Is Business School The New Design School?

People are often surprised when they hear that I earned my master of business administration degree, or MBA, as a side-hobby while I was a tenured professor at MIT. Even MIT’s human resources department was perplexed that I’d want to apply for the employee benefit to partially support my tuition costs.

My motivation to do so was simple: I’d spent most of my life in the research world interacting with corporations during my years at the Media Lab, but I often got lost when the business folks would bandy financial or other business terms around me. So I wanted to defeat my lack of knowledge, by acquiring what most of them seemed to have: an MBA.

Fast forward ten years and a few professional changes later, my interest turned back to business schools again. This year after releasing the #2016 DesignInTech Report, it turns out that all of the top ten U.S. business schools have design clubs led by students.

The trend was remarkable, and to give credit where it is due, it was my KPCB partner Jackie Xu who brought this fact to the foreground. So we set out to interview student leaders at three business school clubs: Yale School of Management, MIT Sloan School of Management, and Rotman School of Management at the University of Toronto.

Respectively, those schools are represented by Wilma Lam, Anita Wu, and Jeremy Fish in a recent KPCB Ventured podcast. Below are some key takeaways from our discussion.

Design is being embedded into traditional businesses

Fortune 500 companies are beginning to use human-centered design to think about problem solving rather than traditional hypothesis testing, which is why we are seeing more than 10% of Fortune 100 companies place design as an executive priority. Creativity is becoming a strategic lever to create a competitive advantage in the corporate world. That explains why management consulting and strategy services firms are acquiring design agencies at a rapid rate. 42 design firms have been acquired since 2004, half of those in the last year alone.

Business schools need to get closer to computational design faster

There are three kinds of design: first, classical design, which is design from the physical world and has been around for centuries, beloved and highly refined. Secondly, we have the world of design thinking which goes beyond making and is defined by systems thinking and processes and improving how organizations innovate. Lastly, there’s computational design, or designing for billions of people in real time.

Here in Silicon Valley, this type of design is experienced everywhere and produces the highest business value for the tech world, but the number of practicing designers in this category is still low. For future entrepreneurs that are graduating from business schools today, I believe their basic understanding in design thinking positions them to more quickly identify this special kind of talent.

Design matters more than ever to customers

Computers are a fundamental part of how we live, and so it’s incumbent upon tech companies to create an enjoyable experience for their customers. So-called business “best practices” are now being geared towards the users of a company’s products rather than just the more impersonal financial metrics.

That’s because in the old days you could ship expensive products that people would buy once, or maybe come back and re-purchase in a few years; instead, today they are purchasing comparatively lower-priced subscriptions to products, which means a deeper relationship with customers is key, or else they are less likely to renew.

Moving from creative competence to creative confidence

Business students with design thinking training can bring necessary sensitivity to the designers in the organizations in which they may serve, or when they are a co-founder with a designer. “Design is a gateway for better innovation,” said Jeremy, and the kind of innovation that designers embody often has to do with their attitude towards experimentation or “creative confidence” as Stanford Professor David Kelly terms it.

So although classical designers often poo-poo the post-it note barrages that are common to design thinking, it’s a key part of business students’ learning how a designer thinks — so that they can empathize not only with customers, but with non B-school designers too.

The future of the designer is TBD (Technology, Business, Design)

The fundamental profile of designers is beginning to shift as traditional markets begin to value design as a strategic lever. The 2015 #DesignInTech Report pointed out that less than half of design leaders in tech have backgrounds in traditional design disciplines, and instead bring engineering and social sciences skills to the unique challenges of design in the tech world. With all top ten U.S. business schools having student-led design organizations, perhaps in the future the largest number of designers in new industries will come from business schools.

In closing, it might seem a little odd that we didn’t focus in this podcast or in the 2016 #DesignInTech Report on actual coursework happening in business schools today. That’s because as a former university president, I know from firsthand experience that the student-led clubs are often the fastest moving parts in areas relevant to students’ interests.

I’ve found that especially in areas like startups and #DesignInTech, it’s the students leading the discourse much more than the faculty. And because business schools are, well … businesses … they are the most likely to adapt to what the students (AKA their customers) want. So consider all this activity in the student-led design club arena to be indicative of where much of the curriculum in business schools will be heading.