15 Nov 2016
Cultivating the Next Generation of Thought LeadersRe: Michael Porter; Clayton ChristensenTopics:
Associate Professor George Serafeim (photo by Susan Young)
Michael E. Porter was an associate professor at HBS when he first developed his now-renowned five forces framework for strategy. Likewise, Clayton M. Christensen advanced the concept of disruptive innovation before receiving tenure. Both game-changing ideas, these examples of pathbreaking research emerged from HBS faculty members early on in their careers. Today Porter holds the Bishop William Lawrence University Professorship and Christensen is the Kim B. Clark Professor of Business Administration.
What makes the associate years such a “sweet spot” for faculty development is their intense blend of research and teaching, which in turn promotes innovative thinking, according to George Serafeim, the Jakurski Family Associate Professor of Business Administration. Associate professors typically begin to teach in the MBA Elective Curriculum or in Executive Education, where the synergies with their own work and deeper interactions with students give them a platform for refining their ideas.
For Serafeim, teaching Reimagining Capitalism: Big Business and Big Problems is the perfect complement to his research into how both corruption and socially responsible behavior influence corporate profitability. He has found that bribery and corruption, while they may boost sales, lead to a loss in profits. Businesses that tackle environmental, social, and governance (ESG) issues, conversely, largely increase their profitability. Further, Serafeim shows that because investors have such a keen interest in tracking ESG performance, up to 60 percent of a company’s value may stem from nonfinancial data.
Classroom discussions often energize associate professors and help shape their inquiry. In Serafeim’s case, his students suggested two reasons for management failures to heed shareholder proposals for greater action on ESG issues: processes within the organization may not be sufficiently developed, and performance incentives may be misaligned. “I went back to the data and found both hypotheses to be true,” Serafeim says. “That’s critical because the efficient management of some of the most important institutions in society depends on new approaches, backed by data.”