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 / Summer 2008 / Issue 51(originally published by Booz & Company)


The 21st-Century MBA

Experimentation, Practice, and Social Innovation
Practical experience in social innovation can build a person’s capacity to act skillfully in a variety of complex situations, especially in those increasingly common circumstances in which business must build alliances with the public sector and with nongovernmental organizations (NGOs). Moreover, the best managers will frequently find themselves, as noted by Anne-Marie Slaughter, dean of Princeton University’s Woodrow Wilson School of Public and International Affairs, switching jobs among the private sector, the government sector, and the nonprofit sector throughout their careers. In that spirit, many schools are now directing their students toward real-world projects that employ “social entrepreneurship,” using the practices of business to solve both business and wider societal problems. Their students find ways to broaden the positive impact of business by bringing social goals to traditional for-profit management; by applying business skills to nonprofit and NGO management; and by developing new models of hybrid, social-venture corporations. These hybrids might include, for example, environmentally innovative manufacturing companies or community development banks like the Grameen Bank. Such organizations explicitly focus on both financial and social bottom lines, pursuing profits while fulfilling social or philanthropic goals.

In contrast to the conventional sink-or-swim model of practical education, which places students under extreme competitive pressure with the narrowly defined goal of outdoing one another in a forced-curve classroom situation, these experiences have practical pur­poses, defined broadly to encompass both business achievement and positive social impacts. They put students in direct contact with people already engaged in enterprise in a variety of sectors, communities, and cultures. The context is designed as a learning experiment, with mentors and a collaborative spirit.

A case in point is the Global Health Initiative (GHI) at Northwestern University. In 2005, the uni­versity set up a collaborative effort including industry, nonprofits — notably the Bill and Melinda Gates Foundation — and faculty from three professional schools to develop and test what the GHI principals call “a new R&D model for the developing world.” They explain that “the regions that most need various health-related technologies often do not have the market potential to trigger the R&D expenditures required to adapt the existing technologies, such that they can be successful given realities of limited skilled personnel and infrastructure challenges.” GHI has framed this challenge as “simply a market problem.”

The university has set up what amounts to a small, nonprofit biotech company. To address the needs of ­de­veloping countries, graduate students from the Robert R. McCormick School of Engineering at Northwestern are working to modify the intellectual property contributed by GHI’s corporate partners, including Abbott Laboratories and Inverness Medical Innovations, and Kellogg School of Management MBA students are working to understand the market dynamics, government requirements, and distribution challenges on the ground. Finally, researchers from Northwestern’s Feinberg School of Medicine will conduct field trials on the findings of the first two teams. Kellogg Professor Daniel Diermeier explains: “This gives students the ex­perience of working in a medical device environment from cradle to grave. They do everything from initial market research to working with the engineering team to dealing with myriad implementation problems, all in a protected environment and on projects that have the potential to do a lot of good in this world.”

Northwestern’s GHI is only one of many practical experiments that hold the promise of giving students the chance to practice their decision-making and implementation skills, as well as to see themselves having an impact that goes beyond the bottom line. This kind of experience can be intoxicating. In fact, a review of curricular efforts in sustainability reported at Wharton in 2004 found that such practical and entrepreneurial initiatives were both driven by and most favorably received by business students.

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  1. Andrea Gabor, “Lessons for Business Schools,” s+b, Spring 2008: Resources on the history of management education and its relevance to the needs of today’s business environment.
  2. Mark Gerencser, Reginald Van Lee, Fernando Napolitano, and Christopher Kelly, Megacommunities: How Leaders of Government, Business and Non-Profits Can Tackle Today’s Global Challenges Together (Palgrave Macmillan, 2008): Illuminates how groups from different sectors working in concert can address problems none of them can solve alone.
  3. Rakesh Khurana, From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession (Princeton University Press, 2007): A Harvard Business School professor’s review of the history and purpose of management education and an outline for reform.
  4. Art Kleiner, “The Thought Leader Interview: Anne-Marie Slaughter,” s+b, Autumn 2007: The dean of Princeton’s Woodrow Wilson School on networks and the multisector career path.
  5. James O’Toole, Leading Change: The Argument for Values-Based Leadership (Ballantine, 1996): Management theorist looks to art, history, and philosophy to demonstrate that values-based leadership is the best way to coax organizational change.
  6. Reggie Van Lee, Lisa Fabish, and Nancy McGaw, “The Value of Corporate Values,” s+b, Summer 2005: Booz Allen Hamilton/Aspen Institute survey of corporate behavior finds that leading companies are crafting purpose-driven identities.
  7. For more business thought leadership, sign up for s+b’s RSS feeds.
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