By Azra Brankovic, IESE Research Associate

What do we talk about when we talk about innovation?  We recently had a look at business school course offerings, faculty research, and other initiatives at top U.S. business schools and several European ones.  Full-time students, those going for an executive MBA, or those taking executive education courses will encounter the following four main areas of activity in innovation studies.  Innovation is usually defined as value-creation through the continual development of ideas, products, and processes.

Entrepreneurship and New Ventures

MBAs interested in starting their own businesses will find plenty of courses on developing and launching new ventures, including those specific to a novel industry context, a creative industry, or in technology.  Intrapreneurship – the development of new ventures within a corporation or the enhancement of entrepreneurial leadership inside established companies – is addressed as well.  New product development gets its healthy share of attention, and a number of schools have entrepreneurship institutes.

Sustainable Innovation: Services, Processes, Business Models, and Going Green

Reflecting today’s corporate focus on driving organic growth, innovation studies are increasingly diversified, moving beyond new product development to more notice being paid to services, processes, business models, and management innovation.  Concerns about globalization and commoditization have fueled the need for quicker responsiveness and building of distinctive competencies for competitive advantage.  While globalization and commoditization are issues driving a lot of the anxiety surrounding the need to innovate, few courses focus on leveraging local innovation; this tends to be addressed in faculty research.

As service businesses account for an ever-greater share of economic activity in the world’s leading economies, services innovation has been attracting more attention.  The focus is on “customer journeys” as they experience services, on technological innovation that aids service businesses, and on business model innovation that enables companies to break away from the constrictions of their current business models.

Sustainable innovation in the sense of focusing on “green” and socially responsible operations is a small but growing area in business school offerings.

Creativity, Marketing, and Design

Starting with the idea that creative thinking is a skill that can be learned, business school courses teach being creative oneself, managing creativity in others, and creativity linked to marketing.  Most courses offered are related to marketing – how marketing can be used to develop new value propositions, or how to manage creative people, aka the creative class.  Regarding creative thinking and coming up with breakthrough ideas and solutions, research on creativity has shown that diversity and multidisciplinary views result in greater creative output, encouraging companies to reconsider their corporate cultures.  Faculty research also examines issues such as individualistic culture versus teamwork.

Design is increasingly treated as an important element of innovation.  There is an effort to extend design considerations and thinking to other departments in a company, such as engineering and marketing, and to encourage collaboration between departments.  Some schools teach design, while initiatives deal with it elsewhere.

Learning from Others:  Customers, Competitors, Lead Users

Learning from others is a relevant topic in innovation today.  One element of it involves greater collaboration with companies and people outside the firm, such as suppliers, competitors, and anyone else who might have innovative solutions the company needs.  Courses address the challenges involved with tradeoffs and licensing issues.  Open innovation is exciting, as it can speed up solutions and the time to market of products that might otherwise be encumbered by process hindrances at large companies, as well as improve the utilization of ideas and technologies available externally.

Another learning-from-others approach involves looking to customers for insight on their needs, such as by observing their use of products, their experience of services, and their overall interaction with the organization.  By involving customers early on, companies get feedback earlier in the development process.  So-called lead users, who often make adjustments to or customize products in innovative ways, can be a rich source of innovation for companies.

Along with the move to more collaboration with people outside the firm there is a move toward more collaboration within companies, such as between different departments. This leads to relevant feedback being fed into the innovation process at an earlier stage, yielding more successful results.

Executive Education: Managers, Teams, Culture

While executive education courses cover many of the topics outlined above – such as driving organic growth, customer-focused innovation, co-creation of value, open innovation – they focus more on the challenges faced by managers trying to initiate or implement innovation, whether through launching new products or services or by reconsidering established processes.  Managing a team’s dynamics and trying to increase its creativity, getting the right mix of people and skills, building a culture that facilitates and sustains change – this is what executives are struggling with and the schools are busy helping them with.

Research at IESE
Current research and teaching on the topic at IESE is being conducted by Paddy Miller, professor of Managing People in Organizations.  Prof. Miller is co-authoring a book on how to develop creative cultures in organizations, focusing on the interplay of creativity, innovation, and improvisation.  Prominent in the area of innovation management is Tony Davila, professor of Entrepreneurship and Accounting and Control.  His publications on the topic include co-authoring Making Innovation Work: How to Manage It, Measure It, and Profit from It (2006) and editing The Creative Enterprise (2007).  Joaquim Vila, associate professor of Strategic Management, focuses on strategy and organizational design for innovation.  Bruno Cassiman, professor of Economics and Strategy, is active in the area of economics and strategy of innovation and innovation policy.

Whether you are learning how to think about innovation or grappling with how to implement it, there is a panoply of course offerings out there, in a reflection of the interest in and relevance of creativity and innovation today.

July 2008.  All rights reserved.

Advertisements