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Business Schools Seek To Teach MBA Students Innovation

Academics are increasingly trying to teach MBAs “innovation” – a concept embraced by entrepreneurs and companies. But there are concerns that business schools stifle innovative thinking.

Wed Nov 19 2014

Thom Yorke is at the forefront of the music business’s digital evolution. Radiohead’s frontman, who is adored by Britain’s music lovers for being the voice of the five-piece rock band, is keen to make a profit on his latest solo album. 
Instead of selling his hits through old-age distribution platforms or streaming services like Spotify, the vocalist has uploaded his songs on BitTorrent, the peer-to-peer file sharing network.

The artist’s idea to market and sell music on a P2P platform, however, came from a cadre of MBA students.

Ryan Kroening, Phil Barry and Steven Lundy, students at Oxford’s Saïd Business School, consulted with Radiohead’s management team on the experimental release that uses BitTorrent.

As well as providing cash for the rockers’ managers, the result shows that business schools’ quests to innovative their decades-old education models by encouraging MBAs to think outside of the box may be bearing fruit.

“We studied innovation in business and spent a lot of time thinking about how and why start-ups are able to outperform established companies,” said Phil, a musician who runs his own independent record label, Kicking Ink Recordings.

Academics are increasingly trying to teach MBAs “innovation” – a concept embraced by entrepreneurs and companies seeking to become the next Google, Apple or Facebook.

It has led to the formation of dedicated innovation centres on schools’ campuses, as well as electives trying to foster innovative ways of thinking and to spur students to launch entrepreneurial ventures.

Analysis two years ago by accrediting body AACSB that involved 733 business schools found that 28% of them included the words “innovative” “innovate” or “innovation” in their mission statements.

But many big-ticket entrepreneurs think that academic institutions stifle innovation, and some large global companies question whether the concept can even be taught.

Frances Illingworth, global recruitment director of WPP, the world’s biggest advertising company, said: “I don’t think innovation can be taught... Innovation comes from the culture of the business, the leadership, the way people work together. It’s not something you can tick off a list.”

This has not stopped schools across the world launching innovation centres, however, to try to instil the idea in students’ minds.

Frances points out that London’s Imperial College Business School has a department of Innovation and Entrepreneurship, which is described as a centre for international research excellence, rather than a place of learning for MBA candidates.

Warwick Business School of the UK, on the other hand, has an Entrepreneurship and Innovation group, a teaching and research clutch that focuses on creativity – among other themes – in the public and private sectors.

Tamara Freidrich, Warwick associate professor of entrepreneurship and innovation, said the group teaches strategy to MBA students as well as trying to bring a “social aspect” to their learning.

“Business schools realise they need to produce students who can start businesses,” she said, although even in a corporate environment there is room to be creative.

Across the Atlantic, MIT’s Sloan School of Management has an Entrepreneurship and Innovation track within its MBA, where students can learn about start-up business concepts and leverage the school’s entrepreneurial ecosystem.

Canada’s Sauder School of Business at the University of British Columbia runs a similar track of the same name, which is designed for entrepreneurs who want to launch start-ups – or for “intrapreneurs” who drive ventures within a company.

“Our program has always placed importance on entrepreneurship and innovation,” said Laura Rojo, Sauder director of recruitment and admissions.

Between 11% and 15% of MBA students opt for this track and the school has a $15,000 scholarship which offers students half the amount of grant money in seed-funding to help them launch companies.

Executive education programs – short, customized courses sold to corporations – are also trying to package innovation.

This month a group of executives finished a course at Dartmouth’s Tuck School of Business in the US that is designed to help companies grow through innovation – “Leading Innovation: From Idea to Impact”.

The $11,500 program lasted five days and has drawn participants from Deere & Company, the listed US manufacturing giant, and Medtronic, the world's fourth largest medical device company.

But Frances at WPP said that the “issue” with business schools and innovation is that institutions need to demonstrate the quality of their graduates through qualifications.

“We are dominated by quality of qualification, rather than teaching,” she said.

But business schools’ efforts to try to teach innovation may be the result of increased demand from students as much as from faculty.

A new report examining the views of “millennials” – people born between the early 1980s and late 1990s, who populate most MBA programs – captures the growing significance of entrepreneurship on an international scale.

Authored by Soushiant Zanganehpour, a consultant at Saïd Business School, the report draws on a survey of opinions from 2000 young professionals, 40 business leaders and 500 social entrepreneurs.

It found that 87% of young professionals say they are motivated to work for companies that create some kind of positive social impact, rather than those focused solely on turning a profit. It echoes a similar study released last week by INSEAD, the global business school.

Soushiant said that their mind-sets may fuel a rapid transformation of social entrepreneurs from a relatively narrow group of “innovators”, to their views impacting business culture more broadly.

Back at Oxford, Ryan said that through his strategic consulting project on BitTorrent he was able to take inspiration from the musicians’ risky sales strategy.

“We were able to witness first-hand the success Radiohead has had by continually innovating outside of the major label system,” he added.