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Innovation at Business School

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By QS Contributor Updated Jul 19, 2014
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TopMBA.com asks Howard Anderson, senior lecturer at MIT to explain how innovation can be taught to MBA students who choose to specialize in the subject.

The business world is comprised of two kinds of companies – Attackers and Defenders. And they both need you – if you have the right DNA.

Think about it. No company has ever achieved ‘sustainable’ distinctive competence, the best any firm can do is to achieve some ‘temporary’ advantage. The only real asset of a company is its ability to innovate and build another advantage before its competitors react.

Which is great. It plays to your strength if you have the Innovation DNA. Do you? How do you know?

Think about this: all business strategy is based on the idea that you want to upset the status quo. If you are a Defender, you want to increase market share, improve the position of your brand, be the product and thought leader.

If you are an Attacker, you have no customers, no reputation, no installed base and perhaps a weak balance sheet. But maybe you can develop a global strategy early; perhaps you can figure a way to imbue your products with a self servicing application that makes it easier for the ultimate customer to use.

Business school criteria

Want a hint? Don’t go to any MBA school simply because of the professors. I have an undergraduate business degree from one highly regarded school, another degree from a second and have taught in some of the best in India, Russia, Israel, and the United States. Pick a school where you are not the smartest boy or girl in your class. Pick a school where there is hybrid vigor between technology and management, between local and international MBA students, between left brains and right brains. Pick a school where you will be sitting next to people who do not have the same background, or come from the same disciplines as you. You will learn from your classmates.

When I walk out of my classroom at MIT Sloan, the average IQ goes up. Think about it.

Now, here’s your question: Can innovation be taught or is it inherited? Answer: both.

If you have a spark, a great school can develop it. If you don’t… never mind.

Here’s another hint. We don’t ‘teach’ anything, you learn by discovering. Instead of a silly lecture about ‘globalization’, we will send you to a different continent with a team to solve a logistics problem. Instead of lecturing about what an entrepreneur is, you will come up with your own idea, form your own team and build a company. If you are at a school that does not do that: demand a refund!

Most people are going to get an MBA because they want to change their careers in some way – either going to a different company or pick a different skill set, right? If you are going back to that same job, just getting your ticket stamped, stay at home. An MBA program is too long, too hard, and too expensive for just that.

Innovation in business

If employers could isolate the illusive ‘innovative’ gene, they could bypass the whole interview process and just have you submit a lock of your hair, they would. But no one has yet figured that out, so companies do the next best thing - they look for people that can combine innovation with experience to find better ways to do things. Innovation cannot just come from delivering products or services; it may be in logistics, in financing, in marketing. It may be in organizational design or a better way to package.

Two points. You may someday want to start your own company, as many of our MIT Sloan students do. Here’s a hint: make sure that all of our starting team is as good in their jobs as you are in yours – as innovative, as committed, as uncompromising. Then, as you grow, you can demand that they also do not compromise.

That is how great companies are built. If no company has a long term strategic advantage, then a company’s only real asset are the innovative people who will find better ways.
Second hint: The real advantage of someday starting a company or being on a starting team: you will never use all your talents again as intensively as you do in a startup.
Business is an exciting and evolving three dimensional multi-user game. You are going to love getting your MBA. Welcome to the club!

Howard Anderson is the founder of The Yankee Group and the co-founder of Battery Ventures. He holds the William Porter Distinguished Chair at the Sloan School of Management, Massachusetts Institute of Technology.