Setting off Sparks

Four business school professors explain how they define innovation—and how they encourage innovative thinking in the classroom.
Setting off Sparks


Christian Terwiesch, Professor of Operations and Information Management Co-Director, Mack Institute of Innovation Management The Wharton School University of Pennsylvania in Philadelphia

An innovation creates value by providing a match between a need and a solution. This definition might appear somewhat complicated, but I find it useful because it breaks innovation into three parts.

First, it reminds us that innovation, unlike invention, goes beyond novelty. It must create value, either in a financial or altruistic form. Second, it points out that innovation must be customer-focused; a solution is useless unless it addresses somebody’s specific need. Third, it uses the word “match” to underscore innovation’s powerful ability to recombine elements. Innovation can take an existing solution from one industry and deploy it to meet, or match, an existing need in another.

Innovation plays a critical role in the field of business education. One reason is that we teach it as a subject to students who want to become entrepreneurs, help organizations drive organic growth, or launch careers in tech companies. A second and more recent reason is that our industry is rapidly changing, and we must innovate our own delivery systems if we’re going to serve our undergraduate, MBA, and executive students.

The key driver for this change in education delivery is the emergence of massively open online courses. We have actively supported MOOCs at the Wharton School, and as of August, our four Wharton Business Foundation courses have attracted more than 1 million students.

Anyone who doubts that MOOCs can be transformational in students’ lives should know the story of Ankit Khandelwal, a young man from India who dedicated two years of his life to taking MOOCs from Wharton, MIT, Yale, and other institutions. His goal was to use MOOCs to create a personalized program he calls “Envisioning the 21st-Century Global Manager,” as he was determined to provide himself with the skill set of such a leader. He found the online discussion forums particularly useful, he told me, because “studying with so many bright-minded individuals around the globe was very exciting.” He also said that MOOCs “helped me exceed my own expectations and reinvent myself by providing quality education even when I was sitting more than 10,000 miles away.” He discusses his educational journey on his website at

Despite the benefits of MOOCs, administrators at some schools worry that free online courses will cannibalize their highly successful academic offerings. To allay that concern, I find that it’s helpful to return to the original definition of innovation as something that creates value by providing a match between a need and a solution. Our students have a need: They want to acquire business knowledge. While a business degree is one solution, a MOOC offers an alternative. Since a MOOC is free and does not require students to take time off from work, it also creates obvious value for participants. So if “feeding students knowledge in a lecture hall” were the only value that traditional schools provided, we would indeed be threatened.

However, MBA students come to traditional business schools to fulfill an array of other needs. They want to establish credentials, join extracurricular activities, develop social networks, learn to manage their careers, and enjoy great learning experiences. When business schools focus on knowledge delivery alone, they risk dismissing those other critical student needs—and those needs offer many additional opportunities for innovation.

Remember that recombination is one approach to innovation. The best way for business schools to go forward might be to carefully explore how other industries have fulfilled individuals’ needs for credentialing, creating social networks, and developing their careers. It might be time to look outside the academic setting for true innovation.


Carlos A. Osorio, Director, Innovation and Entrepreneurship Program Adolfo Ibáñez Business School in Santiago, Chile

At Adolfo Ibáñez, we view innovation as both a result and a process. Considered as a result, innovation can be any new or nontrivial change in our products, services, or processes that solves worthy problems or meets needs and creates payback for the innovators. Considered as a process, innovation is the discoverydriven journey by which a team chooses a challenge and generates an innovation by solving it. Innovation is a social process that’s all about impact; it’s where the humanities, economics, management, and technology meet.

Our university was founded about 60 years ago to create impact on the Chilean industry, and we measure ourselves against that mission. More than a decade ago, we started looking at ways to incorporate innovation into the curriculum.

questions: How can we achieve results similar to those in the U.S. and Europe? How can we foster innovation-based value creation? And driven by AACSB standards, how can we assure learning? We believed we could teach our students how to create value within both startups and corporations by helping them understand the innovation process, investments and patents, and other topics.

But we didn’t just want our students to learn about innovation; we wanted to prepare them to actually innovate. Because we focus on enabling learning and building capacity, we emphasize activity and project-based learning. We have experimented for more than a decade to refine our educational process, using our courses as laboratories.

Along the way, we’ve learned some interesting lessons. For instance, people fail at innovating when they cut corners, when they search for “great ideas,” and when they can’t cope with high levels of risk, uncertainty, and ambiguity. Innovators don’t just have to put in long working hours, they must do so in emotionally difficult environments.

Therefore, we take our undergraduate, graduate, and exec ed students out of their comfort zones, because the magic happens in unfamiliar places. For instance, we’ve created a “personal innovation” course, managed by a psychologist, an actor, and a plastic artist. Adults are often insecure about their abilities to draw or paint and shy about acting or making presentations in public. But on innovation teams, people need to communicate visually and verbally, and they need to be comfortable in places where they don’t think they have the abilities to perform. The three professors help students overcome their fear of failure in these areas. This is only one of the methods we use to nudge students out of their comfort zones.

We also generate an environment of high perceived risk and uncertainty. While students receive feedback about their work, they don’t know their grades until the end of each module. Whenever they ask professors how to approach a task or design a deliverable, they hear: “Talk to your team. You’re supposed to deal with ambiguity.” In addition, we let them know change can happen at any time and in any area: deadline, content, information. When students from the fourth generation of our master’s program set out on their international seminar, they didn’t know until they were at the airport where they were flying or what companies they would visit.

Students in the master in innovation program must write theses by assembling a set of real-world challenges, evaluating them, choosing one, and then solving it by generating an innovation. This is hard; the most common question each team faces is, “Where is the innovation?” Students have written theses on mining, energy, poverty, education, defense, and the food industry.

One way we measure the success of our program is through the impact our graduates have had, and we think it’s profound. Nearly 100 alumni have graduated from the master’s in innovation program. Among them, they’ve created innovations that jointly have secured investment for more than US$10 million and produced 11 patents, and they have started up 15 new companies and ten corporate ventures. One of these startups, Innovaxxion, became the second- largest patenting firm in Chile in four years. An alum working for Arauco—a Chilean timber and forestry firm—helped the company become a poster child for innovation by using applied research to design Vesto, an antibacterial plywood, and AcercaRedes, a community-based social innovation project. The company is now a finalist for AVONNI, the Chilean national innovation award.

Our master in innovation program has just enrolled its seventh generation of students; the sixth generation is finishing its coursework, while those in the fifth are finishing their theses. We are hopeful that they, too, will use what we’ve taught them to inspire innovation and make an impact in the business world.


Anne de Bruin, Professor of Economics Director of the New Zealand and Social Innovation and Entrepreneurship Research Centre Massey University College of Business in New Zealand

Innovation is multifaceted and occurs in various forms, but it’s most commonly considered from the mindset of product innovation. I often find that the many forms of social innovation—which include collaborations between stakeholders and the community—are not commonly perceived as part of the innovation landscape.

I believe we need to embrace a more holistic perspective on innovation, and one that uses a problem-solution lens. Therefore, my definition encompasses both economic and social value creation: Innovations respond to problems and unmet needs in areas of economic and/or social value, and they involve the application of new ideas and processes or the reapplication of existing ideas in new ways.

A collaborative approach is usually necessary for creating solutions that bring about societal change, and b-schools are essential collaborators. In 2010, the New Zealand Social Innovation and Entrepreneurship Research Centre (SIERC) was established at Massey University’s College of Business to provide a hub for interdisciplinary research and community engagement in social innovation and entrepreneurship. It pools the expertise of three Massey campuses, bringing in scholars who work in disciplines such as economics, management, marketing, sociology, and psychology. SIERC associates also collaborate on ongoing projects with external affiliates.

To enable scholars and community members to share knowledge, SIERC provide several forums. These include two international conferences that have brought together social innovation and entrepreneurship stakeholders. For instance, in a special session in our 2013 conference, participants examined how nonprofits and community trusts exhibit resilience and adaptability. To increase the impact of our conferences, we make the proceedings free to access online.

SIERC associates also collaborate with practitioners to get social enterprise ideas off the ground. Our most recent collaboration is with Akina Foundation, a charitable trust. We will help assess what impact there has been on the individuals who have participated in Akina’s “Launchpad,” which helps teams develop their big ideas. Launchpad is a perfect example of a cross-sector collaboration, because it involves not only A¯ kina in the community sector, but also Contact Energy from the private sector and the Department of Internal Affairs from the government sector.

Via SIERC, Massey University has signed a memorandum of understanding with Akina to collaborate on research activities and work together on case studies of Akina’s program participants.

SIERC also is generating a series of case studies designed to lead to a deeper understanding of social innovation. In our first case on the Wellington Zoo, three colleagues and I studied how entrepreneurship and innovation are necessary to build the value of the community assets that are under the zoo’s guardianship. However, as an interviewee stressed, “We walk a tightrope between commercial and community concerns.” We also investigated the zoo’s annual reporting structure to determine how accountability works at organizations that receive public funding. Accountability can get overlooked when strategy and development are guided by social need, so we promote best practices in social responsibility and environmental reporting.

New Zealand’s eight universities have a statutory obligation under Section 162 of the 1989 Education Act to “accept a role of critic and conscience of society.” At SIERC, we interpret that as a directive to innovatively mitigate today’s complex social and environmental problems through research, partnership, and cooperation. We believe it is a worthwhile goal for all b-schools to partner in collaborative efforts that usher in the next wave of global innovation.


Yossi Feinberg, John G. McCoy-Banc One Corporation Professor of Economics Director of Stanford Ignite Stanford Graduate School of Business in California

For business leaders to have impact, they must be able to define needs and uncover new ideas, and then move projects forward. In other words, they must be able to think innovatively. But how can business schools partner with executives, future business leaders, and nonbusiness professionals like engineers to ignite innovative thinking? I believe there are three answers. First, reduce fear of failure by teaching people to assess risk. Second, nudge people out of their comfort zones by empowering them to think broadly, develop empathy for users, and create tools for execution. And third, utilize technology in pursuit of both of these goals.

There is no single right way for business schools to teach skills or deploy technology. But at Stanford Graduate School of Business, we have developed teaching methods designed to help students master both innovation and execution. For instance, various courses in our MBA program teach a step-bystep prototyping process in which students brainstorm ideas, conduct user interviews, and consider a broad range of possible solutions before finalizing a strategy, service, or product. We actually put students out on the street to interview passers-by about product or process ideas. This helps them develop probing interview skills and develop empathy for users, which leads them to link innovation to an actual need.

We’ve also found ways to use technology to bring our brand of education to audiences around the world. We believe that technology not only can revolutionize the classroom, it can drive economic growth around the globe, especially in emerging markets of innovation.

Those have been two of our goals with Stanford Ignite, a part-time program aimed at working technical professionals and graduate students. Classes are made up of physicians, scientists, engineers, bio-engineering PhD students, and others who need to learn the business processes that will allow them to commercialize their ideas.

We started Stanford Ignite by holding nine-week evening programs and four-week full-time programs on our campus in California. Then we expanded to Bangalore, India; Santiago, Chile; Paris; and Beijing. While some of the courses feature in-person teaching, we also use high-definition live video technology to beam faculty to those locations. We take a high-touch, high-impact program and distill it into a condensed format that is portable and flexible—and that changes lives, no matter where in the world students are when they enroll in the program.

I’ve been stunned by the incredible solutions, with impact on real people, that have come out of the program. For example, electrical engineer Sam Mazin co-founded RefleXion Medical, now a venturebacked company developing a biologically guided radiation therapy system that more accurately targets solid tumors in the body. Mechanical engineer Lee Redden co-founded Blue River Technology, which uses computer vision and robotics to build agricultural solutions that aim to dramatically increase yields and move industrial farming toward plant-by-plant care.

Then there’s Australian Jenna Tregarthen, a clinical psychologist whose close friend suffered from an eating disorder. She created the mobile app Recovery Record that helps people with disorders monitor food intake and offer anonymous, round-the-clock support. Since it launched, nearly 200,000 individuals have completed 6 million therapeutic assignments designed to derail unhealthy urges.

Teaching people how to bring their ideas to life is what gets me up every day. It’s the ultimate impact of management education.