Business schools teach their students that rigorous self analysis is critical to success. Today’s business school students who don’t identify and correct what they are doing wrong are tomorrow’s chief executives making the same mistakes with a large company.
Those of us who run business schools have to live by what we teach.
At Harvard Business School, where I am dean, we have been engaged in our own self reflection — namely whether the curriculum we teach is adequately preparing students to meet society’s changing expectations of business.
The fact is, the world is demanding a new type of business leader — one who is good for the bottom line, but also for the world.
One who is pragmat i c , open-minded and adaptable, yet who is deeply committed to values and ethics. Above all, we increasingly demand business leaders who earn our trust. Business schools — including HBS — must teach students how to be trustworthy.
We must make it a centre piece of our curriculum. We should prioritise trustworthiness, because ultimately, that is how we will make a real contribution to society.
Right now, business schools, and even corporations, risk resting on their laurels.
The most recent Edelman Trust Barometer provides an annual indicator of the trust people place in business and its leaders.
The global data show that trust in businesses far exceeds that of trust in government or media, and that trust in business has been rising in most of the world, though it remains higher in developing countries such as China and India than in the US.
To be clear, rising trust in business is a good thing. Around the world, governments are constrained by lack of political consensus and strained fiscal resources.
In many regions, businesses are being called upon to serve vital public needs — marshalling disaster relief, devising lower- cost solutions for systemic healthcare challenges, creating improvements in education, or developing innovative ways to combat climate change.
Increasing trust in business can only help these efforts. When business is trusted, it enjoys a licence to operate that reduces friction and transaction costs.
When distrust is high, it invites restraints and regulations that can over-reach.
Yet I am concerned that trust in chief executives and corporations is cresting and, if businesses do not change course, it will come crashing down.
Consider the recent business headlines from around the world: Tech companies face condemnation for failing to protect users’ data and leaving their platforms vulnerable to manipulation.
Some go so far as to call tech companies a threat to democracy Large banks and consulting firms face criticism for poorly conceived relationships with authoritarian and corrupt governments.
Several globally admired CEOS are facing serious allegations of misconduct — from sexual harassment to underreporting pay Trust is inherently fragile.
Historically, headlines such as these take a toll on trust in business.
As the training ground for future business leaders, it is up to business schools to make trustworthiness a priority.
So what can we do in our classrooms to increase the odds our students will make decisions that enhance, rather than diminish, public trust?
Lately the faculty at HBS have been debating this question — resulting in the decision to reimagine our required, full- year leadership and corporate accountability course for MBA students, which was initially conceived after the collapse of Enron.
Today, we teach students to look at every decision through the triple lens of their economic, legal and ethical responsibilities.
Beginning in 2020, the curriculum will go further by asking students to consider what proactive, positive things they should be doing to solve some of society’s most vexing problems.
Students will be challenged to engage with questions such as: how can business leaders take on climate change, or the future of work in an age of artificial intelligence?
How should technology companies use the tremendous amounts of data and power they have amassed? Can leaders act alone on these social causes, or should they mobilise some form of collective action?
The public now expects business leaders to routinely ask, and answer, such questions.
According to trust barometer data, 76 per cent of the public says CEOS should take the lead on issues such as the environment, protecting personal data, promoting equal pay, and preventing discrimination and sexual harassment — an 11-point increase over a year ago.
These rising expectations of business leaders are one reason for the excitement generated by Starbucks’ founder Howard Schultz entering the US presidential race.
I do not believe the public is asking too much by requesting that business leaders take the lead on these critical issues.
Just as importantly, I believe that only by taking the lead on such issues will business leaders be able to maintain, or even expand, the level of trust they enjoy.
People tend to evaluate business schools by the rise or fall in rankings or applications each year.
I encourage us all to think broader and look further into the future.
The more meaningful metric, the more compelling question, is whether we are moulding leaders who deserve the world’s trust.
