The Continuously Rewired Business School

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Wednesday, June 8, 2022
By Ulrich Hommel, Martin Meyer
Photo by iStock/Marek Mnich
As constant change becomes the new normal for business education, business schools must prioritize innovation, interconnectivity, and experimentation.
  • At many business schools, administrators have paid far more attention to societal impact than to innovation.
  • Stakeholders are increasingly pressuring business schools to act as “integrators” that empower change agents and create spaces that bring together people with different perspectives to drive innovation.
  • In response to disruptive change, business schools must engage in “institutional neuroplasticity,” in which they adjust their approaches in new ways.

 

When many people think of universities, they think of institutions steeped in tradition, sitting behind ivy-covered walls shielded from the mundane vagaries of everyday life. Few consider innovation to be part of academia’s DNA. In many ways, universities seem stuck between the static traditions of the past and the disruptive challenges of the present.

For the most part, business school administrators and faculty believe that, even though their institutions are embedded within the hallowed halls of universities, they are far more innovative than their parent institutions. They view themselves as bridges between academia, the place where knowledge is created, and agora, the place where the results of academic work can be brought to good use. And for business schools, “good use” refers specifically to ensuring their work has a positive pact on society.

In many ways, “having societal impact” serves as a partial proxy for “being state-of-the-art” in business education. This might explain why innovation has not received the same attention as impact in the vocabulary of business school administrators.

We make the case that business schools need to break from their traditional approaches and make innovation the center of their development. Only then can they build more radical momentum and achieve their broader societal impact objectives.

Shifting From Transactional to Collaborative

One obstacle that limits business school innovation is the tendency among global business schools to mimic each other’s programs and strategies. Pundits have offered many explanations for this mimicry. These include the disciplining effects of accreditation, rankings, and university governance. Yet another factor that limits business school innovation is the historical financial success of business education. Still riding the “gravy train” of the market’s spectacular growth earlier this century, many international business schools continue to see innovation as a secondary priority.

Currently, however, an agglomeration of market forces is challenging business schools’ existing business models. These forces include:

  • The digitalization of business degrees.
  • Increased learner demand for hybrid educational delivery.
  • Widespread adoption of microcredentialing, stackable qualifications, and shared learning models.
  • The unbundling of education (driven largely by the three forces listed above).

In addition, growing pressure from stakeholders is compelling business schools to become system integrators that bring different entities together to achieve societal impact. This pressure has become especially prominent in the movement for companies to address the United Nations’ Sustainable Development Goals and adopt environmental, social, and governance (ESG) policies.

Business schools must embed themselves in collaborative ecosystems, where they can drive innovation on a much larger scale.

Taken together, these forces promise to create business schools that are very different from what we have seen in the past. No longer will business schools act as hubs that merely connect different stakeholders for isolated, one-on-one transactions. Instead, our institutions must embed themselves in collaborative ecosystems, where they can drive innovation on a much larger scale.

Benefiting From Institutional Neuroplasticity

Many insightful contributions delineate how business schools can improve their future-readiness. But while such commentaries are generally rich in ideas, they often are fundamentally static in their thinking. They tend to act as if solving current challenges merely involves a journey from an old equilibrium to a new one.

In our view, however, business schools must instead be more than just risk-savvy, resilient, or ambidextrous if they are to respond effectively to 21st-century challenges. They also must become less invested in any particular mode of operation and more open to new ideas and strategies.

In other words, they must engage in a continuous rewiring of their approaches in order to fully embrace innovation.

Just as the human brain can rewire itself to form and reorganize synaptic connections, especially after a brain injury or other pathological event, so can business schools challenge, rather than celebrate, their own traditional bureaucratic rituals. We view business schools’ ability to rewire themselves as a kind of institutional neuroplasticity, which allows them to make fundamental adjustments in response to disruptions and crises.

Giving Agency to Change Agents

The phrase “agency for change agents” might sound like a tautology. But it lies at the heart of what we are calling for in business schools today. How many business schools have developed a genuine appreciation for innovators in their communities? How many schools empower those who wield enough influence to push away groupthink and deliver real change?

All too often, business schools hire faculty and other actors to break down intraschool walls and pave a path for innovation. But those individuals are then left to their own devices, without a great deal of support. For change agents to be effective in their role, however, they need both company and a receptive environment.

If business schools are to respond effectively to 21st-century challenges, they must become less invested in any particular mode of operation and more open to new ideas and strategies.

As Erin M. Meyer, a professor of management practice, suggested in her keynote at AACSB’s 2022 Deans Conference, business schools need to “increase talent density,” “put feedback on the agenda,” and “now, remove controls” as a way to support their most innovative faculty and staff. Meyer likens innovative business schools to trees. In this analogy, deans form the roots that support the organization, while employees live out at the branches where they are free to act in the best interest of their schools.

In short, Meyer proposes nothing less than a reversal of our institutions’ traditional hierarchy. It’s no longer about leading the institution from “top down” or “bottom up.” It’s about creating an interconnected ecosystem of stakeholders who are empowered to help the institution drive innovation and thrive in times of disruption and change.

Creating Consensus Spaces

Traditional academic hierarchies are often defined by disciplinary silos, which nurture an “us versus them” attitude among faculty and staff. By establishing departments, self-funded institutes, and profit/surplus centers—and by focusing on individual rather than institutional performance—business schools create divisions within their communities.

In contrast, neuroplastic institutions focus on integrating the whole. A rewired business school naturally creates new connections across its community and opens itself up to external and internal innovators.

Henry Etzkowitz, scholar and president of the International Triple Helix Institute, advises organizations to establish consensus spaces that allow actors from different backgrounds and perspectives to cross boundaries and connect with each other. Through these connections, they can better “generate and gain acceptability and support for new ideas.”

For example, the University of Vaasa in Finland has created multidisciplinary research platforms built around three themes: energy transitions, the digital economy, and innovation. These platforms support the transformation and renewal of the university by interlinking academics from diverse disciplines with practitioners who are interested in exploring co-creation opportunities.

Paying Attention to Connectivity Gaps

Rewiring business schools is, first and foremost, about establishing effective frameworks for meaningful communication—or, using our neuroplasticity metaphor, it’s about facilitating successful synaptic transmissions. This means encouraging meaningful exchanges with and among different stakeholders.

This process begins by asking the right questions. As Idalene Kessner, dean of Indiana University’s Kelley School of Business in Bloomington, explains in a May 2020 interview, “the key to innovation is making sure you hear all voices and that they come in and inform your decisions.” At the Kelley School, bringing different voices together involved designing a future-focused curriculum with input from the school’s advisory board.

But it’s not enough for business schools simply to convene people with different perspectives. Schools also must make themselves accountable for how such input is utilized. Otherwise, they will end up making ineffective compromises between pursuing options that are best for the business school and allowing internal stakeholders to remain in their respective comfort zones. When this happens, schools might have great ambitions, but achieve only modest reforms.

They also might need to manage external university structures that could make their rewiring more difficult. Consider, for example, the recent trend among universities to centralize their campus services. While centralizing services might generate cost efficiencies, it might also reduce the resources available to the business school. This could hamper connectivity to the surrounding ecosystem and harm the business school’s general impact agenda. Schools capable of rewiring themselves will need more support and resources, not less.

When schools empower change agents and create consensus spaces, they have taken the first steps to managing these challenges. From there, they can prioritize open communication among stakeholders as a way not only to close connectivity gaps, but also to encourage adoption of the most promising new ideas.

Similarly, business schools can stimulate innovation by rewiring intraschool synapses in and between academic departments—which, according to a 2011 article by Sadri Tahar and co-authors, is often characterized by “flat hierarchies, distributed responsibilities and participative, if not atomic, structures.” Business schools can accomplish this objective by setting up thematic centers, institutes, or platforms that act as a part of a whole, rather than as separate, competing entities within the institution. A central purpose of these entities should be to connect and integrate disciplinary expertise around societal challenges.

The capacity for continuous renewal and improvement will become one of a business school’s most important attributes.

John Bessant, emeritus professor of innovation and entrepreneurship at the University of Exeter Business School in the U.K. and a senior research fellow at Innofora Ltd., likens these spaces to the grand salons in 18th-century Europe. Bessant argues that such spaces fulfill several common purposes. For example, they encourage convening, which Bessant defines as “bringing people together and publicizing the space to attract interesting participation.” They support combining, or “ensuring sufficient diversity without losing focus and then providing enabling mechanisms to help bridge between different worlds.” And they promote community-building, which involves “creating a supportive peer group and a context which enables co-operation and sharing.”

Whatever form and shape these areas take, they can become true innovation spaces for a business school. They can help stakeholders overcome any obstacles to innovation and stimulate institutional transformation.

Rewiring Business School Leadership

Just as the human brain can rewire itself in response to trauma or other challenges, so, too, can business schools reconfigure their internal synapses and their connections to the wider ecosystem around them. The capacity for continuous renewal and improvement will become one of a business school’s most important attributes.

However, our manifesto for a continuously rewired and interconnected business school can become reality only when deans and executive teams play the roles of moderators, integrators, and above all, connectors. Returning to the tree analogy, academic administrators must act as the roots that bring together the full spectrum of business school constituents and empower their experimentation. Only then can academic leaders ensure that business education delivers on its promise to generate societal impact.

The road ahead for business schools will be bumpier than it has ever been. Schools will face unexpected turns, roadblocks, and even dead ends. To navigate this road successfully, they must be willing to challenge tradition and embrace trial-and-error experimentation. They must reward faculty not only for pursuing traditional track records in research or teaching, but also for their proven ability to initiate and execute institutional rewiring.

Accreditors, rankings outlets, and industry pundits also have roles to play in easing the transition into this new normal. They must establish standards and other metrics that reverse the tendency toward mimicry in business education, and instead reward institutions for striking out in new directions.

As institutions continuously rewire the connections among their programs and stakeholders, they will position themselves to achieve one of the five dimensions of AACSB’s collective vision for business education: “inspire innovations with the power to change the world.”

Authors
Ulrich Hommel
Managing Director, XOLAS GmbH, Professor of Finance, EBS University of Business and Law
Martin Meyer
Vice Rector for International Affairs, Director of InnoLab, Professor in the School of Technology and Innovations, University of Vaasa
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