On Innovation: Professor De Meyer of Judge Business School

Professor Arnoud De Meyer, Director of Judge Business School, University of Cambridge gives us an insight into the world of innovation.

Professor De Meyer has been working on the topic of innovation for over 25 years and his knowledge is both vast and impressive. With extensive experience in both the Asian and European markets he has the international background that allows for a very open minded, open cultured mindset.

Innovation is is a topic that you're quite familiar with, is that correct?

Yes, I have been working on this topic for more than 25 years. In fact, I came out of industry more than 25 years ago to do a PhD precisely to study how to better innovate in large organizations, and since my PhD I have been working both with companies and research, and have been teaching about innovation with lots of MBA students and executives. When I started in this field there were not that many people that were convinced you could manage innovation. Very often people were saying that innovation was almost equal to imagination and creativity and that you couldn't really manage these. People were talented for doing that, or they were not talented for doing that, and that you needed also a lot of luck to be able to be innovative. But over the time we've learnt that it's actually, I wouldn't say easy, but that it is possible to improve your chances of being successful. You always need a bit of luck, but there are probably four big areas in which one can work to increase the chances of being successful with innovation in an organization.

The first area is that of stimulating imagination and creativity. What we know from lots of studies about creativity is that quite a few people have the potential to be creative, but it's actually more trying to create the right environment that stimulates that creativity. I sometimes say, jokingly, if people are constantly under threat, and they have to keep their job, and they have a mortgage, they don't take risks anymore, because they don't want to lose their job, and they will stop being creative. But you can help them if you give them the opportunity to make mistakes sometimes, and recover from those mistakes, and to mentor them, they probably will deploy much more of their creativity, so creating an environment to be creative is the first way of stimulating innovation.

The second one is that, and now I'm talking more about business organizations, that innovation is also driven by a very clear strategy. The organization needs to know where it goes, in which kind of market it is, what kind of projects not to do, sometimes it is more difficult in innovation to say no to an opportunity than to actually pursue some opportunities. But it's important that senior management of an organization is very clear in what it wants to achieve, in what direction it wants to go, and is good at communicating that. So that is a sort of second area that is important.

The third area that is important is project management. Edison already more than 100 years ago, at the end of the 19th century, said that the invention was 2% imagination, 98% perspiration. The 98% perspiration is hard work in project management. We've learn a lot in the last 25-30 years about how to improve the way we manage projects, how to be faster in delivering the results of an innovation project. So this whole area of project management and the integration of the organization around that innovation project is a third area where we really can improve our chances for success.

And the fourth area has to do with what I would call knowledge management and perfection of your knowledge. You also create a lot of intellectual property, and it's important that you manage that knowledge, and that you at the same time find ways of protecting yourself. That may be patents, but it may also be brands, or trade secrets, or other ways of protecting yourself. The better you can protect yourself, the better you can benefit from your innovation and get the rent on your investments. So, you can manage innovation and we've learnt a lot about those four areas.

Could you talk a bit about how you actually teach innovation at the Judge Business School?

Innovation Management here is a core course, so a compulsory course for all MBA students, and basically, through a number of case studies, small projects and discussions, we try to help the students understand what the drivers are of innovation in an organization. We have two aspects to it: first of all, how you create the value, how you create a new product, a new idea. There is a second aspect to the course which is how you capture the value; it's more strategic thinking, how you protect yourself etc. and how you capture the value out of your hard work. Of course, there remains I a bit of theory in the sense that we give them concepts, and ideas about how to manage innovation. We look at particular case studies from all over the world, from Asia, from the United States, from Europe, in different industries, the service industry, the luxury goods industry, and also the high-tech industry. So we give them examples, and then we hope that students at the end have a good conceptual understanding of what innovation management is all about.

We then have a number of projects. The MBA program here at the Judge Business School has several types of projects and Cambridge venture project with a small organization, one of the high-tech organizations around Cambridge, or a global consulting project, or an individual project. Some of the students will take that learning and apply it in their projects and that's where then we can provide some mentoring to help students to actually apply these concepts. So it's sort of a balance between on the one hand, providing them with the concepts and on the other hand, giving them the opportunity to experiment with it a bit.

As you were talking earlier about the idea of an environment that allows people to experiment, it sounds like that's exactly what you do.

Yes, I think that's one of the greatest advantages of a good MBA program (also an EMBA, for that matter), that is that the classroom, the whoe environment of the business school and also, the project work, the small group work is constantly putting you into a business situation, but without the risk of a real business situation. You can try out things, and say, "let's experiment with this". If it doesn't work you will not be fired, actually we will encourage you in the business school to make a few mistakes, because one learns as much from mistakes as from success usually, but let the student discover what the consequences of the thinking could be, and experiment with it, simulate with it.

What do you think innovation means in the corporate world, why is it important?

You could almost use the metaphor of life. People always say how sad it is that people have to die, because that's the way we can have other people get born, right? We renew ourselves. It's the same with corporations, I think.  Corporations have a natural lifespan and they are built around a project, or a product and a service, and those products and services will get born, be successful, and probably will die out. It is important for corporations to renew themselves, not only renew themselves in the products and services that they bring, but also in the way they organise themselves, have to renew their value proposition but also their process fee. And I would say that innovation is probably one of the key elements of sustainability of any organization.

When you look at an organization, whether it's a small entrepreneurial organization or a large multinational, innovation is at the heart of what management needs to do. It's probably one of the most important challenges, but also one of the most important requirements for any good manager. And from my 25 years experience with business schools I've seen that this precisely is a job, managing the new business development, the renewal of the organization, for which MBAs are actually good candidates. When I look at where our MBA graduates go, yes, of course they go into the financial institutions, into consulting perhaps, and quite a few of them go into industry, but very often they go into industry in jobs of new business developments that may be setting up shop in a different country and very often it's also for the start of new activities, new products, new services, new businesses. Even in the financial sector, I very often see that people use, or rather companies use, our MBA graduates to stimulate innovation. So, it's from this observation that quite a few of our students go into those types of jobs that I think it's important that a business school teaches and gives the concepts about what innovation is all about.

What do you think about people who have already achieved executive status? Can they then learn how to be innovators, or do you think they are already set in their ways?

Ahhh... you hear me somewhat hesitating. Let me be straightforward on this: There is a risk, the risk that you mention of being set in your ways when you're 35, 40 years old and you do an executive MBA. But I would say that there are two positive elements that one has to stress about Executive MBAs. First of all, you get a lot of people in a classroom with very different experiences, and if you teach well in an Executive MBA program, you are able to, as a professor, as a teacher, to draw on that experience, and combine it and try to conceptualise it. Very often when I teach executives, I always say, although I have 25 years experience, in front of me I have perhaps 25-30 people with each 15 years of experience, so there is a lot more experience in the classroom. If I can pull it out of them, and help them with my capabilities, knowing the literature, knowing what else has happened, being able to pull it together and conceptualise it. What I do with executives is give them the confidence that some of their experience is not idiosyncratic, but can actually be repeated. But the good news is that when you're in a good Executive MBA class, you have so much experience, so many different views that people start learning from each other. And adults learn more from discussion with each other than from a teacher. I think this is one of the characteristics of adult learning. If we can manage that debate very well, people will start picking up new ideas, and say, "well, I have my own set way, but now I've listened to this person from a very different industry and he or she seems to have the same problems, and has solved it totally differently, maybe I should start thinking about it." So it's by the confrontation of ideas in the classroom; if you manage that process very well, people will get uncomfortable with their own set ways, and what we often do in an Executive MBA program or an MBA program is make people a bit uncomfortable, force them to look at the issues in a different way, shake them up a bit. But we can do it because, as I mentioned earlier on, we are working in an experimental environment where if they take a risk, if they do something totally new and it doesn't turn out to be perfect, there is no consequence to that risk-taking so they learn. In that sense I think there are two elements: the confrontation of ideas that shakes people's confidence, and then we ourselves will often have techniques, such as role-playing, to shake them up a bit.

You spoke about being in a comfort zone. Do you think that innovative thinking is simply a question of expanding your comfort zone and confronting the non-conventional?

It is an element of that. I would say that innovation is very often trying to think the unthinkable, see what kinds of customer needs are not currently met. Understand why some customers are not your customers but go to the competition, why they are 'non-customers' for you. Indeed, that means that you actually go beyond your traditional comfort zone where you feel that you understand everything, where you work with trusted customers etc. It's doing or thinking the unthinkable and implementing it. In that sense, yes, it is getting out of the comfort zone. And maybe that's what we teach people a little bit, that as a good MBA graduate you should be able to take risks and get out of your comfort zone, and have the confidence to do so.

So, in general, do you think that being in the classroom provides that environment to kindle innovative thinking?

I don't like the word classroom here because that's only one element of it. It's the whole environment of a business school. The classroom is an important element, the discussion, but it is definitely also the small group work that many business schools have and the project work, as we have here, where you try to apply what you are doing. In the particular case of Cambridge University, it is probably also the college system, whereby our students, after a long day of work, can then go back to their college, where they will interact with people from other departments - engineering, divinity, history, archaeology, medical sciences - where they actually see how they are learning about businesses perhaps relevant to these other disciplines. It's the whole ambiance that we try to create within the business school. The combination of classroom teaching, which is important, the group work, the individual preparation, the projects, the interaction with the rest of the university. That whole environment is what I think involves innovative thinking.

I love that idea of sort of having a touch-stone in each of the other different areas that are at the university as well, I wasn't aware of that within Cambridge, that's wonderful!

Yes, it's probably one of the unique aspects of a collegial university. One of the things, for example, that we also do in relation to innovation, is that we have a centre for entrepreneurial learning which organises every Tuesday evening, 12 Tuesdays over the year, a lecture by an entrepreneur who will come and talk about what they've been doing. It's a structured series of lectures, because it starts with 'where do you get your idea from?' and it goes up to 'how do you grow the business?' but that is something that we offer not only for the MBA students, but also for engineers or people from all over the university. Obviously we throw in a bit of networking cocktail afterwards, a beer and a bit of wine and a bit of juice. So people start talking to each other, and hopefully somewhere two or three people will meet each other, find each other, and set up a new business.

So, for the people who aren't entrepreneurs, once they leave your business school and they have to go back to the workplace, do you think that corporations expect them to be coming back with innovative ideas, that they're now expected to be innovative at the workplace?

I do think so. My view on this is that being an entrepreneur is not a binary issue, it is not 0-1, it is not 'you are an entrepreneur, or you are not an entrepreneur'. I think we all have a bit of entrepreneurship in ourselves, and some have a lot - on a scale from 1-100 they have 90, 95, and will set up their company immediately. Some of us don't have a lot, maybe we have only 20, 25, and that may be because of our personality, because of the constraints of our family, or whatever, but I think that we all have some entrepreneurship. In fact I think that for most MBA students, particularly in schools where you have experience before you do an MBA, taking the step to go back to school after you have worked 5 years is already an indication that one has a bit of entrepreneurship. It is actually a risky thing to do. So we all have the potential of a bit of entrepreneurship. Many of us don't have enough entrepreneurship to go and set up our own company, but we will go into an organization. These larger organizations need that, what we call corporate entrepreneurship, or what others have called 'intrapreneurship', the entrepreneurship inside the organization. Large corporations need that to renew themselves, as I said before, large corporations constantly have to do this, and what they really expect from our MBA graduates is the ability to bring some of that entrepreneurial thinking within that large organization. In a large organization you share the risks - it's not my personal risk anymore, the corporation underwrites the risk, but it still expects from me as an MBA graduate, taking on a job in new business development, that I will take some risks, together with the team within the company where you're working.

I do really like that idea of intrapreneur, because many people as we said, I don't know if it's courage or life circumstances, don't always allow themselves to go out and create their own business. But they can create a minibusiness within their company.

That's correct, yes. I probably would not have had the courage when I was 25 or 30 years old to set up my own business. And also, in the end, I was very intrigued by research and being an academic, so I've pursued that career. But because I like innovation and also entrepreneurship, I've always taken on the challenges that my own school's offered me, or helped some of my students or friends who are entrepreneurs in developing their business. Sometimes it worked and sometimes it didn't. I have had to liquidate companies and it was part of that but I learned a lot from it. It was never my main business because I am not a full-fledged entrepreneur. I perhaps have 50%, on my scale from 1-100, just enough to help other people that take the risk, but it's quite worthwhile for them to have somebody who shares some of the risk.

Do you think that innovation and leadership go hand in hand?

They're two different things, but they go hand in hand. Innovation without leadership is not possible, and leadership will stimulate innovation, or has to stimulate innovation, it's one of the purposes. They do really go hand in hand. I do think, however, that the type of leadership that is needed for a very innovative company or organization, is somewhat different from traditional leadership as it was described perhaps 10, 15, 20 years ago. Meaning if you work with entrepreneurs, if you work with MBA graduates who really want to develop something new, they very often are people who don't like too much hierarchy, they want to be autonomous, they want to work in networks. And the leadership that you need to stimulate innovation is more of the type of what we call collaborative leadership, working together, getting things done, through a community of people; leadership that exerts itself by convincing people, by seducing people into doing things, not by commanding control. I don't think that command and control or very traditional leadership really leads to innovation. So, yes, innovation and leadership go hand in hand. Innovation without clear leadership cannot work, it would go all over the place. Leadership needs to stimulate innovation, it needs to create that innovation, but it's a particular type of leadership, it's collaborative leadership.

Do you have any final words or ideas for people that may be considering an MBA or an Executive MBA about innovation? What could they get out of pursuing an MBA and how could it increase their innovative thinking?

The advice that I would give for potential MBA students would be, firstly, be very ambitious about the place that you want to go to, because you're going to learn more from your colleagues in the program than from the faculty. The faculty is very good in conceptualising and helping to structure your own ideas, but the learning that will destabilise you, and that's what you look for in a program, a bit of destabilising knowledge that gets you out of your set way, that learning will very often come from your colleagues. So be ambitious so that you can belong to the group that you consider to be the best group that you should be in. Secondly, if people are really interested in innovation, I would suggest to them to go to a place where they can interact, not only within the business school, but beyond the business school, a place that offers them the opportunities to sample how business and management is applied, or where it could have relevance. So that's the second advice: look for a business school that allows you to apply and experiment with the concepts that you learn. And the third suggestion that I would make is that if you choose a business school, choose a business school where you see that there is a strong research background. If you a confronted with a faculty that are still doing a lot of interesting research and bringing that research in the classroom, and discussing that research in the classroom, you get a daily confrontation with what innovation is all about. It may be then academic innovation, it may be innovation in terms of research in the subject of management itself, but, it helps you shape your ideas if you can discuss research with faculty, if you see that faculty is actually uncertain about what they're saying, because they are still exploring some of the latest ideas themselves. So that would be my advice to a prospective student. Be ambitious about the place you go for so that you have the best co-students. Two, go for a place where you can go beyond the business school, and three, go for a place where there is still a strong research culture.