In the wake of the financial crisis, one name was oft repeated. It echoed across the ravaged landscape of foreclosed houses and fallen financial giants. It was Harvard, or specifically Harvard Business School. Around half of the 30 bankers summoned to the New York Federal Reserve to write a rescue plan for Lehman Brothers had Harvard MBAs.
HBS, as one of the best business schools in the country, unsurprisingly dots the diplomas of many of the world's leaders. "If there was a great scandal in manufacturing, we'd be there," said Nitin Nohria, the dean of HBS, in an interview with AOL Jobs. "In social enterprise, we'd be there too. The higher you rise, the harder you fall."
But Nohria doesn't shrug off the particular responsibility of his school to address the widespread culture that prized short-term profits over social good.
"If we're going to take the glory of people's success," he said, "we have to take responsibility for their failure."
The naming of Nohria as dean last year was seen by many as an acknowledgment of the need for reform. Nohria, after all, has been pushing for more ethical practices in business for decades. In the 1990s, Nohria and an HBS colleague were discussing how best to inculcate a moral purpose into Harvard's business students. Nohria's sister had just graduated from medical school at the time.
"What if there was a Hippocratic Oath for business?" he thought. The seed of the MBA Oath was sown.
It only began to flower, however, in 2009, when a group of Harvard graduates voluntarily signed the vow. Now thousands of students across hundreds of institutions are doing the same. "I will strive to create sustainable economic, social, and environmental prosperity worldwide," they pledge.
Nohria has no illusions. Signing a piece of paper rarely has the power to transform a human soul. But the research is clear; when groups of individuals -- like graduating law and medical students -- are publicly committed to a shared set of values, their behavior bends, at least in part, to meet them.
Business has never had that sense of professional unity, although many of America's business schools, like HBS, founded over a century ago, were created to do precisely that, according to Nohria. They were seen as training grounds for a professional class, not just incubators for future millionaires.
Under Nohria's stewardship, reform has come fast at Harvard -- too fast for some. Although a staunch defender of the case study method that HBS pioneered, he has introduced a complementary "field study method" to give students more hands-on experience. He's also carved out more opportunities for reflection in the HBS calendar to create a framework of what he calls "knowing, doing and being."
The incoming HBS class this year might have been surprised by one of their first assignments. The 908 students were brought to a hall decorated with stirring portraits of last year's graduating class. Look at them, they were told. "What will you do with this one and precious life of yours?" they were asked.
The students were then requested to submit their reflections. Nohria received 940. "Some just had to write more than one," he said. Similar exercises will be scattered throughout their first year.
Nohria's particular concern for the moral dimension of business has its origins in the optimism and dizzying growth of a newly independent India. Nohria's father was a member of the first generation of Indians with a great education, and he used it, as the chairman of a manufacturing giant, to help lay the infrastructure of his new nation. Nohria's fondest childhood memories are traveling with his father through the country. Returning today, he sees thriving communities where before there was only dust.
"I saw in a visceral firsthand sense," he explained, "the power that business has to create prosperity in society." That's what business is, he claims, at its core.
The Wall Street-bashing of recent years has pained Nohria. Finance, he says, is the engine of prosperity: "The measure of every town is its bank," with the pillars and pediments and gilded names befitting such a temple of modern civilization, and it has been for centuries. Abuses in the industry can have the opposite effect, though.
America's epidemic of unemployment is not the simple fallout of power-drunk MBAs, Nohria wants to make clear. Cheap credit and the artificially inflated construction boom "softened to blow," he said, of the relentless decline of certain American industries.
Where America Has The Edge
"There's actually no jobs crisis for highly educated people," he said. In July this year, the unemployment rate for workers over 25 with a bachelor's degree was 4.3 percent. That's more than double pre-recession numbers, but nothing compared to the crisis facing Americans without a high school degree, 15 percent of whom can't find work. "K through 12 are no longer our best and brightest," explained Nohria. "But our top talent rivals any other in the world, and might be better."
There's, in fact, a labor shortage for many skilled professions, like health care services, and a clambering competition for talent in Silicon Valley, and other boomtowns. Entrepreneurship, Nohria emphasizes, like many others, is the key to our country's recovery, and quotes a recent Kauffman Foundation study that found that all new net jobs are created by startups. "After that first startup year, it's a wash," he said. "You create jobs, you lose them." Nohria proudly states that half HBS graduations, 15 years out, have started their own enterprises.
"Somewhere today there's something happening in a garage, or a science lab, or a government lab," he said, something like the internal-combustion engine of the 1850s or the personal computer of the 1970s, which will shake up the world. "If we knew what it was, it wouldn't be an innovation, it would be a fact."
The future of American prosperity fundamentally depends on jobs that can only be done locally, he muses: green construction work to retrofit buildings, electric grids we haven't designed yet, drilling in ways we haven't imagined. The real question, Nohria said, is: "What is the startup that could be founded by the 52-year-old laid-off autoworker in Detroit?"
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