Marc Modica: (shouting over drums and bass) No horns! No horns!
Me: Did he say go horns?
Marc Lipson: (observing Modica’s signature guitar solo scrunched face) Nah, probably not.
So goes the storming to norming transition of a blues band. Unfortunately, I am not able to play with BluesJam as often as I did when I attended the Darden School of Business and lived in Charlottesville, so I get only a few cracks at it per year. Most of the members are Darden faculty, thus by day can be found leading students through case method discussions of finance, strategy, ethics and negotiation, while at night moonlighting as Jake and Elwood inspired showmen (and women), belting out soulful standards and a growing collection of original tunes. A handful of exceptionally talented ringers and an odd student or two round out the cast. As the only member of my class with a Bachelor of Music, my fate was all but predetermined, though Brahms and Mozart do not readily translate to blues fills and jazz riffs. To say that I have to spend most of my time just observing these guys and gradually picking up on tricks would be an understatement.
The leader of this motley crew is R. Edward Freeman, “Ed”, who by day is the Elis and Signe Olsson Professor of Business Administration at The Darden School, Academic Director of the Business Roundtable Institute for Corporate Ethics, and a Senior Fellow of Darden’s Olsson Center for Applied Ethics. He holds a raft of adjunct and honorary positions with other universities, awards, honorary degrees and other forms of recognition from institutions all over the world. Most recently, he was named a University Professor at the University of Virginia, an honor accorded to less than 20 UVA professors which both recognizes and encourages his efforts to create cross-disciplinary curriculum and build bridges between schools within the University.
Ed wrote the book on stakeholder theory. Several, actually. His 1984 book Strategic Management: A Stakeholder Approach was the first to describe a model in which the interests of all affected parties of a company (not just shareholders, employees, suppliers and customers) could be evaluated against each other in order to make balanced decisions. He has contributed chapters to several texts on stakeholder theory and management. Managing for Stakeholders, published in 2007, provides a manager’s tactical perspective on the practice of the concept in a corporation. Soon to be released Stakeholder Theory: The State of the Art, uses much of the same subject matter as the previous book, though Ed describes it as, “what would happen if a bunch of PhDs got together and started talking about this stuff and how it has progressed over the past 30 or so years. Very academic, pretty dry reading.” Entertainment value notwithstanding, and despite Ed’s minimization of the credit he is ascribed, much of the development of corporate social responsibility is heavily influenced by his ideas.
Ed is always the first to downplay the significance of his accomplishments and accolades, and to be honest, these things are rarely the first to come to my mind, if at all. I usually think about Saturday afternoon band practices at Ed’s house, with a magic refrigerator that never seemed to run out of beer. He bought my old car for more money than I wanted to take from him (at 170K miles and with a broken air conditioner, I was not sure at what point the thing would just fall apart). I was informed that Modica now uses this as a case study in his Bargaining and Negotiating classes. In his course Leadership & Theater: Ethics, Innovation, and Creativity, Ed egged on my depiction of a socially awkward, angst ridden, teenage pariah (I know you’re thinking that must have been a real stretch for me). He and his wife Maureen always have a place for you to stay when passing through Charlottesville.
Darden, like many business schools, is known for being a pressure cooker that, at times, brings out the unpolished sides of many folks. Ed’s humbleness and self-deprecating humor see him through all manner of academic, professional and personal encounters. Once during a TV interview, a contributor from the Twitter-sphere informed the world that, “you have to turn on CNN and check out the effeminate Chia-pet guy!” Ed remarked later, “I get the hair thing. But effeminate?” If you need visualization, think Hagrid from Harry Potter. Ed has embarked on a new approach to preparing food, espousing (though not exclusively) many of the concepts of veganism. He mentioned that, “Mackey is really into it and does this oil-free cooking thing.” Mackey is Whole Foods CEO John Mackey, who recently spent time cooking with Ed, discussing management topics and their personal interests in healthy eating, though you would have thought he was talking about an old college buddy.
Of all the topics we covered in his first-year Ethics course, the one thing I remember most is his recommendation to not approach a decision with the intent to only identify tradeoffs, because if that is all you are looking for, then that is all that you are going to find. The topic resurfaced in Modica’s second-year Bargaining and Negotiating course, when we identified the taxonomy of different negotiating tactics. In this case, the context was competitive bargaining between two or more parties, but the constructs can also be applied to stakeholder analysis, or any flavor of business strategy. Tradeoffs are another way of describing a distributive negotiation, where one party’s gain is another’s loss. This sounds much like the argument that business cannot be both sustainable (environmentally and socially) while also economically successful. One way of breaking out of this thought loop is to employ the two other concepts, integrative and congruent bargaining. In an integrative negotiation, we identify something the other party needs or wants, to which we are indifferent or benefit by giving up, and vice versa. Concessions on both sides make each party better off. Congruency refers to the realization that all parties want to have the same outcome on a particular point, but the irony is that many never discover this without communicating with each other. Applying these and other tools, within the framework of stakeholder analysis, could be a very effective weapon against the heel-dragging with regard to climate change legislation.
Ed’s Leadership & Theater class is perhaps his most unconventional contribution to the academic curriculum at Darden. When all was said and done, we had read and acted out scripts, directed and critiqued others’ performances, collaborated on writing and staging original works, produced two public performances and made lifelong friends out of a group that might otherwise have been “just classmates”. There was teamwork, argument, swearing (lots of swearing), heavy topics for discussion, last-minute panicking, eventual success and an incalculable amount of learning. The point of all this, I think, was to see how we would interact with others when real stakes were on the line. This was not a case study of some anonymous company, or abstract theory. Sometimes, making a decision meant that someone’s feelings might get hurt or the quality of the end product would be sacrificed, on public view for the whole student body. Thankfully, no one took any criticism too much to heart. At the end of the final performance, we took questions from the audience. We got a lot of, “So what did you learn from this course that will be relevant to your management careers?” It was hard to restrain the knee-jerk outburst of, “EVERYTHING!” One of my classmates summed it up best by saying, “I will never have a problem making a presentation to anyone, anywhere, anytime, about anything.”
So what is on the horizon for BluesJam? We are currently laying down tracks in Ed’s home studio for our first album, a little bit at a time. We are not sure if it will ever be picked up, but it’s quite rewarding just to “work” on something that lights up the creative parts of the brain. Lipson and I will put together a more complete Horn Bag of Tricks and try to get out of Modica’s way (if we feel like it). Everyone in the group contributes something unique, but also has individual needs and objectives. We are most successful when everyone gets what he or she requires, and as a group we grow as contributors and as an ensemble. Sounds like stakeholder theory blues.
All black and white photos were shot by Professor Sankaran Venkataraman. The photo of the 2008 Darden Theatre Company was taken, without asking, from Akash Premsen’s Facebook profile, but since I am attending his wedding in November I figure I can get away with it.