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An oath for MBAs to be better leaders
Partial cover of "The MBA Oath: Setting a Higher Standard for Business Leaders"
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TEXT OF INTERVIEW
Kai Ryssdal: After two-plus years of a Wall Street-induced financial crisis, Masters of Business Administration are under more of a microscope than they used to be -- especially the ones that might wind up working in high finance. Before they get to Wall Street, though, some new business school graduates are signing onto a new professional code of conduct called the MBA Oath.
Peter Escher, Harvard Business School class of '09, helped write the MBA Oath and the new book of the same title. Peter, it's good to have you with us.
Peter Escher: Thank you. It's nice to be here.
Ryssdal: Last May, when you guys were sitting around up at the Harvard Business School, about to graduate into an environment where business professionals and Wall Street were not held in the highest regard -- Were you driven to this a little bit out of a sense of embarrassment and "Oh man, we have to do something to rehabilitate the reputation here?"
Escher: Certainly, the financial crisis framed the MBA Oath in our mind. You heard terms like MBA standing for "Mediocre But Arrogant."
Ryssdal: I hadn't heard that actually.
Escher: I think there was a degree of saying, "We want this MBA degree to mean something important to us." We thought to ourselves, "What would it look like if we created a code of conduct that we wanted to live by as business practitioners?"
Ryssdal: And basically, what is the version you came up with say?
Escher: The MBA Oath is similar to the Hippocratic Oath that doctors take -- which is, first, do no harm. The MBA Oath speaks to the idea of acting with integrity, following the law and this idea that to do what's in the best interest of shareholders, you need to take a long-term perspective and balance a lot of different stakeholders, such as your customers, your employees and even society at large.
Ryssdal: Picking up again on that idea of the Hippocratic Oath, the oath that doctors take when they graduate. If doctors get something wrong, people get sick, they are grievously injured or they die. When MBAs and business professionals get something wrong, the effect is attenuated through space, right? I mean, if somebody's gets foreclosed upon, because the bank made a bad mortgage decision, that's sort of at a remove from the person who actually made that decision to issue that mortgage. Do you see my sensibility there?
Escher: I think that certainly as a business practitioner operates, he or she may not readily see the responsibility that he or she has to society at large. But if anything has surfaced over the last couple of years, in terms of the $50 trillion bailout, or assets that were lost, it's that business decisions do matter. They do affect a lot of people.
Ryssdal: Now what about yourself? You've got a job in finance up in Boston some place, right?
Escher: That's right. I work at Liberty Mutual, making venture capital and private equity investments.
Ryssdal: Living and breathing the MBA Oath everyday, right?
Escher: You know, it's interesting that one of the first things I did was take a look at our company's value statements, and I was impressed. It speaks to the idea of integrity, but specifically through the lens of the customer, that the customer is the most important thing -- that's framed next to my computer at my desk.
Ryssdal: I'm going to be overtly cynical and say here, I bet if you go to Goldman Sachs and read their mission and value statement, same kind of thing is going to be in there some place.
Escher: Every company has a value statement, and it's words on a page. The challenge for any company and the challenge for the MBA Oath is making those words come off the page and making those words influence behavior down the line.
Ryssdal: Peter Escher, Harvard Business School MBA class of 2009. Also the author of "The MBA Oath." Peter, thanks a lot.
Escher: Kai, thank you.
Mr. Lovelace is right on. The problem with this entire article is that it assumes that all MBA grads should be leaders. An MBA should not be a one way ticket to the top. Problem solving is mult-disciplinary and business skills are just another discipline. And beyond that business practioning is a discipline that currently has few or very weak licensure and accountability requirements. Real leaders are those who have a deep understanding of each and every aspect of a problem they are trying to solve. From my experience, this understanding is much more pronounced in other fields such as engineering (and as stated above, medicine). In engineering, leadership and responsibility are codified into law in most states through a "responsible charge" requirement. Simply put, if you sign off on a project, you are responsible for the end product. Period. If skyscrapers were built like collateralized debt obligations, we'd have a lot more injuries, deaths, and losses of property and a lot more engineers in jail. It's amazing to me that business schools are still able to pass off their MBA programs as "leader factories." Nice job to Harvard MBA collaborating with the marketing department. Now let's see if you can play in the big leagues and productively collaborate with the rest of us.
Visable employee loyalty by MBA's. Business and the public sector are into a phase of creative disassembly where reinvention and adjustments are constant. Hundreds of thousands of jobs are being shed by United Technologies, GE, Chevron, Sam’s Club, Wells Fargo Bank, HP, Starbucks etc. and the state, counties and cities. Even solid world class institutions like the University of California Berkeley under the leadership of Chancellor Birgeneau & Provost Breslauer are firing staff, faculty and part-time lecturers. Yet many employees, professionals and faculty cling to old assumptions about one of the most critical relationship of all: the implied, unwritten contract between employer and employee.
Until recently, loyalty was the cornerstone of that relationship. Employers promised job security and a steady progress up the hierarchy in return for employees fitting in, performing in prescribed ways and sticking around. Longevity was a sign of employeer-employee relations; turnover was a sign of dysfunction. None of these assumptions apply today. Organizations can no longer guarantee employment and lifetime careers, even if they want to.
Organizations that paralyzed themselves with an attachment to “success brings success’ rather than “success brings failure’ are now forced to break the implied contract with employees – a contract nurtured by management that the future can be controlled.
Jettisoned employees are finding that the hard won knowledge, skills and capabilities earned while being loyal are no longer valuable in the employment market place.
What kind of a contract can employers and employees make with each other? The central idea is both simple and powerful: the job or position is a shared situation. Employers and employees face market and financial conditions together, and the longevity of the partnership depends on how well the for-profit or not-for-profit continues to meet the needs of customers and constituencies. Neither employer nor employee has a future obligation to the other. Organizations train people. Employees develop the kind of security they really need – skills, knowledge and capabilities that enhance future employability.
The partnership can be dissolved without either party considering the other a traitor..
An oath is rather pointless at the end of something; vows are made at the beginning of something, like a marriage, a term of office, or a military career. I imagine a company that required all its executives to swear such an oath when they began working for the company might become somewhat popular, but precisely because an MBA is the end of something and the beginning of nothing in particular, graduates cannot suffer any negative consequences for breaking these promises. Violating marriage vows is grounds for divorce, and used to be a capital crime. Violating an oath of office is, or at least should be, grounds for impeachment. Malpracticing doctors can be stripped of their medical license. But there can be no such penalty for managers who graduate from a school that includes these words in its commencement.
The Thunderbird School of Global Business was well ahead of the curve on this, having instituted what I believe was the first U.S. MBA school Oath in 2004/2005.
http://www.thunderbird.edu/about_thunderbird/news/more_news_info/2009/_t...
Thunderbird Professional Oath of Honor
As a Thunderbird and a global citizen, I promise:
I will strive to act with honesty and integrity,
I will respect the rights and dignity of all people,
I will strive to create sustainable prosperity worldwide,
I will oppose all forms of corruption and exploitation, and
I will take responsibility for my actions.
As I hold true to these principles, it is my hope that I may enjoy an honorable reputation and peace of conscience.
This pledge I make freely and upon my honor.
As an alumnus I was able to 'take the Oath' online and have had a copy of it posted in the middle of my wall board as a reminder to myself and others. There will always be cynics, but my feeling is there is no harm in a well-crafted oath, only potential upside for those who may be challenged to live up to their commitments and values, and hopefully will think twice about grey areas before they cross an ethical line.
My company's commitment to global ethical business practices is also extremely visible to all employees, with an Ethics hotline and annual required training. While bad apples will always exist, they can rarely hide for long before they are caught and terminated. The key is the pressure to perform must be balanced against a rock-solid, well-understood ethical framework instilled in the company's values and enforced without exception from top to bottom.
Having earned an MBA over a decade ago I wondered if Eschier proposes all MBA's take the oath or only freshly minted MBAs? My professional certifications require adherence to an ethical code to keep them active but an MBA is an educational degree not a license to practice or professional certification. Will Universities revoke degrees for violation of the code?
Here's a link to the actual oath:
http://mbaoath.org/take-the-oath/
I agree that it is admirable. But I wonder how many an MBA have gone into the corporate world thinking they would not compromise their values? I agree with @Toye. The real problem in the corporate world is that profits are king, and those who make those profits, no matter how they do it, amass power and favor, which can allow them to stifle the voices of people like Mr. Escher. Until there are significant consequences to not fulfilling the oath, it is just a great ideal that will probably have little impact. But, a good start, nonetheless.
I think Toye's cynicism is well-placed in terms of our seasoned businesspeople; however, I was impressed by what sounded to me like a genuine naivete on the part of Mr. Escher who clearly believes the values of a company mean something more than just words on the page. This gives me hope that the generation of businesspeople coming into the market today will be ethically minded -- they are after all the children of the internet and 24 hour news cycles with the world, and all its problems, on their doorsteps. As a 2010 MBA graduate at Sacred Heart University in Fairfield, CT where we discussed ethics in every single class we took, I was comforted time and again by the emphatic nature of my classmates pronouncements about how they would never waver from their ethical standards and maintain their integrity throughout their careers. While I'm not a Gen Y-er, but rather of the generation that begot them, and I have every reason (and a natural inclination) to be cynical about these things, I was finally won over to the other side: the side of hope, trust and faith. I believe if any generation can guide the world to a better place, it is this generation. And, together with institutions like Sacred Heart University where the professors walk the talk, these kids will be ready for the challenge. And oh what a challenge it will be!
I have to be cynical here too; there's nothing new about oaths. Murder suspects take an oath before they take the stand, politicians take an oath before taking office, religious people...the list goes on. Until there is a definitive repercussion for breaking an oath, oaths will continue to be nothing more than a form of prose.
