How can Business Schools develop leaders that embody the change needed in the business world?

What makes the difference between those of us that simply complain and those of us that endeavour to make things better, for people and the planet? David Lewis and Jules Goddard, co-authors of Mavericks, look at leadership characteristics and other important aspects for Business Schools to focus on

Let us start with two observations. First, almost every executive and management team with which we’ve ever worked has had no difficulty in articulating numerous frustrations about how their organisation is run; and equally no difficulty in expressing their great ideas about how it should be run. Second, when we have had the opportunity to return to these organisations a year later and ask the same question – ‘what are your frustrations and thwarted ambitions?’ – we are met with the same list we heard a year earlier. 

Stanford Graduate School of Business Professor, Jeffrey Pfeffer, refers to this as the ‘knowing-doing gap’ – most of us know that things should be and could be much better, but few of us do anything about it. The knowing-doing gap, coupled with the two observations above, provoked us to initiate a research project. Why? Because we also observed that while most of us simply moan about how bad things are, some of us actually do something about it. And the question we wanted to explore is, what differentiates those of us that recognise incompetence, inadequacy and lack of ambition, but do little about it, from those of us that dedicate our lives to making positive transformational change for the betterment of others?

Rik Vera is one such person. Rik started his career as a teacher, but after being made redundant because the school at which he taught was closed down, he started a career in carpet sales. In Rik’s own words, he saw sales as a competition: ‘How can I win against my competitors?’ 

The classic model of business competition. Then he was asked to take over and run the carpet manufacturing plant. On the first day, when he walked into the factory and saw the inefficiencies, the pollution and the inhumane working conditions, Rik was shocked. 

As a result of being asked to run the factory – the place where the product is made – his mindset changed from seeing the point of business as to win, to the point of business as being to create ‘a better world for people and planet’. This became Rik’s life philosophy. He asked a new and different question – instead of the question being, ‘how can I win?’, Rik asked himself, ‘how can I make carpets in a sustainable way in terms of the planet, the use of resources, and the way in which we work?’ 

In research, published in our book, Mavericks, we interviewed more than 30 people like Rik – people from all walks of life and from across the world, to discover what it takes to persist and succeed in making the world a better place.

Making better use of brains and technology 

There are no shortage of challenges that need our attention to make the world a better place: the World Bank has estimated that nearly half the world’s population live on less than $5.50 USD a day; 2.8 million adults die each year as a result of being overweight or obese, according to the World Health Organization; and in a period of unprecedented wealth creation, prison populations have doubled, trebled and, in some countries, quintupled. We could go on. Yet, more than at any time in our history, we have the resources, the ingenuity and the technology to enable everyone to live a fulfilling and flourishing life. The question is, where are these resources and why are they not being fully deployed for the benefit of us all? Where are our best brains? Who owns the latest technology? To what extent is our human ingenuity, creativity and innovation being used? 

The answer is that the best brains are your brains, the best technology resides in your organisations. The question is how we can make better use of our brains and technology to make the world a better place. 

This is not a question to be outsourced to a supplier, the government, or shareholders… or whoever else you want to make responsible; it is a question for you. So, what are you doing to make best use of those resources? And the question we want to explore here is how can Business Schools help people to make best use of those resources and create more worthy value? 

Business Schools have traditionally taken an accountancy view of what we mean by ‘value’ and ‘cost’. The problem is accountancy does not take into ‘account’ many of the costs involved in creating value – the unintended negative value created for one group in pursuit of creating value for another, referred to by economists as externalities. Externalities are unpriced effects that arise from the production and sale of goods and services. Air pollution from vehicles, aircraft and container ships, is one example. The cost of this is not paid for by either the producers or the consumers of specific products and services, but is paid for by the rest of society, in the form of ill health and treatment for example. We are all made worse off by pollution, but are not compensated by the market for this damage. 

This is one of the main reasons why, in democracies at least, governments intervene to attempt to rebalance using, for example, carbon offsetting programmes, regulations around the percentage of components in production that must be recyclable, and so on. But while this intervention from government is helpful, if not critical to safeguard people and planet, what if businesses and Business Schools took on more responsibility for this rebalancing? What would this mean for Business School curricula? What would it mean for the kind of leadership executive programmes should promote?

Here are some thoughts that we believe could radically transform Business School curricula and create the leaders we need to create the world we all want to see and live in.  

What is ‘good’?

A few years ago, we were struck by the absence of philosophical thinking in shaping and informing our modern-day management and organisational practice. We had this image of a two-legged stool, an unbalanced situation – something was missing. As we thought about it, we realised our organisational thinking is derived from two very impressive bodies of knowledge: economics and psychology. Economics asks the question, ‘how can we make efficient use of scarce resources?’ Psychology asks the question, ‘how can we get other people to do what we want them to do?’ But neither of these two great disciplines contain an ethical point of view at their heart. This is what is missing.

You only have to think of some of the language used. Economics refers to people as factors of production, just like land and capital. And the human resources department? They refer to you and me as human resources. Management speak is punctuated with the words ‘buy-in’, ‘engagement’ and ‘motivation’. What does this mean? It means buying into what I think is right; it means being motivated to do what I want you to do, and it means being engaged with my agenda.

Economics and psychology have worked miracles. To take just one example, 500 million people have been lifted out of poverty in 30 years in China through capitalism, or ‘socialism with Chinese characteristics’. We have the wonders of the internet, space travel and the robotic lawnmower. Yet in the west, in Asia and increasingly in Africa, as we become better off, we are left with the question, ‘how do we know if what we are doing is good?’ How do we know what is ethical? These are philosophical questions.

Philosophy is the discipline that asks the questions, ‘what is ‘good’?’ ‘what is the right thing to do?‘ and ‘what is the right way to do it?’ Philosophy is the third leg of the two-legged stool that can balance the incredible power of economics and psychology by asking the critical question, ‘what is the ethical dimension of business?’

In our 2019 book, What Philosophy Can Teach You About Being a Better Leader, we use philosophical thinking to challenge standard management practice and ask, ‘what do we mean by organisational values?’ ‘what do we mean by empowerment?’ ‘what do we mean by authority?’ and ‘how do we approach communication and change management?’ These are questions that should be at the centre of executive education in Business Schools – not because there is a clear formulaic answer that we can teach, but because these are the questions that define the paradoxes and dilemmas of leadership. 

How do you decide between options, all of which are part good and part bad, depending on the stakeholder perspective you take and how do you resolve conflicting values? 

The classic Business School approach is to insist on developing organisational values. And yet when you look at almost all organisations’ values, you’re struck by two things. One, they look exactly the same, and two, they seem to have been distilled into five statements, sometimes four, sometimes six. This is an impoverished view of values. There are many values that all of us hold dear, but we know that our values alone do not give us the answer, they generate the question. How do you reconcile the need for transparency with the need for confidentiality? How do you reconcile the need to be honest and the need to be sensitive? How do we square the circle? 

There is no prescriptive answer, there is no set of rules. It is a moral dilemma. It must be addressed in each instance in dialogue and conversation. It requires judgement and an answer to the question, ‘how do I decide between two competing goods?’ A decision you have to live with, to argue for, and to justify, in terms of your moral framework – that is a leadership decision. To make decisions and collaborate within a morally pluralistic world, to engage with others whose values may be different – not better or worse, but different. This is the job of leadership. This is where we need to place more emphasis in our Business School curricula.

The mindset and skillset of purposeful leaders

During our conversations with Rik Vera and others who have made a consistently positive impact on their organisation or community, what became clear was that despite their very different personalities and situations, they shared a common set of characteristics. We identified five core characteristics of these ‘Mavericks’, or individuals who persist and succeed in making positive change happen: 

1. A passionate belief that things should be better.

2. Resourcefulness to connect people and ideas to create momentum towards a better outcome.

3. Preparedness to challenge the status quo and act in unorthodox and nonconformist ways to get things done.

4. The ability to learn and make progress through trial and error, and through experimentation.

5. The ability to remain undeterred in the face of ridicule, resistance and sometimes outright hostility.

As part of our quantitated research, we asked a control group of executives from organisations across the world to rank themselves with respect to these five mindset/skillset characteristics. Then we compared the results to how our Maverick leaders ranked themselves against the same five characteristics. Both the Mavericks and the control group had strong beliefs that things should be better. This confirms our opening observation that almost everyone, Maverick and non-Maverick alike, believes that things could be better in their organisation or community. 

On the next characteristic, resourcefulness, a gap emerged. The Mavericks saw themselves as more resourceful, 10% more resourceful than our control group. With respect to nonconformity, an even bigger gap emerged. The Mavericks saw themselves as 20% more nonconformist. A still bigger gap emerged on the next characteristic, with Mavericks demonstrating themselves to be 25% more experimental. The biggest gap came in relation to the final characteristic of being undeterred – the Mavericks rated themselves as being 27% more undeterred than those in the control group. 

What differentiates the Maverick from the non-Maverick is the extent to which they are resourceful, nonconformist, experimental and undeterred. This is what makes the difference between those of us that simply complain and those of us that endeavour actively to make things better. So, what should Business Schools do to help more of their students become Maverick leaders? Our advice is that they should focus as much on the following as they do on strategy and finance.

Life philosophy

In our Schools, we should help executives to strengthen and articulate their life philosophy, their higher purpose of being. It was clear that each of the leaders we identified as being a Maverick had a philosophy of life that drove them, shaped their high-level goals and informed their day-to-day activity. Here are some examples:

‘I just want to help people feel better, and wanting people to know that they are cared for and loved… I always had a sense of fighting for the underdog and the importance of justice.’ Annmarie Lewis.

‘I have a real burning passion to stimulate brilliance in people, it’s as simple as that.’ Akin Thomas.

‘Giving back to my country [Mexico] my people, and all the wonderful things that I have received. It is my responsibility, my duty, to make a positive impact.’ Oscar Corona Lopez.

Diverse networks 

Maverick leaders do not work alone. Neither can they afford to be surrounded by people like them. Maverick leaders build open and diverse networks and engage with others with curiosity. We need to help executives develop the skills of curiosity and empathy. As one of our Mavericks, Annmarie, explained, it is about cultivating fertile ground by making connections with different stakeholder groups, in government, in business, in academia, in communities. Annmarie is going where she can get traction, where her nonconformity and her radical perspective can be taken up, developed and pushed forward with others.

Growth mindset and self-efficacy

These leaders embody the growth mindset, a term introduced by US psychologist, Carol Dweck, and reject the fixed mindset. They are adaptive but never defeatist. They judge by outcomes rather than just intent. Their optimism is often irrational. What they fear is not failure but fatalism. 

A growth mindset is not a genetically fixed characteristic, nor is it determined one way or another by early nurture. It can be, and needs to be, developed and strengthened in all of us, at every stage of our career. A growth mindset fuels self-efficacy. Unlike self-esteem, which is a judgement of one’s own self-worth, self-efficacy is an existential commitment to one’s own capacity to build a worthwhile life. It is a promise to oneself, not an assessment of oneself. Over the course of a well-lived life, it tends to strengthen as the sense of personal accountability also strengthens. 

In summary, Business Schools can do so much more to develop leaders that embody the change needed in the business world by: helping leaders to understand, explain and manage paradox; develop and articulate their life philosophy; develop their curiosity and the diversity of their networks; adopt a more experimental mindset; adopt a growth mindset; and facilitate transformational conversations.

David Lewis (left) is a Guest Lecturer at London Business School and Hult International Business School.
Jules Goddard (right) is a Fellow of London Business School.
David Lewis and Jules Goddard are the co-authors of Mavericks: How Bold Leadership Changes the World (Kogan Page, 2022).

This article is taken from Business Impact’s print magazine (edition: February 2022-April 2022).