What Innovation in Business Education Looks Like

“Expectations about business education are changing.” These are the words of Betsy Ziegler, a year into her tenure as Kellogg School of Management’s first chief innovation officer (CIO). The creation of her role last year can be seen as one step in Kellogg’s response to the changing needs of students – and, indeed, the corporate world as a whole.

More than half of academic and industry leaders surveyed by IBM Education believe that today’s higher education fails to meet the needs of students, and nearly 60% believe it fails to meet the needs of industry. However, “business schools teach two things better than anyone else in the world,” according to Ziegler, which sets them apart from other faculties. Those two things are how to build strong organizations and how to leverage the power of markets.

Yet, in an analysis of around 500 business schools in the US, Ziegler recently noted that MBA tuition fees were rising at faster rate than post-MBA salary levels (+4.5% per year on average versus +1.6%, respectively). Plus, a recent survey by GMAC found that 53% two-year programs in the US had witnessed a drop in the number of applications they had received this year compared to last. So, how can business schools ensure they are adapting and continuing to deliver on these strengths to stay relevant? The answer lies at the heart of Ziegler’s raison d’être: innovation.

The rising importance of innovation in business in the ‘post-digital era’

We’ve entered the ‘post-digital era’, says a 2013 Deloitte report entitled CIO as Chief Innovation Officer – (as opposed to chief ‘information’ officer). This era is characterized by ubiquitous technology, with IT infiltrating businesses beyond mere doing, to the level of their being. Innovation in business has, according to the report, become integral for not only the effective operation of a business but for its actual survival. As a result, there has been more importance assigned to innovation, “as a legitimate and vital business process,” explain the authors. By extension, this is just as true for those who instruct on business processes, the business schools.

We’ve arrived at the doorstep of a market defined by, “instant, pervasive access to goods and services, tailored to individual needs, [and] often facilitated by asset sharing and distributed supply chains,” Ziegler explains.  This, then, is an on-demand economy and one which alters traditional learning as well as corporate environments and markets, arguably increasing the speed at which business schools must innovate.

The most successful schools, according to Ziegler, are those that are proactive, experiment, and take risks to fulfil their purpose of equipping the next generation of leaders with the skills they’ll need. At Kellogg, this means staying abreast of trends in business, in order to innovate around the changing needs of the market. 

After all, time is ticking. Two years ago, UC Berkeley-Haas’s dean, Rich Lyons boldly stated that, “half of the business schools in this country [US] could be out of business in 10 years, or even five.” Ziegler’s take is that, “the institutions that stand the best chance of success will be those that listen to the market.” So, what’s the market saying?

Business education needs to innovate by meeting individual needs of a diverse market

When Ziegler took up the post of CIO at Northwestern University’s Kellogg School in September of last year, she published a list of major trends affecting business education. Technology, to a large degree, was a common thread, which has given rise to increased mobility (virtual or otherwise), and opportunities for harnessing technologies to make business education not simply more relevant to business, but more relevant to each individual based on their specific needs and aspirations.

When asked what has changed in the last year, Ziegler says, “not the trends.” Instead, it’s, “how schools are confronting the trends by increasing experimentation and collaboration.” To Ziegler, as the original title of an article she penned on LinkedIn explains, ‘business schools must practice what they preach and teach’. In it, she explains that this means, “exploring greater use of technologies and data analytics that allow for mass personalization of academic programs; studying a growing number of alternative pathways to help people build skills and obtain jobs; and examining opportunities to collaborate among institutions.” 

Cross-functional thinking for MBAs, key to innovative problem solving

One approach Kellogg has taken to respond to the needs of the market is to adapt its curriculum (as indeed, we have seen at other leading business schools), by feeding off its knowledge of the increasing complexity of the current business landscape.

“We’ve evolved our curriculum to be more cross-functional, based on the idea that business problems are rarely, if ever, one-dimensional,” Ziegler explains. In order to enable students to study at the horizontal, the vertical, and at the intersection within this matrix (pictured below), the school introduced four ‘strategic initiatives’ a few years ago. These aim to bridge traditional subject areas (marketing, finance, etc.) with the skills Kellogg has identified as essential for an MBA’s future success:  Innovation, collaboration, customer service and public-private interface.

The Kellogg MBA’s 4 strategic initiatives

The idea behind these four lenses is that they provide a way for students, faculty and the school’s partners to look at business problems in a more multifaceted way, while integrating thinking from across academic departments to address emerging business problems in new ways. For example, as part of the Kellogg Markets and Customers Initiative, Kellogg has partnered with other schools at Northwestern to form a collaborative, cross-disciplinary investigation into the subject of trust, a line of inquiry that has gained a great amount of currency across both business and society in recent years. 

Bridging the gap between industry and education

Ultimately, this type of collaboration, with its increased exposure to a variety of industry and business needs, can surely only improve the content and delivery of programs, benefitting both students and the business education industry as a whole in the process. It ought also to be good for business.

Some big companies have long turned the crank on innovation with creative approaches to growth and product development, such as by externalizing R&D functions, supporting startups and starting venture funds. Business schools appear to be doing something similar, by increasingly looking outward to collaborate with corporate partners to offer more value to today’s businesses.

Corporations, for their part, are also increasingly looking to business schools to help them better prepare their employees. “Corporate partners not only continue to recruit MBA graduates, but also tap higher education resources to help their employees develop and evolve,” Ziegler explains, citing Arizona State University’s collaboration with Starbucks and AT&T’s employee development partnerships with Georgia Tech, the University of Oklahoma, and Notre Dame. As AT&T’s chief learning officer, John Palmer, has acknowledged, a more cooperative effort is required between corporate and education to better, “build the bridge from business school to business.”  

Ultimately, business schools seek to serve the business community in their mission to prepare the world’s future leaders – for the future. After all, in the words of Ziegler, “to be successful today, we need more education, not less” – and whatever form it takes, business schools can, and should be, at the forefront.