Fostering A Taste For Disruption At NYU Stern

Luke Williams in a lecture

Could you describe the philosophy that NYU Stern takes when it comes to entrepreneurship?

I came on board in 2012. The school has had a center for entrepreneurial studies for a long time…When I took a look at what was happening in entrepreneurship, I realized the entrepreneurial studies were all geared around really startup businesses. So part of this has been saying, how do we broaden what we define as entrepreneurship to appeal to not just students who want to do startups, but any student who wants to think differently.

So the starting point was, what exactly do we mean by entrepreneurship? There are two distinctive views. The first is the traditional view that entrepreneurs are people who run their own companies, self-employed and running small businesses. The second view, which really comes from the economist Schumpeter who talked about creative destruction, talked about entrepreneurs as innovators. These are the people who come up with ideas and take those ideas into some high growth companies. So the actual academic definition, if you like which I think is important, is to distinguish between replicative entrepreneurs (those who set up small businesses) and innovative entrepreneurs [who disrupt and disorganize the status quo].

For instance, [let’s say] a student wanted to learn how to start up a business in selling shoes. That’s been done plenty of times; Just about every business school in the country can teach you how to set up and run a shoe store. On the other end of the spectrum is what’s often referred to as “innovative entrepreneurs.” These are the people who disrupt the existing way of doing things. Our point of view is hardly any school in America really knows how to teach innovation entrepreneurship. We believe this is the Holy Grail for innovation and entrepreneurship. So we have put a stake in ground saying, ‘We’re not just about replicative entrepreneurship. We’re going to figure out how to basically create more innovative entrepreneurs. The thing we do around programming and all the support is based on innovative entrepreneurship or disruptive entrepreneurship.

Where that starts is with people’s motivation to want to grow in the first place. A big part of what we do initially at the start is to make sure we have an intake for…if I am standing at orientation in front of 450 students and only 50 of them might have considered themselves as potential entrepreneurs at some point in the future, my job is to say, ‘How do we get all 450 thinking about entrepreneurship as a viable career opportunity? How do we get all 450 students to embrace this motivation to actually change the status quo?’

You might have heard Stern’s catchphrase or tagline of, “An education in possible.” And that’s what it’s really about. It’s about opening the mind to all sorts of new possibilities. And that really starts with an attitude. And the reason for that is important: I don’t take it for granted that any student comes into an MBA program and is motivated to be an entrepreneur or innovator. But I do take it for granted that any MBA who comes through the program is motivated to grow. So they want professional development growth, growth in their career, and many of them want to challenge their existing identity or existing success that they’ve had to actually apply it in a more interesting and larger game.

If they have a vested interest in growth, they have to have a vested interest in innovation because it’s innovation that drives growth. So that’s the starting point to everything we do. We have to instill a different attitude in every one of the students who starts their educational journey with us. Our job as an Innovation Lab and a school is to leave every NYU student with more creative confidence that what they had when they came in.

According to Stern’s employment reports, the percentage of students launching startups dropped from 2% (Classes of 2011-2014) to 1% (Class of 2015). Considering the increased interest in entrepreneurship at other schools, do you anticipate the number of Stern students pursuing entrepreneurship to grow?

I think it has remained pretty steady over the last few years between 2 and 1%…To build off the answer to [the school’s philosophy] question, it’s really not about entrepreneurship. It’s about thinking and regarding thinking and the ability to think innovatively as a skill and not an innate quality.

Our objective is to expose every student who goes through this program – and we start this in the orientation through a program called Launch – to this form of thinking. It just still amazes me that there are many people who are still saying, “Can entrepreneurship be taught?” “Can this way of thinking be taught?” To me, these people think the idea of teaching this entrepreneurial way of thinking seems strange. But we often say, ‘You don’t have to teach people how to walk or breathe.” And thinking just seems a natural process – people just think it happens naturally. Walking and breathing are natural activities, but you can be taught to walk more effectively or even breathe properly as opera singers, actors, and the rest do. We regard thinking, particularly the innovative and entrepreneurial thinking, as being something more like golf. Without any coaching at all, you’d be able to play golf in some way. But a little bit of coaching will make a huge difference.

The other attitude that people have is to regard this entrepreneurial thinking as a gift like intelligence or a personality trait. People are born as natural entrepreneurs – They’ve got tenacity. They’ve got passion. You often hear this even when successful VCs arise. Or someone will say, ‘What makes a good entrepreneur,’ and they’ll say something like ‘probably a vision’ or ‘persistence.’ It’s very hard to teach clear vision or persistence. It’s very hard to get people to change their personalities. So this whole teaching of entrepreneurship as a set of personality traits, I’d say in my experience, is pretty ineffective. We make the distinction between thinking and intelligence. That’s a way of regarding thinking as a skill that you can actually develop and practice just like you would practice golf, tennis or learning an instrument. Because once you regard entrepreneurial thinking and innovation as a skill, then you can look at it objectively. You can pick out the faults. Instead of trying to defend or hide your mistakes, you switch around and completely make an effort to recognize them. And you can be fascinated by the whole entrepreneurial thinking process instead of being defensive about, say, why your IP won’t work.

When you talk about growth, let me give you a metaphor that I like. And that’s cooks in a kitchen. We often define ideas, which are what we think entrepreneurship innovation is all about, as the recipes that you use to re-arrange things to create new value and wealth. Growth occurs whenever people take ingredients like resources, information and data, and rearrange them into recipes – i.e. ideas – that make them more valuable.

When you think of growth like that, I like that metaphor because we’re all obsessed with cooking shows in America. Have you ever noticed how many cooking shows there are on TV? We’re obsessed – Mark the Chef, Cutthroat Kitchen, whatever you like. They typically take place in a warehouse that includes a big kitchen area with cooking stations. You have thousands of amateurs and professional chefs all auditioning for a chance to show off their skills under time pressure tests. Now, imagine that these cooks are surrounded by shelves full of new ingredients. But those ingredients unfortunately won’t get used because they don’t fit with the traditional recipes. They are completely wasted opportunities.

It’s similar with traditional thinking and leadership, the way traditional business education has been taught for a long time. Executives use the same old recipes over-and-over again to repeat their success and avoid mistakes and uncertainty. They don’t want to waste all this on trial-and-error. So new ingredients, such as potentially disruptive technologies or insights into consumer behavior, often go unused because they don’t fit the existing product, services, and business models. So cooking up ingredients in a kitchen is a useful metaphor for entrepreneurship and innovation because every organization has ingredients such as competencies, assets, and processes. And together they form a recipe for a new way of offering something to the market.