Author: Tara Anderson

Driving social impact with a Cass MBA– here’s to embracing the ‘unconventional’

‘Don’t be intimidated by conventional ideas.’

Those were the words of our Course Director at our Cass Business School Executive MBA induction dinner.

There’s one conventional idea that I’ve found particularly hard to swallow: the primary purpose of business is to make profit.

Sometimes this narrative is explicit and direct, and sometimes it’s more subtle or nuanced. But it’s lurking. So it’s promising to see Cass starting to take steps to bring it into the limelight for some critical reflection.

Of course profit is essential for business sustainability. Businesses require capital to grow. Raising capital requires investors and investors require returns. That puts investors (and the profit needed to deliver the required rate of return) in the driving seat.  So yes, profit is essential for business sustainability. But profit no matter what?

The problem is not profit per se. The problem is profit as an end in itself, and the bigger problem is the pursuit of profit with disregard for the impact it has in reinforcing our social challenges and systems of inequality (or ‘negative externalities’ in economic terms).

The issue is how profit is made and how profit is used.

I’m not talking about isolated instances of Corporate Social Responsibility (CSR), ‘ethical duties’, greenwashing or developing morally conscious branding campaigns to appeal to millennials (while in the background the fundamental nature of the core business continues to have negative impacts on society). I’m not talking about being pressured to respond to a heightened awareness in popular culture of environmental and social issues in order to attract staff and customers (and therefore make more profit). I’m talking about building social purpose into the heart of business: elevating social goals to a strategic level, from ‘bolt on’ to ‘built in’.

This is of course already reflected in an array of existing business models in the ‘fourth sector’ like social enterprises, benefit corporations, community businesses, cooperatives and models of community ownership, which are growing in the UK and around the world. These alternative structures are part of the vision of a ‘social economy’, and there are forms of both debt and equity finance cropping up to support them, like social investment and community shares.

The problem is, these alternative models upset the neoliberal, capitalist apple cart that our current economic system is based on.

As our economics textbook put it: the ‘clear risk’ in governments becoming shareholders of banks following the financial crisis is that they could direct banks to prioritise social objectives over commercial ones. How outrageous!

Critical theory would have us ask: why are things the way they are, and whose interest does that serve?

Traditionally the corporate sector is paid enormous executive salaries and bonuses to deliver profits to shareholders, which works as a beautiful self-reinforcing cycle allowing the wealthy at the top to become wealthier.

Meanwhile, 14.3 million people live in poverty* in this country– that’s 22 per cent or one in five.

One. In. Five.

Sixty per cent of those people are in in-work poverty (they remain in poverty even while working). Is it just me that finds that profoundly shocking and completely unacceptable? Never mind the housing crisis, the environmental crisis … this list goes on. These aren’t faceless ‘negative externalities’. They are real people. Real lives.

Most people start with government and the welfare system as the solution to social challenges, but while there are many opportunities for change in Westminster, the government only controls around 40 per cent of GDP. The rest is in the hands of business, and it’s our interactions with business that dominate our day to day experience.

There are positive signs of a shift in conventional thinking. Blackrock’s recent letter called ‘A Sense of Purpose’ said that ‘companies must benefit all of their stakeholders, including the communities in which they operate’. In a similar vein, Deloitte’s 2018 Global Human Capital Trends survey showed that businesses are no longer measured solely on their financial performance but on the support they give to the communities in which they operate and their impact on society as a whole.

There is indeed much businesses can do to realign spending priorities away from bonuses and dividends to shareholders already firmly within the 1 per cent. For example they could: increase wages for their lowest paid staff, reduce prices so more people can afford their services, offer apprenticeships, cap the wages and bonuses of executives, procure from social businesses in supply chains, abolish zero hour contracts, and create affordable childcare for working parents.

Of course none of those suggestions come without complex trade-offs, but many of these options can generate a win-win. Take Michael Porter’s concept of shared value, where, for example, supporting marginalised communities to produce coffee beans on fair wages generates a sustainable and affordable supply chain for a coffee company while lifting a whole community out of poverty.

Two of my classmates recently asked me for ideas on how they could support charities, specifically disadvantaged children, and it got me thinking about we can do at Cass as students and faculty.

One of the reasons I applied for the MBA was to bring the principles of good business into the third sector and share them with the network of 600 community businesses we support at Locality.

Because the third sector has an unfortunate ‘conventional idea’ of its own – that business is greedy, uncaring and often corrupt. I’ve heard many a snide comment about ‘people in suits’, some of which were very justified and others which were simply a regurgitation of an accepted narrative without reflection. There is work to do to change the perception of business from a self-interested vehicle for free market capitalism to an agent for change.

But importantly, the education process can also work in reverse. We need to bring the social principles from the third sector into the world of business.

Because there are indeed things that business can learn from the third sector. Doing good and doing business can in fact be intrinsically interlinked. It doesn’t have to be either/or, it can be both/and.

What would happen if we removed the separation between ‘business’ and ‘not-for-profit’ and explored the grey space in between? As the Director of the Community Shares Company said: ‘the economy is not simply made up of charities and hard-nosed capitalists’.

The ‘social sector’ doesn’t have to exist in some kind of parallel universe far away from the world of business with the only bridge being CSR initiatives. CSR (done genuinely and well) is great, but there’s no net benefit in a business giving a cash hand-out to a food bank when it doesn’t pay its staff the London Living Wage; or a bunch of corporate volunteers from a bank going to paint a fence when the interest rates they’re charging on the charity’s loan means the charity can’t afford to hire a painter; or a confectionery company that sponsors a children’s charity when it’s core products increase childhood obesity.

In fact, this only reinforces and embeds the structural causes of our social challenges. It also keeps the third sector small – Dan Pallotta’s Ted Talk sums this up well.

The business models that foreground social impact need to be discussed and explored not just in third sector echo chambers, but in business schools. Not only to create new start-ups, but to adapt and transform current business models to build in genuine social purpose and explore what responsible business looks like in practice – to improve people’s lives and make profit.

(Needless to say I was thrilled to see a whole lecture dedicated to social business in our corporate strategy module!)

As MBA students, we can ask why things are the way they are, what can be changed, and how this can be done.

Rather than abdicating responsibility for business’ contribution to social challenges Milton Freedman style, or seeing the solution as a hand-out to charity, we can look inside our businesses to create more fundamental change.

We can challenge the conventional idea that profit is an end in itself. We can grapple with the complexities of realigning business models to include social outcomes. Then we can get to work in changing our own organisations to start giving business a genuinely deserved reputation as an agent for positive change.

Cheers to that!

*Living in poverty is defined as having ‘relative low income’, that is, people living in households with income below 60 per cent of the median in that year, after housing costs.

Tara Anderson
Executive MBA (2019)

 

Number-haters anonymous

Hi, my name is Tara, and I’m not good at numbers.

Numbers have always felt like another language. A language that somehow I wasn’t programmed with. I definitely missed the genes from my mum, whose favourite subject at school was calculus and whose first degree was Medicine, and my sister, who is an accountant. They love numbers. My sister collects calculators and has an ‘I love maths’ t-shirt. Really.

I love maths a whole lot less. Working on a spreadsheet has always had the magical effect of making everything else on my to-do list suddenly seem in need of my urgent attention.

One of the reasons I signed up for the MBA was to once and for all silence the voice that’s always told me that numbers just aren’t my thing. Surely these are just self-imposed limits, right? Anyone can learn anything, if they put the effort in. And if an MBA is all about challenging yourself, then I was up for it.

So imagine my delight to discover that our very first class would be nothing other than financial accounting.

I did the reading. I did the pre-prep online Harvard maths course. I prepared myself mentally for the onslaught that was to come. I was ready. Bring it.

And Cass brought it. Seventeen straight weeks of it. Accounting, followed up with financial markets and instruments and business analytics as the chaser.

Slightly more than I bargained for. I was struggling.

There’s nothing quite like that feeling when your calculator flashes up the message ‘maths ERROR’ – in capital letters just for extra effect. My calculator’s way of telling me that the formula I entered was apparently an attempt to break the rules of maths.

Or that feeling of sitting in a business analytics tutorial on a Sunday, looking at the first question, and spending the next five minutes wondering if I was the only person who actually has no idea where to start. Then accepting defeat and asking the lecturer to re-explain the concept he spent two hours describing in the lecture three days ago.

It felt uncomfortable. It felt disheartening. It felt hard.

Why couldn’t I remember how to calculate net present value, or explain the function of a yield curve, or find the z score without looking at the formula?

But I told myself the only way was forward – kind of like swallowing cough medicine. Best to get it over and done with as quickly as possible, equipped with the knowledge that there must have been many a brave number-hater who has gone before me.

So I soldiered on. But that approach just made business analytics taste like cough medicine. So I switched tactics.

I hunted out the maths lovers I know. I asked them why they loved it. I absorbed as much of their enthusiasm through osmosis as possible.

Then I went back to it, and this time framed it as a chance to discover why there are indeed maths fans out there everywhere. I stopped telling myself I wasn’t good at numbers.

And it helped.

Turns out there’s nothing more satisfying than solving an equation right first time. Seeing a question, remembering the rules and applying what you know. The first time I managed it I felt genuinely deserving of a gold star, or at least a ‘you did it!’ message from my calculator.

We laughed when as a joke a classmate wrote ‘well done’ to himself on his worksheet. But actually, self-talk is powerful.

It’s not the topic but what you tell yourself about the topic that matters most.

Well. Who knew this numbers stuff would have an unexpected lesson.

In the end there were actually at least one or two moments when I found it fun. Ok that might be an overstatement. More like, satisfying. Proving to myself that it wasn’t impossible.

My name is Tara, and I can do numbers. I’ll just probably never love them enough to buy an ‘I love maths’ t-shirt.

Tara Anderson
Executive MBA (2019)

 

 

Tick tock

I’ll always remember a conversation with a friend who is a mother of three. She told me she managed her time in 10 minute blocks. Because every minute counted. If you wanted to get anywhere close to achieving your to-do list, you made sure that every 10 minutes was used for achieving something. The dishes. The school drop off. Adding the sugar spun fairy wings to the cupcakes for her daughter’s grade two garden party (yes, she is an overachiever).

I’ve found myself remembering that conversation more and more as the initial adrenaline of the MBA wears off, and it shifts from a new challenge to a lifestyle. A lifestyle that has to be carefully managed if you want to keep your sanity and relationships in tact.

The thing I heard most in the induction, at the open day and from everyone I’ve met who has either finished an MBA or is part way through, is that I should expect to be busier than I’d ever imagined. I guess I should have realised they were serious when we learnt how to speed read as part of induction!

Because the facts are simple: there is only so much time in a day.

In my ‘old life’ pre-MBA, my days were pretty full and organised in a (relatively) balanced way.

There was my job. My full-time job. For most of us doing the MBA, our jobs are not exactly a walk in the park. I can’t remember the last time I took a lunch break, or stuck to my standard hours.

There was my consultancy business that my partner and I run alongside our jobs.

There was my social life. Ahh, the days when there was time to, you know, just hang out. Without a text book in arms reach.

There was sleep. I’m a big fan of a good eight hours a night.

There was a healthy lifestyle. Going to the gym, cooking healthy food.

Then the MBA kicks off. And at first you think you’re on top of it. You’ve done the pre-reading for every class and you’re taking it all in. No loss of sleep and you’re still making it to the gym. Winning.

Then week five comes around, and we have readings or assignments due for six different modules at once, along with professional development courses on weekends.

Suddenly you’re less up to date with the pre-reading. Financial Markets and Instruments starts to sound like another language. You’re tired. All the time. You start to wonder how it’s possible to fit everything in.

Hats off to everyone who is doing the MBA with kids (and one with a newborn!). Heroes, every one of you.

Because we’re human. There is only so much we can do and take in before exhaustion hits. When we reach that point, we might as well not have bothered with that pre-reading, because we can’t remember any of it anyway.

So years after that conversation with my friend, I’ve found myself thinking about managing my time in 10 minute blocks. Pre-reading on the tube. Writing the structure for my next essay between the gym and dinner. Proof reading an assignment before my first meeting of the day.

There are times when this doesn’t feel like learning. It feels like rushing at full speed from task-to-task, more worried about what’s on the ‘to-do list’ than how I’ll apply what I’ve learnt at work tomorrow.

So is it worth it?

No question. Otherwise it would just be some kind of strange self-inflicted torture!

But it does mean extreme prioritisation. It means knowing when to stop and take time out (I’m still working on that one). It means compromise. It means not giving up brunch with that friend you haven’t seen for months. Then after your first unsteady steps, you find some semblance of balance.

There are lots of things about Cass I expected. The level of professionalism. The slick induction process. The quality of the course materials. And Cass has some rockstar lectures in its ranks.

But the one thing I wasn’t expecting was the sense of community Cass aims to build between the students and staff. One of the first things we were told was that “you can’t do an MBA alone” (they were right by the way!).

Cass puts a lot of effort into making sure that you’re not alone. A big part of induction is getting to know your classmates – a great bunch of friendly, smart and interesting people from all over the world. You’re allocated to a group on day one, with a mentor. The course coordinators are always on hand. Lecturers know your name, start the class by asking how your week has been, and make themselves available if you need more support.

It was a nice surprise to find a human face behind the slick brochures and the corporate website.

It makes it that little bit easier when time is of the essence and you feel the pressure of the clock ticking on your next 10 minutes.

Tara Anderson
Executive MBA (2019)

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