A useful overview of what many of us have been talking about (including in MBA programs) in how changing the culture is the first step is moving away from legacy management strictures. Tech has mostly led this but large tech firms have created their own entrenched bureaucratic cultures.

The criticism of the Business Round Table (BRT) “head fake” statement in 2019 where major company CEOs said that maximizing shareholder value was no longer their sole focus is apt:

Since the declaration was issued, researchers have found no indication of significant change in corporate behavior. Harvard Law Professor Lucian Bebchuk and colleagues found that few of the signatories obtained the approval of their boards to sign the announcement. Nor has there been any apparent effort to change the many processes and practices that reinforce the goal of maximizing shareholder value. And in cases where the firm has had to make a clear choice between shareholders and other stakeholders, these firms have invariably chosen shareholders ahead of other stakeholders. Massive share buybacks that benefit shareholders, particularly executives, continue to flourish, even where there has been a collapse in profits. Bebchuk concludes that the BRT statement was signed “mostly for show.” Indeed, the declaration may be serving as a cover for an even tighter focus on shareholder returns.  According to Professor Rajan, “Recent evidence even suggests that the corporations that [signed on to BRT statement] have been more likely to lay off workers in response to the pandemic, and less likely to donate to relief efforts.” The BRT declaration thus appears to have been a head fake, designed to deflect the negative press that 20^th Century management engenders. While the senior executives may use public statements to deflect criticism, their staff can see that all the old processes supporting shareholder value are still in place. So the safest thing for them to do is to go on acting as before.

https://www.forbes.com/sites/stevedenning/2020/10/11/ten-reasons-why-big-firms-stick-with-obsolete-management

MBA program curricula criticism is also appropriate. Most programs are still bathed in 20th century management thinking. This is partially due to their legacy of being stamps of certification for large companies. That has been changing over the past decade as there are fewer company sponsored students. Freethinking around corporate culture change and responsive organizations is happening as we’re doing at NYU Stern but, given academia’s non-hierarchical structure, it takes time to change that culture as well.

We need more business leaders not only saying these things but putting them into practice.