Stanford’s ‘Crystal Ball’ Peek On Innovation

What is happening in Silicon Valley certainly influences both the B-school that rests nearest to it and the students who attend it each year. “What we find is a blend of students, some of whom will come to Silicon Valley, fall in love with Silicon Valley, and want to stay, but also many of whom want to go back to and have an impact,” Siegel told Poets&Quants after the day’s panels, adding that his classrooms are increasingly like a “United Nations meeting.”

The innovation happening just outside classroom doors has outsize influence on what happens within the classroom, Siegel explained. For example, he said 25% of the curriculum in all of his courses change every single year. Increases in tech and innovation interest have led to continual case writing and updating to stay current with industry trends and companies.

In particular, product management and technology-focused cases have filled curriculum lately, Siegel explained. “You need to have companies students can relate to,” he said. “And the MBA faculty needs to be committed to keeping classes current.”

THE CONTINUING RISE OF THE SHARING ECONOMY

If the second two Crystal Ball panels were any indication of how the GSB will approach business education moving forward, expect an increasingly diverse student population with an eye toward the burgeoning shared economy. “A bank is going to go from being a very people-centric thing to basically being operated by algorithms supervised by people,” said Susan Athey, Stanford GSB professor of economics of technology. Athey joined fellow GSB faculty member Paul Oyer, the Fred Merrill professor of economics, and Dan Knoepfle, a senior economist at Uber who holds a Ph.D. in economics from Stanford, on the second panel of the day.

“If you’re a typical large bank in a country around the world, in the last year a management consultant has come to you and told you that you will lose 40% of your workforce in the next five to ten years,” Athey said. Of course many of these positions are teller-like positions and don’t have much influence on MBA jobs. But the shift does indicate an evolution in managing fewer humans and more robots and algorithms, the panelists explained. Still, “the employee-based model of employment is still the dominant force in the economy,” Oyer explained, pointing out that about a third of the U.S. population currently uses some form of sharing economy as at least part of their income — a number predicted to grow to 40% within five years.

It is certainly hard to ignore what Uber, AirBnB, and others have done to once-dominant industries in the U.S. Those companies — either directly or indirectly by their spinoff competitors — have likewise influenced economies around the world. Still, just what effect that will have on the global economy and business students moving forward is unclear. We really don’t know just what is going to happen, Siegel concluded.

DIVERSITY STILL A PROBLEM AT THE HEART OF INNOVATION

Lastly, panelists discussed Silicon Valley’s perpetual diversity issues. “We’ve always welcomed people into this place,” Siegel said toward the beginning of the panel. “I worry if we become too isolated — even socioeconomically — we will lose touch with the seven other billion people on the planet who buy the products that are delivered here.”

Myra Strober, long-time Stanford School of Education professor, caught the attention of the room from the get-go with a passionate call to action.

“As I think about this issue, it is truly a dilemma to me,” said Strober, who said she was the first woman faculty member when she joined the School of Education in 1972. “How can it be that the most innovative place in the country cannot figure out how to be diverse? I mean, it’s remarkable to me that this is a problem here.” Strober recalled one of the first conferences she participated in on the topic of diversity, in 1974. A book was based on papers presented on the topic at that conference, she said, and “I went back and looked at that book to look at what I said at that conference. And it isn’t very different from what I’m going to say today. This is not rocket science.” Strober pointed out that change requires a hiring plan, commitment from hiring managers, setting goals, and then rewarding goals. “Silicon Valley knows how to do that — all companies know how to do that,” she continued.

The major tech companies began sharing diversity statistics only a couple years ago. Since then, not much has changed despite much-publicized efforts to move the diversity needle. Earlier this summer, Fast Company reported that Google is still 70% male and only 2% black. A paltry 16% of Facebook’s tech team is female. Meanwhile, Twitter’s management is 72% white and 28% Asian. The reason large companies have such problems changing? They were made with the values and culture of white men, Strober concluded. “There are so many things in a company’s culture that was built by men, for men. And generally, for white men,” she said.

Panelist offered some solutions, including changing behaviors and hiring strategies to employ and retain diverse managers. “You must be committed to finding candidates that don’t look like the rest of your executive committee,” said Fern Mandelbaum, a lecturer in management at the GSB. Siegel said a lot of that falls on B-schools, which are producing future managers to some of these top tech firms. Siegel pointed to multiple programs and initiatives at the GSB to create an inclusive environment for under-represented minorities and women, like the woman-focused admissions event XX-Factor.

PUTTING THE ‘RIGHT TEAM ON THE FIELD’

As for Silicon Valley’s continued interest in MBA talent, Siegel said it’s vital to continued innovation.

“There are some who say that the greatest students at Stanford are over at the engineering school,” Siegel began during his conversation with Poets&Quants. “I happen to believe the greatest students just happen to be at Cal and Stanford. And I think if you look at what it takes for a company to win, it’s like a sports team. Individuals don’t win championships, teams win championships.

“If your goal is to be the most valuable player, then you should focus only on one function. If your goal is to raise the trophy and be a winner, make sure you’ve got the right team on the field. And MBAs can absolutely, positively, play a role in that.”

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