Joel Gehman was appointed the Thaddeus A. Lindner and Sergius Gambal Professor of Business Ethics and professor of strategic management and public policy at GW School of Business last August. His installation ceremony will take place Friday.
Gehman has an extensive career of research in sustainability, innovation, strategy and entrepreneurship. In particular, he investigates how grand challenges related to sustainability and values affect organizational strategies, technology innovation and institutional arrangements.
Ahead of Earth Day—and his installation—on Friday, he discussed with GW Today his career, sustainable practices in businesses and the challenges ahead.
Q: How does your research and teaching fit in with the university’s mission?
A: GW is categorized in the highest tier of research intensive institutions in the U.S. This means fundamental research—the creation and dissemination of new knowledge and understanding—is at the heart of GW’s mission, and this research intensity translates directly into the classroom at all levels—undergrad, master’s and doctoral. It also means students at GW have opportunities to roll up their sleeves and get involved outside the classroom alongside faculty. Part of my attraction to GW was the opportunity to add to this research culture, through my own work and by engaging with doctoral students.
Q: How does a sustainable approach for a business affect technological innovation? Can it be done with positive outcomes?
A: On its own, innovation is extremely challenging for organizations. In fact, innovation is an entire domain of study within the field of management. In this regard, one of the fundamental dilemmas all organizations face is how much to exploit their existing competencies and competitive advantages versus how much to explore new frontiers, including innovations that may render their existing competencies and advantages obsolete.
Sustainability, too, poses incredible organizational challenges. For instance, one common definition is meeting the needs of the present without compromising the ability of future generations to meet their needs. But this definition raises many questions: Which needs count? What if needs—whether present or future—are not fixed but changing? How far into the future must we consider? What about the unintended consequences of actions today for the world tomorrow? And so on. So, when you put these two things together, the complexities grow exponentially. To address these complexities, Raghu Garud and I developed a metatheoretical framework. Specifically, we examined what we called evolutionary, relational and durational perspectives on sustainability. We showed the perspective you take has major implications for the kind of corporate strategy or regulatory policy it makes sense to pursue.
Q: Are there examples of this you can point to?
A: In many market-driven economies, energy policies related to wind and solar have involved mechanisms such as renewable portfolio standards or feed-in tariffs. These are niche protection policies consistent with an evolutionary understanding of sustainability. But these sorts of interventions can have unintended side effects. For instance, Spain had problems with an oversupply of solar due to its policy design. Another example of unintended intertemporal consequences: more than a decade ago, France, Germany, Italy and Switzerland all reacted differently to the Fukushima nuclear disaster. Germany decided to accelerate the phase out of nuclear power, which on its own may have seemed reasonable, but it was just one piece of its ambitious Energiewende strategy. A key side effect was dramatically increased dependence on Russian natural gas, which today looks misguided.
Q: What role does the future of regulation play regarding sustainability?
A: It is important to recognize that innovation is not only about “technology.” Some of the most important innovations have been new management practices, new modes of organization and so forth. For instance, in a recent paper with David Lucas and Matthew Grimes, we studied the enactment of benefit corporation legislation in the United States. These laws have been passed in 36 states and D.C. Corporations that adopt this legal form are required to give environmental and social considerations the same priority as profit. Although many people see these sorts of legislative changes as critical to remaking capitalism, others have criticized them as being too weak and not going far enough. We show that one of the side effects of these regulations is that they catalyzed more businesses to obtain and retain sustainability certification. We dubbed this the strength of weak legislation. So, the regulatory infrastructure proves valuable, not because of its strengths, but owing to its weaknesses, a rather counterintuitive insight.
Q: In your short time here at GW, what are common characteristics you see in students that can answer some of these challenges? Do you think Millennial and Gen Z students in your classes have a particular interest in making an impact through environmental, social and governance (ESG) factors?
A: When I started teaching, issues like sustainability were far from mainstream. Many business students didn’t care or see the relevance. That has all changed radically. Virtually every organization today has some sort of sustainability strategy. There are several reasons for these changes, but I do think one key reason is the shift in values that Millennials and Gen Z bring with them into the workplace.
Since 2013, I’ve been studying a group of companies, called B Corporations. These are companies that undertake a rigorous certification of their business practices across the full spectrum of ESG considerations. One of the things I have learned from this work is that certification resonates deeply with employees. Essentially, today’s graduates—Millennials and Gen Z—want to know that the organizations they are going to work for take seriously the values they care about, especially in terms of climate change, as well as diversity, equity and inclusion.
