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June 24, 2021May 22, 2023

Why businesses must develop greater integrity

A white and brown dog propped up with his two front paws looking outside a window. Business Impact article on Why businesses must develop greater integrity.

Why businesses must develop greater integrity

There is a need for more integrity and a greater depth of character among leaders, says B-Corp Ambassador, Paul Hargreaves, pointing out that SMEs often get away with not doing the right thing because of their size

If you were described as an integrous person, you may wonder whether it was a compliment or not, but it simply means a person full of integrity. I heard the story of a man called James Doty, a neurosurgeon, entrepreneur and university professor, who early in his career was involved in developing the Cyberknife, an invention that netted him millions of dollars. At the turn of the millennium, he promised $30 million USD out of his $75 million USD net worth to charity – just before the dot-com crash of 2000 to 2001, which brought his wealth down to around the $30 million USD he had already pledged. Doty’s lawyers advised him that he could renege on his promise and get out of the pledge; surely people would understand the change of circumstances and he wouldn’t lose his standing in society. However, Doty was a man of his word and decided to do the right thing and go through with his promise, giving away the last of his fortune to charity.

In a much less costly example, at Cotswold Fayre, we announced in the spring of 2019 that we were going to become carbon neutral from August that year; this was based on some logistical change we had made to vastly reduce the carbon impact of our distribution network, meaning that the carbon offset figure for the carbon used in the distribution of our goods was attainable. The data came from our new logistics company, and either we misunderstood the data at the time or we were just given the wrong figures, but the amount we had to pay to sequester our carbon was considerably higher than what we had budgeted for within the business plan. However, there was never any doubt within our management team that we would go ahead and pay the higher amount, even though no one outside the company would know any different. Money doesn’t make decisions for us; doing what is right does.

These days, many companies want to link a social purpose to their products and make great claims about the percentage of their profits they are giving to social justice projects, such as charities working with street children in Brazil. They often push back when I challenge them and ask them how much they have contributed so far. Of course, many startup brands don’t make a profit for a few years, yet these brands’ products often carry such claims during this time. To my mind, this approach lacks integrity. Surely, it is far better for a young company to say that it will give 5p for each product sold, for example.

In many cases, SMEs can often get away with not doing the right thing because no one notices what small companies do. That is the great advantage of a certification process such as B Corp, where businesses must provide evidence of what they are doing and be analysed on how good they are for the world: both the people and the planet.

Doing the right thing when no one is watching

The Urban Dictionary definition of ‘integrity’ is based on a quote often attributed to [author of The Chronicles of Narnia] CS Lewis, but which might actually paraphrase a line by author, Charles W Marshall: ‘Integrity is doing the right thing when no one is watching.’ It is all too easy to trumpet a high moral standing on social media yet not follow through when the heat is turned up a little. I am concerned that occasionally even renowned ethical companies and their leaders sometimes present a better view to the outside world than what is really happening inside of their organisations. There is a need for more integrity and a greater depth of character among leaders.

People detest hypocrisy more than absolutely anything in a leader, and it has been the downfall of many political figures – as seen by the huge furore caused when the UK prime minister’s closest advisor broke his own rules with regards to the Covid-19 lockdown restrictions on at least two occasions. Imagine a stick of Blackpool rock that you can cut through at any point to reveal the word ‘Blackpool’. Would people see integrity running through us and our businesses if they were to figuratively cut through us at any point?

The wonderful message from the James Doty story is that even though he ‘lost’ personally, he still went through with his promises. For some of us, winning is too important and can come at the cost of all else. I know the appeal of this, as, like many entrepreneurs, I am very competitive and hate losing, and I have had to temper that competitive streak to maintain my integrity. The former tennis player, Andy Roddick, provides a great example of this. He was once awarded a match when a second serve from his opponent was deemed to be out. However, Roddick saw the ball’s mark in the clay himself and made the umpire reverse his call. Roddick went on to lose the match, but he maintained his integrity.

The danger of overpromising and underdelivering

So, how, do we develop our integrity? Well, probably the most important factor is silence. If we speak too hastily and make promises, we are in danger of overpromising and under-delivering. It is best not to speak hastily and to even learn to say ‘no’ on some occasions, where we may risk losing our integrity and disappointing customers, suppliers or, worst of all, team members. One of the most common reasons people leave employers is when they have been promised promotions, money or bonuses that haven’t been forthcoming.

In these instances, circumstances may well have changed – as they did for James Doty, to the tune of being $45 million USD poorer; but he stuck with his promises all the same. Incidentally, Doty claimed to be happier than he had ever been after he had given that money away, saying: ‘At that moment I realised that the only way that money can bring happiness is to give it away.’ Being integrous, or full of integrity, is not only the right thing to do, but we will almost certainly be more fulfilled and happier as a result.

Paul Hargreaves is a B-Corp Ambassador, and the Founder and CEO of food and beverage company, Cotswold Fayre. He is also the author of The Fourth Bottom Line: Flourishing in the new era of compassionate leadership (2021).

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June 22, 2021June 21, 2021

Shedding light on MBM admissions and delivery worldwide

Exclusive AMBA & BGA research throws light on the performance of MBM programmes on offer at leading Business Schools across the world. Ellen Buchan delves into the details

A major driver behind students’ enrolment on master’s in business management (MBM) programmes is the desire to develop a better understanding of technology and its impact on management practices. This was a standout finding of AMBA & BGA’s study of application and enrolment data for MBM programmes around the world last year, as reported in Business Impact in February 2020. The significant demand for MBMs in India was another result highlighted in this research.

A year on, and for the second iteration of this research, Business Impact was able to analyse data from Business Schools in relation to their MBM application and enrolment data from the calendar years of both 2018 and 2019. This offered a fresh opportunity to identify trends in the sector on a like-for-like basis.

A total of 46 Schools – all of which are accredited by BGA’s sister organisation, the Association of MBAs (AMBA) – submitted MBM data for both 2018 and 2019, and it is the data from those Schools on which the following research is based.

Continuing demand in India

Applications per Business School were up by 5% between 2018 and 2019 across all responding MBM programmes. There was no change in the volume of applications per programme received in the same timeframe.

The sheer scale of demand for MBMs in India continues, as applications received by programmes in the south Asian country represented 88% of all applications to MBMs in 2019, worldwide. Applications in India, meanwhile, grew 10% per programme and 5% per School between 2018 and 2019.

Elsewhere, Business Schools in the UK also reported a substantial increase, with applications up by 22% per programme and 34% per School between 2018 and 2019. Schools in the UK accounted for 3% of overall volume of MBM programme applications reported in 2019.

Between 2018 and 2019, there were also rises in the number of students enrolling globally, by 5% per programme and 10% per School. MBMs in the UK reported the world’s largest increase in enrolments, with a 10% increase per programme and a 21% increase in enrolments per School.

Blended learning on the rise

There was no significant change in the mode of delivery for MBM programmes between 2018 and 2019. Globally, the majority (83%) of AMBA-accredited Schools’ MBM programmes were taught in the classroom in 2019. Almost all of the remaining programmes were taught using a blended approach (16%) while 1% of programmes were delivered fully online in 2019. This represents a three-percentage point increase in the use of blended learning, at the expense of classroom delivery from 2018.

In North America and the Caribbean, 92% of programmes included in the study were delivered using a blended approach in 2019. Among MBMs in Europe, the equivalent figure was 24%. This represents a four-percentage point increase in the use of blended learning in both these regions from 2018.

Gender diversity in MBM programmes

Globally, the proportion of women among those applying to MBM programmes in 2019 was 37% – an increase of one percentage point on 2018. The global enrolment rate was far more gender-balanced – 47% of those enrolling globally in 2019 were female, although this same figure was also applicable in 2018. Looking regionally, however, shows that Business Schools in India and Europe were the only Schools to enrol a minority of women on their MBM courses in 2019. In Europe, 48% of those enrolling identified as female, while the proportion among Schools in India was 33% – significantly lower, but an increase of three percentage points on the country’s equivalent figure for 2018.

International and domestic applications and enrolments

More than nine out of 10 (95%) of applications to MBM programmes included in the study came from domestic students in 2019 – the vast majority. However, this global percentage hides significant variations between different countries and regions. Business Schools in India received 100% of applications from domestic students – pushing up the overall average. Even so, Schools based in China (including Hong Kong, China), Europe, and North America and the Caribbean, all received more than 80% of their MBM applications from domestic candidates. However, at Business Schools based in the UK and Oceania, the reverse was true, with 97% of applications to MBM programmes in each region coming from international applicants.

The global picture on MBM enrolment is quite different, with international students representing a third of all enrolments in 2019, up from 30% in 2018. As such, the conversion rate for international students was far higher in some regions than for domestic students. In Europe (excluding the UK), for example, international candidates represented 16% of applications, but 28% of those who enrolled. In North America and Caribbean, 10% of applications came from international applicants, but 19% of students enrolling were defined as international.

Conclusion

The news is positive for providers of MBMs from within the AMBA network. Although there was no growth in applications per programme, there was a notable rise of 5% in enrolments per programme.

In addition, applications and enrolments to a Business School’s full portfolio of eligible degrees were up by 5% and 10%, respectively – a sign perhaps of the increasing number of study options on offer to prospective students and the extent to which these resonated with their intended audience, ahead of the turbulence of the year 2020.

Methodology

The AMBA & BGA Application and Enrolment Report 2020 outlines the current status of the MBA market. As part of the data compiled for the report, 58 AMBA-accredited Business Schools also provided data on their portfolio of master’s in business management programmes (commonly known as MBMs or MiMs).

Of the 58 Schools that provided data on their master’s programmes in 2019, 46 had also supplied data for 2018 in the previous year, allowing for a year-on-year comparison between the same Schools. This analysis covered 140 programmes in 2019, rising from 133 programmes in 2018. MBM programmes in this like-for-like analysis were delivered at Business Schools based in the following locations: Europe (excluding the UK) (37%); the UK (28%); India (17%); China (including Hong Kong, China) (7%); North America and the Caribbean (4%); Oceania (4%); and Africa (2%). No data was collected from Schools in Asia (excluding India and China) and the Middle East.

This article is adapted from an original feature in Business Impact’s print magazine (edition: February-April 2021).

June 21, 2021June 28, 2023

The importance of purpose-led behaviour in tackling climate change

Archaic perceptions of climate change are dwindling and now is the time for leaders to role model purpose-led behaviour and lift the curtain on bad practices, says Chris Bowden, HBS graduate and the Founder of a B2B marketplace for clean energy

For c-suite executives, environmental, social and governance (ESG) issues have traditionally played second fiddle. Some have been hamstrung by board members and shareholders, who can often be blinkered by the lure of short-term results or bound to the archaic belief that companies which focus on ESG issues experience a drag on value creation. Concerningly, PwC’s 2020 Annual Corporate Directors Survey found that only 38% of board members think ESG issues have a financial impact on a company.

This negative perception of the climate agenda has resulted in many c-suite executives making unrealistic, unconsidered, and empty pledges; pledges that will still need to be met long after they have left the company. However, creating a poisoned chalice for future leaders is neither helpful nor ethical.

CEOs see opportunity in the ESG agenda

Fortunately, refusing to accept the greatest challenge of our time, climate change, has shrunk considerably among c-suite executives and sustainability is now firmly on the boardroom agenda.

While some businesses spent the past decade committing minimum resources to token programmes, curating outlandish claims of commitment, and for a questionable few, thinking they could buy their way to a greener world, a handful of clever companies already had the wheels in motion. It was these companies who had stopped experimenting and instead prioritised the development of much needed sustainable products.

At the turn of the millennium, the idea of an electric-only carmaker seemed like an eccentric fallacy, not just to consumers but to every other auto-manufacturer too. Tesla, however, was smart and, most importantly, it understood that the transition to a low-carbon economy was inescapable. Tesla understood that although EVs look the same as petrol cars from the outside and perform a similar function for consumers, they are completely different on the inside and require the fusion of software, electronics and manufacturing. They developed a product to meet the needs of social expectations, regulatory demands, investment and technology trends, while other industry titans put on their blinkers, kept their heads down and plugged on, business as usual. It was a dangerous strategy and one that’s left an entire industry desperately playing catch-up.

In more recent years, CEOs across all industry sectors have awoken to the power of ESG strategies in building resilience and securing commercial success. By way of example, a recent PwC survey showed that more than 50% of UK CEOs plan to increase their investment in sustainability and, according to a new report called Taking Stock: A global assessment of net zero targets, at least one fifth (21%) of the world’s 2,000 largest public companies have committed to meet net zero targets. Together, these companies represent sales of nearly $14 trillion USD. This is a victory of many years in the making.

So, what is the catalyst behind this shift? Study upon study has noted that today’s consumers will spend their money with brands that align with their moral beliefs and have no hesitation in snubbing companies which they believe are not pulling their weight. As I type this, Spotify tells me it has collaborated with O2 to launch the first sustainable audio campaign as part of the mobile operator’s commitment to be net zero by 2025. Spotify and O2 are to invest together in nature-based solutions to offset all carbon emissions from O2’s audio activity on its platform for the next 12 months. It’s a welcome reminder that change is afoot.

Employees have an important hand at the table, too; pushing the companies they work for to follow a moral imperative and punishing those which fail to speak out by taking their talent elsewhere.

The reality is that if you have waited for someone to tell you to prepare for climate change, you’re putting your business at risk. This is not only evident in the growing maturity of the ESG movement in capital markets and financial services but also with the improvement in the returns on stock for companies with higher ESG ratings. There is much potential in climate risk mitigation, but it requires a shift in perspective from being triggered by fear to planning for opportunity, and that is no mean feat.

The CEO as the role model for purpose-led behaviours

In the UK, a flood of government legislation has provided more certainty, more focus and more precedent. Sustainability professionals have long banged the drum for climate change with little audience. But there is no time left to explain the need to act to the naysayers, and no amount of peer-reviewed research will help either. Business leaders have been called up to join the cavalry and it is down to the CEO to lead the charge. They need to not only make it a priority, but then need to make it the norm.

Purpose-led behaviours are key to this transition and the unique position of the CEO can make this happen. It is this individual who can raise the ambition of its employees, reflect honestly on challenges and shortfalls, as well as to set a definition of responsible leadership. These purpose-led behaviours will then trickle down through middle management. After all, these are not only the people who split budget, develop products, and lead teams, but they are also our future leaders who will carry this weight of responsibility far beyond our days.

Disruptor brands have already proven the return on initiating such leadership. Scottish brewery, BrewDog, and New Zealand-American footwear company, Allbirds, for example, were cited as inspiring organisations that have used product and services to create a deeper and meaningful connection to the planet and communities, in a recent report by media company, edie, in association with UK energy supplier, Centrica.

Perhaps the biggest challenge facing CEOs is the need to dig deep to unearth bad practices, seek clarity on myths and ensure any claims they make are indeed true to what they say they are. Only when the CEO holds up a mirror to see its true reflection will this important practice become the norm in all levels of a business.

Unfortunately, bad practices are not uncommon in the supply chain and that includes the renewable energy market. Some suppliers in the UK, for example, source energy from fossil fuels and then buy REGOS (Renewable Energy Guarantees of Origin) or even worse, European GOs (Guarantees of Origin) and then package this up as ‘renewable energy’ for their clients. Imagine claiming that your company has committed to green energy, publicised this to your employees and customers in the media, only to find that you’re buying fossil fuel energy. This is just one of the many bad practices we need to lift the curtain on.

Decades of tiptoeing around, ignoring the unequivocal science and embracing the type of box-ticking culture that encourages only standardised ESG issues has left everyone scrambling to avoid the irreversible impact of climate change.

Unless green-thinking, purpose-led behaviours and action runs through the veins of businesses, we will fail to prevent the catastrophic impact of climate change. This is not the time to experiment, this is the time to act. Titans of business may exist as a small collective, but remember, positive change has always been driven by the movement of the minority.

Chris Bowden is the Founder of Squeaky, a B2B marketplace for clean energy. He holds an MBA from Harvard Business School and has also attended Singularity University, the Business School at City, University of London, and the University of Manchester.

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