(Corrects name of company in sixth graph to Booz & Co.)
Long known for their desire to make loads of money, MBAs until recently haven't had much of a track record in solving the world's problems. If anything, they've been the targets of intense criticism over the past two years for their role in the global financial crisis. MBAs who wanted to "do well by doing good" really didn't have many options. "Doing good" often meant joining a nonprofit and making far less than classmates who were pursuing traditional MBA career paths in consulting or finance. But times are changing.
A new breed of MBA is emerging. This group wants to use business models to help heal social ills—from childhood obesity to climate change—and make a profit at the same time. And anecdotally there are more of these kinds of MBAs in business school than ever, say students, alumni, and administrators. These MBAs are betting they can eventually earn as much or even more than their peers taking traditional MBA career routes.
Indeed, the rare MBAs who took up these nontraditional roles before it was trendy to do so will tell you that great challenges birth new businesses, and that the world is now awash in great challenges. "Today's problems are massive—and they represent tomorrow's opportunities," said John Woolard, a 1997 MBA graduate of the UC-Berkeley Haas School of Business (Haas Full-Time MBA Profile) and president and chief executive officer of BrightSource Energy, which builds large, cost-effective, carbon-free, and reliable solar-power plants, at the 2009 Haas commencement ceremony. "In the rubble of our shaken ecosystems and financial markets awaits the chance to reshape the world before you and for generations to come."
About More Than Money
Despite the gold that supposedly lies at the end of their socially conscious rainbows, MBAs are not in this for the money, they say. "Finances were a concern, but I've always been more concerned with doing the right thing," says Ron Gonen, a 2004 graduate of Columbia Business School (Columbia Full-Time MBA Profile) and founder and CEO of RecycleBank, a company that places computer chips in recycling bins that track how much people are recycling. Based on the amount of recycling that people do, they earn points, which they can then use to shop at various businesses. Los Angeles, Houston, Phoenix, and Philadelphia are among the cities that are participating in RecycleBank. The company makes a profit by helping cities divert landfill waste.
Money was such a low priority for Gonen that he nearly went broke getting RecycleBank off the ground. He used up all of his savings and maxed out his credit cards. "There were some shaky times," he says. "If you believe in something, you go for it because it makes you happy."
What brings many of these MBAs satisfaction is a job that allows them to earn a living and help a cause that is deeply personal to them. For instance, motivated by his son's autism, Keita Suzuki launched Kaien, a company that trains autistic people to work at jobs that match their natural abilities at companies in Japan. "I am not a socially minded person," writes Suzuki, a 2009 graduate of Northwestern's Kellogg School of Management (Kellogg Full-Time MBA Profile), in an e-mail. "I just want to be a father who firmly believes in the [potential] of people like my son."
Booz & Co. has deferred Suzuki's job offer while he tries to get his company off the ground. Such deferral programs aren't the only way for socially minded MBA grads to get started. Some MBA programs, including Stanford Graduate School of Business (Stanford Full-Time MBA Profile) and Yale School of Management (Yale Full-Time MBA Profile), offer loan forgiveness programs for graduates who are pursuing careers in the public/nonprofit sector.
If you don't have lots of money from the start, you might come up with business ideas that save cash for average families. James Reinhart, a 2009 dual-degree graduate of Harvard Business School (Harvard Full-Time MBA Profile) and the Kennedy School of Government, launched ThredUP to help families save on clothing expenses. The soon-to-be dad discovered that the average family spends $1,000 per year on kids' clothing, and most of it eventually ends up in landfills.
Participants in ThredUP get free boxes from the post office, fill them with 10 to 15 clothing items that a child has outgrown, and swap the boxes with another family. The company makes money on the shipping costs and those who choose to pay for a $30 annual membership, which gives access to more specific information about the items that will be shipped. One member, who has five kids, has already swapped 45 boxes, says Reinhart.
Children often provide the basis for great business ideas. Just ask Kirsten Tobey, a 2006 Haas graduate and a founder of Revolution Foods, a company that provides schools around the country with hot and healthy meals for young students. In 2006, during the company's pilot year, Revolution Foods served 1,000 meals per day at four schools. Today, it serves more than 45,000 meals per day at about 250 schools in several states, including California and Colorado, plus Washington, D.C.
The goal, says Tobey, is to provide as many students as possible with healthy options to combat childhood obesity. It's something she cares deeply about, which is why, she believes, she finds it so satisfying. "If you're just chasing money, you're not going to be happy," she says. Her advice: "Pick a job based on people and the mission of the company, rather than the brand or the paycheck."
Financing Higher Education
Some MBAs believe that education is the key to solving many social problems. Felipe Vergara, a 1999 MBA graduate of the Wharton School (Wharton Full-Time MBA Profile) at the University of Pennsylvania, created Lumni, a company that designs and manages investment funds that finance higher education for low-income students in the U.S., Mexico, Chile, and Colombia. Students don't need a co-signer or collateral, but they commit to paying a fixed percentage of their salary (never more than 15 percent) for a fixed period of time (usually about 60 months) after they graduate.
"My vision is to create a revolution in investing in human capital to show it's possible to receive an education despite low income," Vergara says. His hope is to finance 1 million students in the next 12 years.
While education is important, people still need roofs over their heads. Casey Lynch and Mike Brown, 2009 MBA graduates of the UCLA Anderson School of Management (Anderson Full-Time MBA Profile, started Pelican Holdings, a business that buys houses and apartment buildings in trouble and fixes everything wrong with them—from foundations and plumbing problems to mortgages and rents. By restoring dilapidated homes, Pelican is providing housing for people who need it and helping to reduce urban blight.
Although Pelican profits in selling and renting the properties, Lynch and Brown see their work as a higher calling. "It's nice to make money and be successful," says Brown. "But at the end of the day, it's better to hear [people] say, 'Hey, there goes a good man.' "