Values Matter: Interview with Author and Business School Dean Michael Lenox
I recently went one on one with Michael Lenox. Michael is the Tayloe Murphy Professor of Business Administration and Senior Associate Dean and Chief Strategy Officer at the University of Virginia's Darden School of Business and the co-author of The Decarbonization Imperative and Can Business Save the Earth?.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks or challenges have been most instrumental to your growth?
Michael: I’ve long had an interest in solutions to our global environmental challenges. As a graduate student in systems engineering, I completed a thesis on assessing and mitigating the risk of extreme events at U.S. chemical facilities, basically high-causality explosions and leaks. While my research was largely focused on the technical risks inherent in operating a large-scale chemical plant, what became obvious was that these risks were less engineering-oriented and more managerial and business issues at their heart. This eventually lead me to pursue a PhD in economics with a focus on environmental policy. As I began my program at MIT, I got hooked up with a research group focused on Technology, Business, and Environment led by John Ehrenfeld. This was in the mid-1990s before the term “sustainability” had become popularized, especially in business circles. This quickly became the focus of my studies and research and led me to seek a faculty position in a business school upon graduation.
Early in my academic career, while a faculty member at NYU and Duke, my research largely focused on the incentives for large, incumbent firms to address environmental impacts – to internalize negative externalities, in economic speak. Meanwhile, I had a secondary interest in the life-cycle dynamics of industries and had published some work on the role of innovation in disrupting industries and the potential for competitive shakeouts as technologies evolved within an industry. Yet, it wasn’t until I accepted a faculty position at the University of Virginia and took leadership of the Batten Institute for Entrepreneurship and Innovation that I fully embraced the complementarity of these two research streams. The lightbulb went off that perhaps we didn’t need big firms to address their environmental impacts as much as we needed those firms to go out of business, disrupted by new businesses with new technologies that were more environmentally friendly. This fundamental reframing has informed my work for the past decade-plus.
Adam: What do you hope readers take away from your new book?
Michael: Our climate challenge can be overwhelming. Our hope is that by breaking down the problem into its constituent parts, a sector-based approach helps provide a viable path to address our decarbonization imperative – to reach net-zero global emissions of greenhouse gasses by 2050 (if not much sooner). Central to our analysis is the role of technology and disruption. Markets can be incredibly effective in diffusing new technologies when they become economically viable. Yet markets do not operate in a vacuum. They are embedded in a broader institutional envelope that includes regulators, policymakers, activists, NGOs, financiers, universities, and others that all have influence on how market dynamics evolve and play out. We ultimately propose a comprehensive sector-based technology policy to advance decarbonized solutions. As we point out in the book, there is no silver bullet – we need to pull a whole host of available levers if we are going to have any hope in addressing our climate crisis.
Adam: What should leaders understand about climate change and why?
Michael: Climate change is the prominent challenge facing global society. The impacts of global warming include direct impacts like rising sea levels and increases in extreme weather such as hurricanes and droughts. If we do not mitigate our greenhouse gas emissions, these likely impacts will grow non-linearly. Scientists warn us that a 3 degree C warmed world could be significantly more fraught than a 2-degree world. I worry as much about the secondary impacts in such a world. Imagine 50 million Bangladeshis who live near sea level becoming climate refugees, seeking refuge in neighboring India, destabilizing the country, giving rise to an authoritarian regime, and rising tensions with nuclear-rival Pakistan. If this seems alarmist, just observe the Syrian migrant crisis in Europe and the crisis at the US southern border. This is why we title our book, The Decarbonization Imperative.
Adam: In your view, what are the key components of a winning strategy in today’s clean tech landscape?
Michael: To reduce our emissions to net-zero in the time frame needed, will require significant market displacement by clean technologies. There are many positive developments. Electrification of automobiles is accelerating along trajectories that suggests that a major disruption is afoot. This is being driven by significant cost reductions in batteries and holds promise that EVs will soon be preferable to internal combustion engines on current dimensions of merit (including price). Renewables such as wind and solar power have come down to a point where they are cost-competitive with alternatives such as natural gas generators in some applications. These trends are creating market opportunities, not only in the core technology, but related technologies such as smart grid systems, EV charging stations, and utility-scale storage. However, there is much work to be done. With renewables, the intermittency issue – the sun doesn’t always shine – is a significant hurdle to be overcome. There are certain sectors such as cement, steel, and petrochemicals that are going to require significant innovation to move towards decarbonization. Agriculture is a sector that I am particularly concerned about our ability to decarbonize. On the positive side, there are interesting efforts around vertical farming, precision ag, and clean meat. What is clear is there are enormous needs for new clean technologies.
Adam: How can leaders most effectively implement a transformation to move us toward decarbonization by 2050?
Michael: For business leaders, decarbonization needs to be viewed as a market opportunity. It will be driven in part by customers and policy. It will create opportunities for innovation and ultimately disruption of existing markets. For political leaders, this can be reframed as an opportunity to create the businesses of the future driving economic growth and job creation. Decarbonization can be a source of national competitiveness while simultaneously requiring positive coordination and partnership with other countries. For citizen leaders, this is about creating a better future that not only reduces the impacts of climate change but reduces a number of more localized impacts of fossil fuels that directly harm human health. Citizens have a huge leadership role to play in demanding that the products that they buy and the policies pursued by their elected officials align with a decarbonized future.
Adam: What do you believe are the defining qualities of an effective leader?
Michael: I believe leaders come in many forms. However, I would assert that effective, dare I say transformational, leaders share a couple of common traits. The first is a servant leader mentality. They lead in the service of others and towards some grander purpose than their own. Humility is one of the most underappreciated traits in a great leader. Humility is about having the confidence to allow others to shine, to be willing to listen, to recognize that you do not have all the answers. Braggards rarely, if ever, have the confidence to be transformational leaders. The second, highly related trait is integrity. Integrity is about living your values, in essence being truthful to yourself and others. Once again, transformational leaders require the confidence of knowing they are values-driven and that they are true to those values.
Adam: How can leaders and aspiring leaders take their leadership skills to the next level?
Michael: Listen. Seek counsel and feedback. Not only from those who you view as aspiring leaders, but from your colleagues, your acquaintances, those who work for you, and for whom you work. Everyone has a story. Everyone has something from which you can learn. My wife’s grandfather was a simple man. Never graduated high school. Spent his life working in the local paper mill. Every day, especially in retirement, he would sit on his front porch and dispense friendly greetings to passers-by. He was always prepared to lend an ear or even a hand in assistance when asked. Was he a leader? Could you learn something from him and the way he engaged the world? Absolutely.
Adam: What are your three best tips applicable to entrepreneurs, executives and civic leaders?
Michael: I am going to cheat and provide just one because I think it is that important. Simply stated, values matter. For entrepreneurs and executives, you cannot fall back on old bromides like the “purpose of business is to maximize shareholder returns”. That is a moral judgment, not a legal one. Entrepreneurs, executives and civic leaders all have discretion. They can choose what directions they drive their organizations. Yes, business leaders need to be responsive to the expectations of returns by the providers of capital, but that does not define the organization’s purpose. Your mission and values are your north star. They help direct the efforts of the organization and motivate people to join in those efforts. Seemingly impossible tasks only become real when guided by a vision grounded in an inspiring mission and values. Our Decarbonization Imperative requires transformational leaders that set a bold vision and compelling strategy built on a foundation of well-articulated values.
Adam: What is the single best piece of advice you have ever received?
Michael: I am tempted to say: if someone offers you a breath mint, accept it! More seriously, my advice would be: to be a student for life, to never stop learning. I have had the opportunity for the past decade to coordinate an undergraduate seminar led by the students. Each week a different student picks a topic, shares some pre-readings, and leads a discussion on the topic. We tackle everything from hot-button policy issues to cultural trends to the new horizons of science to big philosophical questions. I learn as much from those seminars as any student in my class. Being exposed not only to new topics but the passion and insight of my students opens my mind and allows me to continue on my own journey of discovery.
Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.
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