For Erb’s new director, it’s global ’24-7’
By Kevin Merrill
Even though “Global” is part of the Erb Institute for Global Sustainable Enterprise’s name, its new managing director says it must become part of the DNA of its teaching, research, and business engagement.
Terry Nelidov knows something about global. He speaks four languages (English, Spanish, Portuguese, and Guarani from Paraguay) and has worked for companies and organizations in North America, Latin America, Europe, and Asia. In his new job, a primary focus will be on strengthening the Erb Institute’s already strong international reputation. “The institute is already global in its mission and perspective. I think the challenge is to drive that global mission into action in the areas of research and teaching, and then to business partnerships,” Nelidov said. “It’s not easy to do.”
To do so means even more focus on how business is taking place in emerging economies such as China, Indonesia, and Brazil, and on the issues that companies and industry organizations are struggling with in all markets, such as access to water or clean energy. Of course, there is another challenge: convincing even more companies about the value of sustainable business practices in the first place.
“Out in the field, we sit down with executives and we’re still making the basic business case ‘Why?’ Why social impact matters and why environmental stewardship; what climate change is and how to develop a climate change strategy; issues like governance and human rights,” Nelidov said. “In joining Erb, I’m excited to have the opportunity to step back, so to speak, in the value chain—from businesses back to management education—and to introduce these core environmental and social issues early on, before students graduate and join companies.”
He joined the University of Michigan from Business for Social Responsibility, a 250-member network of companies focused on business sustainability. Before that, he spent nearly two decades in business and human development in Latin America. He was Country Representative for Catholic Relief Services in Peru (the overseas development agency of the U.S. Catholic community), where he worked on development issues, including corporate social responsibility and mining issues.
His Latin America experience began with the U.S. Peace Corps, where he was assigned to Paraguay. He later worked at the INCAE Business School in Costa Rica; facilitated startup of a land development company in El Salvador; and consulted on assignments in Ecuador, Honduras, and Dominican Republic. He has an undergraduate degree in industrial engineering from Stanford University and an M.B.A. from IESE Business School in Barcelona, Spain.
Founded in 1996, the Erb Institute operates its own research and outreach programs. It also provides services to, and enriches the educational experience of, students from SNRE and the Ross School of Business who are dually enrolled in the joint M.S./M.B.A. program. These students, including 72 currently enrolled and another 330 alumni around the world, are often referred to as “Erb-ers”.
Nelidov spoke to Stewards about his new role, the Erb Institute’s place in global business, and opportunities ahead.
Stewards: So what drew you to this job? You were obviously over there in Hong Kong and then this job gets advertised and you thought, “Oh, this sounds like something I want to do.” Why did you apply?
Nelidov: The first thing that drew me to the job was the name. Erb is recognized as, I think, the leading sustainability Master’s program in the world. And I’ve worked in sustainability in one way or another for the last 20 years, both in the U.S. and in Latin America and Asia. A long time ago, in the mid-90s, I worked with INCAE Business School in Costa Rica on a similar initiative to create a network of young business leaders for sustainable development in the 18 countries of Central and South America. I like the academic environment, and I liked working in a graduate program in particular.
And so when I saw the listing it called upon was my experience over the last 20 years of working with business people. I was working at BSR with a lot with mining, oil and gas companies in Asia and Latin America. When we sit down with the executives, we still have to make the business case for this “sustainability stuff”. This is 2013, and we still spend a lot of time making the business case why social impact matters, why environmental stewardship matters, what climate change is.
Out in the field, we sit down with executives and we’re still making the basic business case ‘Why?’ Why social impact matters and why environmental stewardship; what climate change is and how to develop a climate change strategy; issues like governance and human rights. In joining Erb, I’m excited to have the opportunity to step back, so to speak, in the value chain-- from businesses back to management education—and to introduce these core environmental and social issues early on, before students graduate and join companies.
Erb is trying to cultivate our students as future leaders in the sustainability debate so that when they enter the business world, or the non-profit world, or research, they already have these tools and they have this perspective. For me, it’s a framework of how they think about sustainability issues long before they meet with an external consultant, who has to sit down and explain it to them. So that was my interest in joining Erb.
Stewards: Why do you think that reality still exists among corporate leaders? And does it exist only in certain vertical markets, or is it still kind of a horizontal phenomenon that people say, “I don’t believe it. It’s not good business and I’m done talking about it.”
Nelidov: I don’t think it’s horizontal. What I’ve seen—not from research but from my own experience—is that some industries adapt to change faster. It’s my impression that consumer-facing industries or high-tech industries change faster, where their business is not only adapting to change, but promoting change, creating it. If you look at internet companies and telecommunications companies, perhaps scientific research companies, I think they are closer to the change and they are closer to the market that in some cases is demanding that change. They move faster. Whereas, other companies have more traditional engineering-based cultures, like the mining companies, and are slower to adapt to the new sustainability landscape.
Stewards: What does a managing director do? What are your duties and responsibilities?
Nelidov: Well, for me, I see the managing director as a key facilitator in a lot of different aspects. For one, it’s facilitating the work of the staff, the institute team. We have five people on the staff with individual responsibilities and I think it’s key for the managing director to assure that they have the resources and the access to tools and financial resources they need to get their job done. I think it’s also facilitating a long-term vision for the program, together with the staff. Facilitating a process so that the staff—along with faculty, the alumni, the external business partners—all contribute to a shared vision for the long-term direction of the institute.
The other key component is helping to link the staff to all of the other resources available in the university, all the other partner institutes, the other schools, as well as external resources, such as through the alumni network and through our business partners. It’s linking the actual implementation with all of the other resources available to get the work done—not just financial resources, but personal contacts, networks externally, information resources. Because the mission of Erb is ambitious and long term, we can’t do it alone as an individual institute, but we can do it with the help of all of our internal partners within the university and external partners.
Stewards: You’ve only been on the job a couple of weeks, but how do you see yourself putting some fingerprints on Erb that are distinctly ideas that you have to make it better?
Nelidov: I’m walking into a sustainability institute that’s No. 1 in the world and it comes from all of the work you just described, the previous directors and the current staff. So building on that foundation, there are a couple of areas that I am really excited about pursuing.
I mentioned two of them in my first Erb blog. I think one is furthering the global perspective of the institute. I’m told it was a year or two ago that the name was officially changed to include “global”. The institute is already global in its mission and perspective. I think the challenge is to drive that global mission into action in the areas of research and teaching, and then to business partnerships. It’s not easy to do. And, for me, global in particular means a couple of key countries, emerging economies that are defining the next 15 to 20 years of this sustainability dialogue globally. So it’s China, it’s India, Indonesia, Brazil and maybe as the next group, South Africa is going to be key, and Korea is really developing quickly.
And so I keep asking myself, ‘How can you think about global sustainability without thinking of China?’ You can’t! So how do you make that practical in terms of the research that we’re doing, in terms of the engagement that we’re having with the students? And it’s not just about what case we’re assigning or what textbook, but the deep engagement around global issues the students are having with the faculty and with us, the staff.
And then it’s how are we working with partner organizations, particular partner companies? And part of that is where our students go for their internships and their student projects. But it’s also about what feedback companies are giving us on the real-life issues they are facing in the field on global issues. For example, if you are a manufacturing company and you have operations in China, water is going to be a key driver of business sustainability China. And are we hearing about that from our business partners? China just in the last two months announced their first carbon-emission targets.
Are we getting feedback from companies on that to include in our research and teaching? So the global, I think, is really exciting to pursue.
The second, which I also mentioned in my blog, is we have a really strong environmental foundation at Erb. In particular, climate change, energy, and water have been key issues throughout the life of Erb. Building on that foundation, how do we start to incorporate other social issues to complement environmental concerns? And I understand in SNRE these are framed as environmental justice, such as the overlap between what one may call purely environmental issues like water, and the social impact of water or climate change. What’s the impact going to be on rural communities, or disadvantaged populations, or poorer segments of society?
Social impact often comes from companies’ social investment programs, but it’s not just throwing money at the community so the community won’t bother the company, but rather it’s about strategic social investment, how the company invests resources in its local business partners and supply chains; in the educational system, which is educating their future employees in many cases; how it’s investing in opening up the local economy through economic inclusion or social inclusion so that the base of participation is much broader; and how these tie back to long-term competitiveness of the company and short-term profitability.
Stewards: So global doesn’t mean specific nations. Global means the global horizontal issues that are threaded through nations and industries like energy, like water, like climate change?
Nelidov: Lots of programs train international managers, managers who can go out and work in a different country than their native country, which is valuable. But I think leadership really means global citizens, and it means business leaders that recognize the global impact in social, environmental and economic development that companies represent. And they understand that their role is to promote the success of the companies, but in a framework that contributes to broader global social, environmental and economic development in a global community.
It means infusing global perspective into the teaching materials , the student project work, and the dialogue taking place every day at Erb. It’s not just about doing business outside the U.S. in one or two other countries; it’s about a global approach to the unique contribution that business can make to sustainability—both to contribute to society, and to improve both short-term profitability and long-term competitiveness.
When you think about really complex social, environmental, governance, and economic problems, you have to think in terms of systems thinking. It’s not just one company acting alone, or even an industry as a whole. It’s not through just one or two business variables. Sustainability is really about understanding the interrelationships between all these variables, and many more. And I think SNRE thinks a lot about that in terms of earth systems and complex systems thinking. So when you ask what value does SNRE bring, for me that’s what it brings. SNRE brings earth systems to the discussion and I think Ross brings management systems.
Stewards: What is the world perception, in your opinion, of the Erb Institute?
Nelidov: I would characterize it as the Cadillac of sustainability programs for exactly what we were just talking about. I think it’s perceived as the premier program because it comes from one of the leading universities, not just in the U.S., but in the world, with two of the most important schools supporting it. I think they recognize the gravitas of Erb’s three-year dual-degree commitment, so it’s not just an add-on to another program, but Erb is a decision students make early on that they are going to be in this for three years. And I think they recognize that it brings a unique combination of the science on the environmental side, together with management discipline on the business side.
I think the perception is one of excellence. I really do. In a small, very select group of students each year that make the decision to dedicate their careers to sustainability in one way or another. Some of them are going to work in businesses, and others are going to work in non-profits, while others are going to work in research. But I think the vast majority of them will end up in some kind of engagement with business on sustainability.
Stewards: I wanted to ask you about sustainability “ecosystems.” You yourself put it in quotes in your blog. What did you mean by that?
Nelidov: When we talk about, we talk about the ecosystem of organizations in that dialogue. So it’s not just one organization, like an environmental NGO or a business association, but it’s a whole ecosystem of organizations, networks, and relationships that really drives the change.
So for example, if you think of a sustainability nonprofit and its ecosystem, that organization is part of a network of non-profits, of business associations, activist organizations, even church organizations. And they communicate; they share resources; they share ideas, and contacts. A lot of times they partner together on initiatives. But it’s that whole ecosystem that’s driving change.
Some people ask me, ‘Has anything really changed over the last 20 years in sustainability? Are we really making any progress?’ You can always point to individual failures in business sustainability, and often those are the ones that get the most press. But if you look at the trend over the past 20 years, the median line is definitely moving up. Things that are happening now never would have happened 20 years ago— when mining companies reach out to talk with their local communities, bring in farmers for dialogue, talk with local priests and activists, before they make a commitment to developing a mine. And they do it because they know they have to to in order to have a chance at developing the mine.
But when you compare that to the way mining was done 20 years ago, it’s a paradigm shift. The median is moving and I think it’s the ecosystem altogether that’s moving it. I don’t think it’s any individual organization. Sometimes people get frustrated working in this area, working in an industry association or an activist group because they think at the end of the day, “What have I, or we as an organization, what have we really accomplished?” You may not be able to point to all the individual victories that you would like to, but I think if you look at the whole ecosystem, it is making a significant difference. The median line is moving north.
Stewards: What do you bring to Erb? Where will you focus your efforts?
Nelidov: Maybe three things. First, I bring a passion for business leadership and for starting with that vision, hopefully an ambitious one, and making a real impact. I believe in the role of business leadership, and I believe in starting with a vision where real change in the business world happens. I respect certain business leaders that go beyond just being good managers or successful executives, but they really bring business leadership to the table. A lot of times it means they corral their peers behind a shared vision, and then really make change happen, together.
Second, I hope to contribute a global perspective to Erb. I’ve had the chance to work in a number of different countries, and I think there’s still a lot to be said for living and working in country— even in a world with Internet and virtual reality. I hope to also contribute perspective on some of the needs of emerging economies. What’s important in emerging markets for managers, and later leaders, to be successful?
And third, I’m really excited by the communications component of my work at Erb. I think that produce a lot of new knowledge, and written materials, and real-life experiences, and practical tools that companies can use today. How do we get all those resources out into the global dialogue, for others to use? And I’m really excited by some of the new opportunities to do this through social media.