Tomorrow’s B-School? It Might Be A D-School

AUGUST 1, 2005

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Tomorrow’s B-School? It Might Be A D-School 
Business schools are hooking up with design institutes — or starting their own 

Just a few days into an executive management course at Stanford University’s Graduate School of Business, Margaret J. Miller, a senior economist at the World Bank, found herself sitting at a table wearing heavy leather gloves and vision-obscuring glasses, trying to figure out how a person with a physical impairment might experience the process of wrapping a gift. The goal of the five-day Managing Teams for Innovation & Success (MTIS) course: to see the experience through new eyes. “With a few basic tools — just craft materials, really — people could actually start to think about things from different points of view and be creative,” says Miller.

Where to send managers to learn how to be creative is becoming an important issue for top executives. After all, the MBA is a degree in “administration,” and in a business world where creativity and innovation are at a premium, skills in administering organizations have less value.

With MBA enrollments down, B-schools are striving to become more relevant to prospective students. To remain leading suppliers of management talent to corporations, consulting firms, investment banks, and other business, B-schools are being forced to adapt to a changing world. “More and more, companies find themselves involved in exploration,” says Margaret A. Neale, a professor of organizational behavior and leader of the MTIS program at Stanford. “To be competitive, you have to be more creative.”

Mixed Success
Stanford is doing just that by establishing a new Institute of Design that will teach design thinking and strategy to business, engineering, and design students. This “D-school,” founded by Stanford engineering professor David Kelley, also founder of design powerhouse IDEO, may well give Stanford an edge over its B-school rivals as innovation becomes more valued for corporations striving to increase their revenues.

The Institute of Design (ID) at the Illinois Institute of Technology, the other top D-school in the U.S., is already sending many of its grads to big businesses. “More than half our graduates are going into strategy, marketing, and research in companies, not just design,” says Patrick Whitney, director of the ID. Large consultancies such as McKinsey & Co. are hiring recent grads.

Business schools have been trying to inject design thinking into their curriculae for well over a decade, with mixed success. Many have worked with the Corporate Design Foundation in Boston to develop design courses. These B-schools tend to offer a single elective or executive MBA class in conventional product design.

Harvard Business School’s course in Managing the Innovation Process, Northwestern’s Product Development & Design, and Georgetown’s Developing New Products & Services are all extremely popular among MBA students. And an elective at the University of Michigan’s Stephen M. Ross School of Business, for example, has had students developing improvements to cars for years.

B-schools are are now trying to go beyond the single elective in product design by linking up with design schools. One of best programs in the country is the Integrated Product Development track for MBAs at Carnegie Mellon University’s Tepper School of Business. Designers, engineers, and marketers mix it up in the classroom to develop prototypes of useful products that are commercially viable. MBAs more accustomed to financial analysis and bottom-line issues are pushed to think more creatively. “Innovation is critical in management. You have to innovate to compete and survive,” says Carnegie Mellon Dean Kenneth B. Dunn.

At the Haas School of Business at the University of California at Berkeley, Sara L. Beckman, a senior lecturer in operations, teaches a course called Design as a Strategic Business Issue. Beckman has teamed up with IDEO, Berkeley’s School of Engineering, and California College of the Arts to teach a course called Managing the New Product Development Process. For many MBAs, it’s the first time they have ever worked with non-business people on projects. “The analytical MBA focuses on solving a problem, but the design process focuses on problem-finding,” says Beckman.

That’s the premise behind the University of Pennsylvania’s Wharton School executive program — Design, Innovation & Strategy — scheduled for this fall in Milan and Copenhagen. The course, part of the Wharton Fellows program that brings together mostly middle managers from around the world, was conceived by a group of senior executives. Their rationale? Design is often the path to innovation.

INSEAD’s joint program with the Art Center College of Design in Pasadena, Calif., one of the leading car design schools in the world, brings design students to Europe to team up with business students in various courses. Then they go to Pasadena, where students present their designs.

Many companies are going directly to top design firms to set up customized executive-education sessions. Most of these involve getting the CEO and his top managers out shopping for the things their company sells. It’s a game of “be your customer” that, despite its simplicity, can have enormous impact. Samsung has learned a great deal about design by attending various sessions at IDEO and other consulting firms.

Learning how to be creative is one of the great managerial challenges ahead. It was once obvious where managers should go for training. That’s no longer the case.


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