The University of Texas at Austin
  • Learning to Innovate

    By Renee Hopkins, McCombs School of Business
    Published: April 2, 2013

    Innovation is everywhere at the McCombs School of Business.

    Even leaving out the entrepreneurship-specific courses that focus on how to build and fund a startup, classes in which techniques and tools for managing innovation in the post-startup phase or in existing companies are taught turn up in a surprising number of academic departments.

    Surprising, at least, until you consider that innovation touches on product or service creation, process creation, customer insights and management — not to mention how to finance innovation.

    Graphic that defines innovation as creating a new product, service or process that provides value for customers by solving a problem for them

    [Illustration by Kim Brown]

    Innovation is a complex and multi-layered system, writes Associate Professor Ed Anderson in the new book “The Innovation Butterfly: Managing Emergent Opportunities and Risks During Distributed Innovation,” which he co-wrote with Nitin R. Joglekar, a management professor at Boston University who was previously a visiting professor at McCombs.

    Anderson, who teaches in the Master’s of Science in Technology Commercialization (MSTC) program, defines innovation as the result of an “innovation system” comprised of interactions among the markets in which a company competes and strives to bring its customers value by meeting their needs, as well as the company’s own entrenched processes, employee skill sets, portfolio of products (or services) and investment policies.

    “You can’t just set up a business plan and pray,” he says.

    Most of the McCombs classes aimed at helping students learn tools and skills to manage innovation systems can be found in the Management Department. James Fredrickson, department chairman, and Associate Professor Luis Martins, who teaches some of these classes, both assert that successful innovation requires a strategy that must be set and driven by a company’s leaders.

    Therefore, a variety of strategy and leadership classes at the upper-division and graduate levels feature innovation, including Martins’ course “Leading Innovation and Change,” which is offered to MBAs and graduate students. A version of that class is also taught in the MSTC program, as well as in the new Driving Business Innovation certificate program offered by Texas Executive Education. The class covers a critical challenge for existing organizations: they must continue to execute well-thought-out strategies that made them successful in the past, while still planning and executing innovation they need to compete in the future.

    Management Professor Violina Rindova teaches “Strategic Innovation: Creating New Markets, Business Models, and Growth,” a course that equips students with tools and techniques to create new market opportunities by changing value propositions and business models, as well as to assess the economic impact of different business model choices.

    Rindova is also the faculty contact for the Innovation Leadership concentration in the Texas MBA program. That concentration also requires the “Leading Innovation and Change” course as well as the “Entrepreneurial Management” course, which covers the life cycle of an entrepreneurial business, including idea evaluation, business launch, growth and making profits.

    Electives in the Innovation Leadership concentration span the other business disciplines that touch most on innovation. “Managing Complexity,” taught by Reuben McDaniel, exposes students to theories about how to manage complex adaptive systems. Professor Sirkka Jarvenpaa teaches “Managing Innovation in a Global Company,” an management of information systems course that teaches graduate students how to manage open innovation in large, established organizations as well as in small start-ups operating in and leveraging global distributed environments for greater organizational effectiveness.

    The Marketing Department offers “Creativity and Leadership,” taught by Professor Raj Raghunathan, as well as “Consumer Insights and Experience,” taught by Stephen Walls, who said that his course teaches the discipline and structure of human-centered design. Walls’ course introduces students to an innovation method known as “design thinking,” which includes observational or “generative” research to uncover customer needs (as opposed to more conventional marketing research) and rapid prototyping, among other topics.

    In Anderson’s MSTC course, “New Venture Design and Implementation,” students learn tools for business model innovation, agile planning, risk management, and execution. A critical tool set Anderson teaches in his course is the SROM model – an acronym for Scouting, Roadmap, Orchestrate, Maneuver.

    Once a business model has been identified, the steps begin. Scouting involves looking at the available landscape using techniques such as information scaling, directed telescopes, and innovation-driven analytics. Roadmap is the phase devoted to flexible, or agile, planning, with plenty of contingency planning built in.

    Orchestrate indicates that leaders should not micromanage, but instead give their innovation teams goals and intent, not specific directions. In Maneuver, the team executes operations and marketing actions, but often the cycle starts over again even before the earlier maneuver is completed.

    All the while the innovation leader must align the innovation project with the business model, keeping a close eye on whether evolving conditions make it necessary to tweak the project, the business model, or both.

    In addition to its complexity, innovation has a dauntingly low success rate. The idea behind Anderson’s class, and indeed the other McCombs classes on innovation, is to teach the students tools to manage the complexity of the innovation process and speed the process so ideas can be tested and killed quickly. The ability to test an idea even in planning stages before a company invests too many resources in them is itself a way to manage the risk associated with innovation.

    The goal is to increase the odds of success, said Anderson. “If one out of 20 ideas survives, can we improve those odds to two in 20 at least? Or even better.”


    This story originally appeared on Texas Enterprise.

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