Fostering A Taste For Disruption At NYU Stern

The other way of introducing discontinuity is by mistake or accident. And this is why you get a lot of emphasis – and I guess this is a trend – of you need to reward mistakes (or at least tolerate them) because this is where learning comes from. Traditionally, there have been the two ways of discontinuity comes into the students’ experience of entrepreneurship or innovational learning in how to be creative. We’re going a step further in that and saying, ‘We’re not expecting you to just wait around for discontinuity to happen. There is a way of introducing it deliberately. This is the skill of provocation. We’ve put a lot of emphasis on the skill of provocation in the first phase of the competition, both for the people who have not yet discovered an opportunity or come up with idea, but also for those who are quite far down the track. Those people are great at forging ahead and setting up paths and following them. But most people are terrible at actually going back and challenging or provoking the original assumptions or decisions that gave rise to that path or trajectory in the first place. So that’s a big part of what we’re doing. At end of the day, we just need better ideas.

As I mentioned before, the mixing of different perspectives is so important. We realized this was difficult to do in the physical confines of the university. You have all the different departments on different levels. All of the schools are also siloed. You have faculty members sitting isolated in their own offices. One of the most important things [that we’ve done]…is developed a new floor (the fourth floor), completely collaborative space for the Innovation Lab. It’s not situated within a department and it’s cross-discipline.

We’ve also created an online digital platform called Ideas Never Sleep (Link), which is an important way of making sure that we’re packaging up all of these interesting insights that are coming from all the great research coming from NYU Stern. And we’re packaging that up in a way that a much broader audience can consume these new configurations of knowledge. And it’s not just for the professors here at NYU Stern, but it’s also the professors at NYU overall, so we might have professors from the law school, med school or arts schools and they’re all talking about some key principles or trends that they’re seeing. We’re combining that with what we’re hearing from the business professors. And we’re also including practitioners on that as well. So it is an experiment in online learning and an inside platform. And it’s a great place for students who want to develop ideas or get inspiration by seeing early shifts in consumer behavior by looking at these insights.

What do you see as the two or three biggest keys to success for student-launched enterprises?

Let’s build off build off what we were just saying about ideas being the easy part. A lot people believe the difficult part is the implementation – it’s the execution that matters. We all know, of course, that there’s this first and second stage thinking to any idea. Insight basically comes before implementation. The current perception seems to be that insights and ideas are everywhere. Implementation is the tough bit.

In my lectures, I often ask students to design a clock which has no moving features on its face but can still function effectively. They find it actually quite difficult. They come up with suggestions like the moving spot wide or changing color and temperature. The simple answer is, a clock that tells the time by chiming like a grandfather clock or a telephone clock or something. It’s basically having an audible queue. The trouble is that having decided at the conception stage to look at a visual clock, they proceed in the implementation stage to design a visual clock without a moving feature.

There are lots of examples like that where people are just rushing into implementation. We often refer to this as the first idea fallacy. It’s the tendency to fall in love with the first plausible solution because of the gratification that it brings and the decisiveness it demonstrates. So part of our job is saying, ‘What’s going to be really important to your future as an innovator or an entrepreneur?’ It isn’t the fact that you can implement these ideas. Of course, implementation is important. But your future success is going to be governed fundamentally by your conceptual innovation skills. I think there is going to be a trend back to the conceptual.

Now, I also hesitate to use the term conceptual innovation because it makes people’s eyes glaze over.  In many people’s minds, conceptual essentially means talking or thinking things to death and not getting enough stuff done. But getting stuff done usually means getting stuff done within the boundaries of what people believe is achievable and acceptable. And those boundaries – I often think of them as conceptual limitations – are imposed by people’s mindset, a way of thinking that leads them to evaluate and respond to new ideas in a certain way. So all the assumptions that our students have about what will or won’t or what can and can’t or what should and shouldn’t be sort of disrupted if you like are all woven into their mindset. It’s the mindset that determines the freedom of their thinking and basically their futures as entrepreneurs.

So what we focus on very, very much are the conceptual aspects of innovation. And not just for the people generating the ideas, which are the students, but also the coaching and mentoring network that we run here at the school. Of course, an idea that has been developed or a business that has been developed and put into action are going to be more valuable that one that hasn’t.

What’s even more important than that is the skill in being able to see the value in ideas that haven’t been developed. In our whole coaching and mentoring network, that is the one fundamental skill that they have to be able to see: Value in ideas that haven’t been developed. Now, that depends less on the idea itself and more on the insight of the person judging it. The problem is that the insight that I’m talking about isn’t always intuitive. New ideas can’t always be effectively judged on the basis of experience. Our faith in our own intuition makes us prone to error—especially when we’re trying to predict the future from the context of the past or the present.

I probably mentioned this before: If we believe that the VCs and the leaders who evangelize the need to disrupt existing businesses are eager to accept disruptive ideas, we’re making a big mistake. In my experience, whether they are aware of it or not, most executive managers, entrepreneurs, and venture capitalists are biased towards evolution rather than revolution. There’s an obvious reason for that. The conceptual skills that these people need – and our students need to develop – are not always intuitive. This approach to educating people in innovative entrepreneurship that I was talking about before is completely counterintuitive. It is counterintuitive to search for alternative ways of thinking about a business when a business or industry is at the peak of its success and everything is working really well. It is counterintuitive for students to slowly experiment with long-term solutions when they’re under pressure to address short-term problems or whatever everyone is talking about at the time.

We’ve traditionally educated students to be reasonable, rational decision-makers, particularly in MBA programs. When it comes to entrepreneurship and innovation, we expect them to be irrational and unreasonable disruptors hot on the trail of breakthrough innovations. When it comes down to our students, mentors and judges, [it is] their ability to challenge assumptions [that] is far more important than their ability to reinforce them. And if they are only trying to recognize common problems and respond with common solutions, then this counterintuitive mindset that I’m talking about never develops.

So the Innovation Lab’s role within the school – and what we’re striving for in “An education in possible” – is to help our students and also the community that we’re working with get past the conceptual habits and biases. We want them to foster this entrepreneurial and innovation mindset and ensure that they know how to lead other people to do it as well.

This bears repeating because it’s so different than what other schools are doing. This is a commitment to a conceptual effort, not an applied result. The reason for this is that you can’t keep students motivated if the only way you’ve got of encouraging this entrepreneurial thinking is to implement every idea that they come up with. So by focusing on the process and getting them to focus on the process – and getting judges and mentors to focus on the process – we can encourage this sort of entrepreneurial thinking and students don’t feel bound to accept or act upon the products of disruption.

Basically, we need the students to be willing, able, and ready to generate ideas that have never considered before. Even if they don’t get used, that’s far more important than having them exercise restraint, sound judgment, or not try anything at all. We often say this to anyone who is involved in evaluating the student work. You can’t bash ideas into shape. Just indulging in critical thinking and being critical of the ideas is going to destroy motivation. Even if you hate 90% of the idea, you can build on the 5 or 10% that you see value in. So it is very much about a constructive attitude to encourage effort and not necessarily result.