Why business education must equip students for an era of transition.
A Martian looking down on earth from his spaceship might this year have sent the following report back to the red planet: “Earth will be ready for occupation round about 2050. The behaviour patterns of the dominant species, Homo Economicus, are resulting in the rapid erosion of conditions conducive to its own survival. Homo Economicus is a highly evolved form of Homo Sapiens and has developed a predominantly consumption-based society that measures success primarily in terms of a primitive notion called gross domestic product. With this focus, they have mastered technology and relentless extractive processes and enabled their numbers to grow to 6.8 billion. They are on track to peak at some nine billion by 2030. By that time, runaway climate change will be in full swing. Over the following 30 years, we anticipate an unstoppable collapse in their numbers.”
Our Martian’s report continued: “By 2050 the remnant hominid population – estimated at a few million – will be unable to counter our colonisation fleets.” But our Martian, in an addendum, noted the following: “A cause for concern remains their capacity for rapid change and there is a risk that a superior species that is already growing in numbers may come to dominate. This group we have named Homo Integralis because of its capacity to operate at higher levels of integrated understanding.”
What our Martian friend was observing is the logical outcome of our paradigm of business, which could take our ecosystem to the point of collapse within a generation.
That also suggests our economic system and business systems will fail within the working life of an MBA student.
This is a reality that is not at the core of business education. It should be.
‘The Great Transition’
Our business schools should be teaching their students that we are at the start of an era we might term ‘the Great Transition’. This is not a post-capitalist system. It is the existing market economy harnessed to give the right signals and to do the right things.
The role of business leaders is not only to operate within the system, but to co-design the rules of the new system for the benefit of their businesses and society.
A starting point of the great transition is a low-carbon future for everything. MBA students should be taught that a career in oil or coal sets them up, at best, to be a pariah and, at worst, for a career in industries with no future.
Students are not being confronted with the prospect that the shift to a low-carbon economy will render many of the greatest corporations extinct. Successful businesses rarely fail because they stop doing things they have done well; they fail because the world moves fast and they do not.
Business schools are not preparing students for a mass-mobilisation akin to that of the Second World War – and that is what is now required, according to climate scientists such as Jim Hansen, the head of NASA’s Goddard Institute.
The dominant paradigm in business schools assumes that business is primarily about incremental change in a manageably evolving system. It does not recognise that a major transition is under way in which lower carbon usage is just one element. Homo Integralis is, for example, working out what Homo Economicus forgot in his endless pursuit of GDP – that, as the Australian intellectual Paul Gilding says, “shopping does not make you happy”. Business schools similarly fail to teach students that they are in an era where the fundamental social contract between business and society is up for review.
The probability that we will eventually do the right thing is high, because, as Gilding puts it: “We are slow, but we aren’t stupid.” But all of us, business schools and MBA students included, have a lot to learn.
Mark Drewell is vice-chairman of the Brussels-based Globally Responsible Leadership Initiative, a coalition of 62 business schools and companies.
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