Rodolphe Durand is a Professor of Strategy and Business Policy at HEC Paris. He is the Founder and Academic Director of the Society & Organisations Institute (S&O), an interdisciplinary institute at HEC Paris which brings together 60 professors and educators. They carry out research, teach and implement ideas to organise and lead the response to the most pressing challenges we face – including climate change and social inequality. 

Durand is also the Holder of the Joly Family Purposeful Leadership Chair. Hubert Joly, previous Best Buy CEO and current Harvard Business School lecturer, graduated from HEC Paris in 1981. As a long-time donor and a member of the school’s International Advisory Board, Joly endowed the chair to foster the school’s commitment to purposeful leadership, and Durand was appointed the first holder of this chair.  

Why is teaching purpose important to you?

I graduated with a PhD in 1997 and for a decade, I did my job as expected: I taught corporate strategy, competitive advantage and share-value maximisation. But when the financial crisis hit, I felt a responsibility to train people who didn’t care about their impact – especially those that were blindly following the recommendations of their organisations, firms and banks without considering the ethical problems of lending money to people who can’t pay it back.

I wanted to align my teaching and research with a focus on the responsibility of businesses. I decided to convince the dean at HEC Paris and the HEC Foundation that we should deal with how organisations shape the social landscape.

We developed the S&O Institute – an interdisciplinary centre at HEC Paris. The members research and teach about the contemporary challenges that organisations face, how they mould society and conversely how social movements influence them. 

Do university rankings influence what is taught at the business school?

Business schools are ranked, and one key criterion for ranking is the salary increase or the ‘value for money’ of the degree. Some years back, business schools often questioned programmes about business and sustainability, like the ones offered by S&O: “Are they ‘worth it’? Should we really expand them?” 

Looking at the salaries at the end, they appeared to be less contributive to rankings than those from banking or consulting. But today, salary differences have disappeared and jobs with a sustainability component are in high demand. Business schools that anticipated this demand are better prepared. For instance, the Sustainable and Social Innovation Master at HEC Paris doubled its size recently and now records 100 students a year. 

This demand from the job market coincides with expectations from our participants. When students start at HEC we ask them: do you expect business schools to offer courses on sustainability and responsibility? Six years ago, only one third of respondents said it was a necessity. Last year, 2021, we saw the opposite: almost 70% expected courses on this.

How do you introduce purpose-driven business to students and executives? 

I start by asking why purpose leads to superior performance. There’s an idea that people will be more engaged with a purposeful company and as a result, the organisation will perform better. In reality, there are reasons that these positive effects may not come to fruition. For instance, those in the business who do not care about purpose risk becoming disengaged, which in turn could hinder potential benefits. 

What are the conditions that separate a purpose-driven organisation from the crowd and deliver superior returns? Research shows that when some conditions (e.g. clarity of purpose, focused principles and purpose-based leadership) are met, an organisation can outperform its peers and earn above average returns. For instance, when the leader ‘walks the talk’, and when an individual’s work connects both to the objectives of the team and the overarching purpose of the firm, you can expect better performance. 

When I’m training executives who are already in leadership roles, I know that they have deep-rooted incentives and indicators that they need to maximise. It’s not that their heart isn’t in the right place but their operational constraints make it harder for them to change their perspective. It’s better to teach them through experience, by meeting purpose-driven leaders and the new generation of engaged students. 

For example, one cohort of executives met a woman who had climbed the corporate ladder, and was then assigned the objective of reaching one billion sales for her unit. “When they gave me that objective, I quit,” she explained to the executive programme’s participants. “It didn’t mean anything to me, it was a completely empty goal.” Instead, she decided to work for a startup that promotes sustainability programmes at the corporate level. For these executive leaders, it was powerful to interact with impact-driven entrepreneurs who left the very same companies in which they are currently leading.

This article was first published in Issue 02 of The Beautiful Truth. Order your copy here.