For Business Schools, Culture Matters

To create a different kind of B-school graduate, a dean argues that a key first step is creating a different kind of B-school culture

By Rich Lyons

Have business schools contributed to creating overconfident and self-focused leaders? I suspect many of you will nod your head in agreement. You might even declare that, by extension, business schools share blame for the economic crisis. As a business school dean, I take these perceptions seriously; there is enough in them to warrant careful reflection.

An antidote to overconfidence and self-focus in business leaders may lie in building more focused cultures in our business schools. Culture is the set of values and norms in an organization that shape behavior. It acts as an internal gyroscope for everybody in the organization to keep them in balance, acting ethically and in line with the larger interests. It is what people do "when the manager is not looking."

While all business schools have them, however, cultures are often unarticulated, reducing their impact on behavior, or articulated so generally that fundamental issues such as overconfidence are unaddressed.

The business world is far ahead of business schools in putting their cultures to work for specific ends. Companies such as Procter & Gamble (PG), General Electric (GE), McKinsey, Nordstrom (JWN), and Southwest Airlines (LUV) use their cultures to earn their customers' trust, as well to earn a profit. For example, Southwest has remained at the top of its game for decades by promoting a strong internal culture focused on serving the customer better through team effort over individual results. The firm's guiding values are responsible for the popular image of Southwest employees as a fun-loving group that eagerly pitches in to get the job done, including having pilots sometimes clean airplane interiors and load baggage. As a result, Southwest operates more efficiently than other airlines, while its customers are happier—and pay less.

Professional Will, Personal Humility

To what ends might business school cultures be more productively put? Reducing overconfidence and self-focus are good candidates. So is the related concern about lack of humility among certain business graduates and leaders. Research is pointing to the commercial value of achieving these ends. For example, Jim Collins, in his book Good to Great, finds that the leader type that has created the most extraordinary value over recent decades is one with a "paradoxical blend of personal humility and professional will"—will for the institution or something greater, not the self. This value may arise because the leader's job is, in essence, to get results through others, and the first step may not be to convince others how stunningly good you are. David Brooks echoes this in a recent New York Times column, in which he concludes that "if this leadership style were more widely admired, the country could have spared itself a ton of grief." That there is commercial motivation for achieving these ends is important for judging the realism of using culture more deliberately in this way.

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