school.
Corporations have a real missed opportunity to leverage this hybrid talent pool and develop a workforce fluent in both private and social sectors. To be successful, corporations can firstly, create the space. Corporations can provide employees opportunities to engage in social impact activities. Google’s infamous ‘80/20’ working mantra, encouraging employees to work 20% of their time on projects of their interest outside of their assigned role, can also be applied to social impact activities. Some firms, such as Dow’s Sustainability Corps, Pfizer Global Health Fellows, and others have fellowship programs that select employees to use their core business skills to serve non-profit organizations for a set time period; a trend that has grown in the past 5 years.
Secondly, companies should make it count.As companies create the space, they should also reward employees that participate. Some companies tie a portion of its bonus structure to a business units’ ability to achieve its socially-related goals. Others create skills-based volunteer initiatives tied to leadership development efforts, providing employees with the opportunity to work on an impactful end-to-end project from strategy to implementation. The impact of these initiatives can also be monitored and measured –for the non-profit, the employee and the firm – resulting in potential increased engagement and higher promotion rates for employees as well as improvements for the non-profit. Organizations such as Common Impact (non-profit consultancy that connects business professionals to nonprofits), Acumen (non-profit that uses philanthropic capital to invest in social enterprises in the developing world), and TechnoServe (non-profit that uses business solutions to alleviate poverty) all serve as intermediaries to help structure these strategic partnerships and make them count for both the firm and the social enterprise.
Lastly, corporations need to bring it home. In order for these initiatives to lead to financial return, and thus make a continued business case for these social impact efforts, how can corporations harness experimentation and learning in the social sector back to the core business? Increasingly, corporations experimenting with integrating social initiatives and business opportunities endeavor to develop structures to connect employee experiences back to the core business. GSK PULSE, its skill-based volunteerism program, created PULSE Lab to capture and elevate company-related ideas and innovations that came out of these efforts. Through structured stage-gates where peer participants and GSK business unit leadership evaluate these innovations, ideas are narrowed until the most popular and feasible ideas percolate to the top – and are executed on by leadership and the idea-generators. GE is also widely touted for its ability to spur reverse innovation.
As MBAs hone their skills using business to also affect social change, corporations would do well to recognize the changing nature of the talent pool they are recruiting. Incoming business school graduates deeply care about the social ills of today and have the know-how to experiment in finding solutions to these problems, all using business principles and discipline as their guide. It is no longer a nice-to-have, but a business imperative – and a fight to the recruit and retain the best employees.
As MBA caps and gowns are retired to the recesses of closets nationwide, let this regalia increasingly symbolizes the achievement of a goal to do social good using business means – made possible as corporations consider their business holistically with an eye toward engaging this incoming talent pool with an eye toward both profit and social change.
Corporate world – here come the Class of 2014 socially-minded MBAs – are you ready for us?
Nate Wong is a recent Masters of Business Administration graduate from Yale School of Management and a Manager is Deloitte’s Social Impact Practice. For more about Nate visit our contributors page.