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Q&A: Teaching Strategic Innovation

Gary Lindblad, assistant dean and director of the MBA program, spoke with three professors on how the Merage School’s teaching method, stressing strategic innovation, distinguishes it from other business schools. Lindblad talked with Vijay Gurbaxani, senior associate dean for academic affairs and professor of information technology; Mort Pincus, professor of accounting; and Christine Beckman, associate professor of organization and strategy.

Q. Lindblad: How did the Merage School’s thematic approach of business education come about, and how did you decide on the themes of strategic innovation, information technology and analytic decision making?

A. Gurbaxani: Based on our knowledge of what drivers affect business today, we did a lot of research with senior executives, alumni and current students. We found key drivers that essentially enable companies to deliver and manage sustainable, profitable growth.

We identified strategic innovation because that’s what companies in developed countries must focus on in the global economy. Information technology is an enabler of innovation and allows workers to be much more productive and, therefore, more competitive at a higher wage level. However, information technology has made much more data and information available, and managers struggle with how to manage all this information. Our focus on analytic decision making derives from the availability of vast amounts of information.

Pincus: Our accounting courses worry about the volume of information. In my particular area of external financial reporting, we’re trying to understand how companies measure and communicate their activities, including their innovation, their growth plans and their productivity enhancements.

But we must do it in a way so we understand managers’ incentives for reporting and the discretion they have over measuring these activities. And we must do it in a way that conveys what they’re trying to do without giving away proprietary information. It’s a real challenge with all this information available, or being demanded on what a company is doing, while at the same time letting people know what the company is trying to do.

Gurbaxani: Right. It used to be that companies would take two or three months to close their books, then it reduced to a week, and now they may need to do it in 24 hours or less to be successful. It really speaks to the value of information technology. Since we have more pertinent information immediately available, decision making gets better and reflects the state of the business as up-to-date and accurately as possible.

Gurbaxani: So you focus much more on the decision making and much less on the information gathering.

Q. Lindblad: Why is it important that our MBAs develop their own point of view on the changes these influences are making on business today?

A. Gurbaxani: Business has moved from what I would call a fairly steady planning-oriented world, maybe a decade or so ago, to a much more rapidly evolving world. Many of the lessons of the past may or may not apply to the future. So, understanding how to react to these discontinuities is really crucial.

Pincus: The rate of change is unlike anything I’ve ever seen in my lifetime, and it seems only to be increasing. We’re trying to get MBA students to think rigorously, analytically, globally, strategically—and to be very flexible and deal with change.

Beckman: I think of analytic decisionmaking as knowing how to approach a problem, the questions that you need to ask, data that you need to collect and how you want to analyze it. It’s not a specific solution that we’re teaching, it’s a way of approaching a problem and thinking about a problem.

Q. Lindblad: How does this get incorporated into the classroom?

A. Pincus: In my financial accounting course, our perspective is looking at the company as a whole. Right away, most issues are strategic and big picture. Then we can drill down. So it’s not an accounting course per se, it’s an MBA course that teaches some accounting along the way.

As opposed to focusing primarily on teaching someone to be an accountant, we’re teaching the ability to talk to your accountant and understand what he or she is doing. And we’re teaching students how to communicate with other managers either in or outside the company about specific issues such as debt or equity, inventories or investments, stocks, bonds—a whole vocabulary of things.

Before they walk the walk, they’ve got to be able to talk the talk. We’re giving them that talk.

Beckman: A lot of innovation comes from diverse teams expressing different perspectives and encouraging you to think differently. It’s an important part of analytic decision making because you have to be able to defend your position, you have to come up with solutions as a group. That’s a big part of my organizational behavior class—teaching people to make decisions together, where students encourage fellow students to be more creative and more innovative in their solutions.

Gurbaxani: And if you think about the modern organization, teams become particularly important because they’re how innovation occurs. Often these aren’t just single-company teams, but they’re diverse teams from multiple corporations and multiple countries. How you foster innovation, build trust and work are critical.

Beckman: Yes, because the work is happening in a distributed fashion, say, in India, China and here. You’re managing people in three different countries in different time zones. It’s only when everybody’s working together that you end up with an innovative product or service design.

Q. Lindblad: Why is The Paul Merage School of Business a great place for students to grapple with these issues?

A. Gurbaxani: We're one of the very few business schools that confronts head-on the changes that the business world is experiencing. Many business schools continue to offer the traditional curriculum and we, by virtue of being in California – a hightech gateway to the Pacific and the world – deal with these issues much more squarely. The companies that surround us bring these issues to our attention frequently. The faculty here has always been thinking about these issues and being smaller, we’re able to deal with change more easily than some of our traditional competitors.

Beckman: The case studies we choose are very important in distinguishing the school. We pick up on the school’s themes in these cases. In my class, we discuss two cases on innovation. We talk about the organizational structures, reward systems that promote innovation and how technology changes management. We talk about how companies like eBay grew over time and how it’s sustaining growth.

The case studies are really an important way of learning, a way to develop analytic skills, because you’re trying to take all the data and come up with an assessment about how a company got to this point and where they need to go from here.

Gurbaxani: That's right. Everybody can say they do case studies, but our case selection is based on what we believe is important, and that helps define a particular direction for the Merage School. Our focus happens both inside and outside the classroom.

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