This is part one of our four-part innovation discussion, during which we focus on defining innovation and its relationship to problem-solving.
Welcome to the PwC-KWHS Webinar Series for High School Educators on Business and Financial Responsibility. I’m Diana Drake, managing editor of Knowledge@Wharton High School, and today we are discussing innovation and the art of problem-solving. Talk of innovation is everywhere in the business world. To be an innovator is to position yourself on the path to a successful life and career. We tell our high school students that they need to be more innovative, but do they truly understand what that means and how it is related to problem solving? Do they understand that innovation requires critical thinking to see something in an entirely new light – and to possibly inspire real change? We will discuss these and other ideas to help provide high school educators with a framework of understanding for innovation, and to find ways to teach students to be innovative thinkers and problem-solvers. We’re excited to have two top experts in the field helping us to explore this important topic. Saikat Chaudhuri is an adjunct associate professor of management and executive director of the Mack Institute for Innovation Management at the Wharton School. Rob Shelton is global innovation strategy lead at PwC, and specializes in integrating innovation, new business models and new technologies into an organization’s strategy and operations to create growth. Thank you both for sharing your insights today about innovation and the art of problem solving. During our discussion, we’ll also be addressing questions from high school educators around the country.
Below is an edited transcript of the conversation.
Knowledge@Wharton High School: Let’s start with some innovation basics, both in terms of how it’s defined and why it’s valued in the workplace. First and foremost, what is innovation?
Saikat Chaudhuri: Thank you very much, Diana. It’s a pleasure to be here. Innovation can be thought of in a variety of ways. But one way to think about it is that it’s the translation of knowledge or an idea into something that has impact. Often we think about it as perhaps financial impact, but it can also be social impact. I want to distinguish it, though, from invention. Invention is the idea itself. When you combine it with a bit of entrepreneurship, you get some kind of impact. And that’s the innovation. So for example, you may think of, an invention as a patent or the science, a technology. Maybe it’s an application, and the innovation will be what product you develop out of it.
Rob Shelton: Saikat, that’s an excellent description. Diana, I’ve got a briefer one that I think is entirely consistent with that, but useful because of its terseness and easiness to grasp. Innovation is the creation and delivery of value. Saikat called it impact. And I have no problem with that word, but [it is also] something that is valued. It’s a positive that is delivered. And innovation comes in different forms. There’s incremental innovation — small steps, improvements to something that exists already — as well as breakthrough innovation, those radical changes of the next and new thing. When you think of innovation, often people think of one or the other. The truth is that innovations run a spectrum from the very small — still valuable, but small improvements — to the very large changes that we often see and think about.
Chaudhuri: I like that a lot, Rob. Building on what you just said, we can also think of innovation as product innovation, process innovation, business model innovation, all of which can be the more incremental or radical kind, as well.
Shelton: We’re over-answering a single question, but it’s important to get the basics down. Innovation is not just the technology; it’s often a change to the process or a change in the way you do things. People forget that business model innovations — the way you deliver value, the way services are delivered and the types of services — are just as important as the technology innovations that we read so much about. Diana, did that give you a good foundation for us to work with?
KWHS: An excellent foundation. How is innovation at the heart of critical thinking and problem solving? Can you connect the dots there?
Shelton: It is at the heart of it. We constantly wrestle with how to better answer questions that have already been answered, [like] how to make a better mousetrap; how to deal with the challenges in our lives; [how to deal] with social situations and governments and the like. Creating better answers is fine. But sometimes we have to also find entirely new ways to answer things. The world constantly presents us with new problems or problems that don’t yield themselves to solutions coming from the standard approach. It’s both a case of critical thinking about what is, as well as critical thinking and execution about what could be.
Chaudhuri: I totally agree with that.
Shelton: Saikat, we’re going to have to start finding things to disagree about.
Chaudhuri: I’m sure we will.
Shelton: I’m sure we will, as well.
KWHS: [Let’s] move on to our first question from an educator. Martin Rayala, a teacher at Design Lab Schools in Wilmington, Delaware, wonders about the influence that technological innovation will have on 21st century skills. “We still think that people perform creativity, critical thinking, collaboration and communication better than machines, but for how long?”
Chaudhuri: I’ll let you take that one Rob while I think about what to say.
Shelton: It’s a provocative question. The idea that machines could step in and do better than us is something that, once upon a time, was dismissed. But these days, we’re seeing that there are opportunities as computers play “Jeopardy” and other things, and sometimes go solve problems. The question asks, “Will machines outperform us?” The answer, I believe, is no. But they will get much better at supporting our thinking. Analysis [has looked at] machines’ work on patterns and insights. It will be hard to replace people from the standpoint of production of innovation or creation of things. But I do think that machines, neural network systems, computers, will begin to contribute in much larger ways than they ever have. I’m looking for more of a symbiosis than a competition where one wins and takes dominance, and the other loses. Saikat, what about you?
Chaudhuri: I agree. I think having machines [that] are able to take care of many tasks that need to be done as part of experimentation will allow people to spend more time doing the creative activities. And to build on your points, Rob, I think that innovation requires, especially the breakthrough kind, many different inputs from many different places. You have to sense and observe different things, whether it’s a market opportunity in one case, a particular technology in another or a pain point in another way. Unless you can feed that into a machine very systematically, humans just have the ability to pick up on those things and combine them in particular ways. I think we’ll still be ahead and leverage these machines in order to get the output much faster and have the impact much faster.
KWHS: Why do companies value employees who can think and collaborate innovatively? And why is it so important to be innovative in today’s business world?
Shelton: Let me start with the second question because they’re both good. But the second one gives me a situation I can talk about right now. We’ve just finished talking to over 1,500 executives worldwide [for our Global Innovations Survey]: 25 different countries, India, a whole bunch of different business environments like technology, health care and education. What we found was that innovation is at the forefront of their thinking these days. It has become one of the most important issues, and in some places the most important [issue] inside of companies. In the past 10 or 15 years, the focus has primarily been on operational efficiency, costs and doing things better. Now there’s a focus on doing things in new and better ways. Industry and business [are] extremely interested in finding not only the processes and the organization that will bring that about, but [also] the people who are in those processes and organizations. Right now for the first time in a long time, innovation is at the forefront of businesses’ thinking, and they’re looking for people that are innovative inside and outside their company. They’re looking for ways to make their innovative capabilities work in collaboration with others, and to yield real results. Your question’s quite good, because I can honestly say that this is one of the biggest challenges to business today. And it’s one that they’re actively working on in the Middle East and in Europe and Africa and Asia, the United States and Latin America. Everywhere you go, this is one of the top issues for business.
Chaudhuri: May I add something to that?
Chaudhuri: I agree with those points. What’s interesting is that we are in a world where technological change is very rapid, globalization is happening, competition is coming from multiple places. In that kind of environment, unless you have a competitive edge in the form of coming up with new things, it’s very hard for a firm to create that value. You don’t have much choice. You need to innovate to even survive.
Shelton: You’re absolutely right. I think that’s always been understood, but for various reasons — partially the tumult of the financial crisis and the status of world politics and financial conditions and economics — it’s come to the forefront. It is a big issue. So in the world of what we do better about education, I can tell you that helping people realize their full potential for innovation, helping folks understand the talents they have, how to use them and importantly how to collaborate with others in the innovation activities, is something that we should be working on, because business values this. In the world of politics and social change and government, it’s also valued. The time is right for a better and bigger focus on growing our innovation potential.
KWHS: On to another question from our teacher network. Stan Wang of Agora Cyber Charter School in Wayne, Pennsylvania, asks about our collective understanding of innovation. “In your experience, do you feel that adults, including educators, recognize the scope and the depth of innovation in today’s society?”
Chaudhuri: The answer I would give is no. Even though they’re using innovation all the time, they may not realize they’re doing so. When you’re sending a package using FedEx, when you’re going to Walmart and expecting your goods to be delivered when you want them, when you’re typing away on your iPad or your iPhone, when you’re withdrawing money from the bank from an ATM machine, all of these are innovation in action. [We don’t always] appreciate it because it has become so much a [part of our lives]. That said, the importance of raising awareness is very critical because if you think about it, without innovation it would be really hard to solve the most pressing problems. If you think about global warming, poverty alleviation, education, all of these matters, if we extrapolate the existing ideas we have, they’re not going to allow us to solve the sheer scale and magnitude of the problems we have in the global society. But if we’re able to come up with new ways of tackling them, perhaps interdisciplinary in nature, that will give us a shot to create a more radical approach.
Shelton: I agree entirely. People don’t recognize it. But I think part of that is because, as you said, it’s all around us. It’s like if you ask the fish, “How’s the water?” They would [say], “What’s water?” When you’re in the midst of it all, you don’t really appreciate the medium you live in. The examples you gave are excellent, and we could go on and on [citing] innovations that have changed the way we live. If you go back in history, there’s a long litany of things that have changed along the way. We are innovative creatures, and we constantly get better at it and do more of it. But we sometimes don’t pay attention to the factors that encourage innovation, that allow it to succeed. We need to pay more attention to those. I think that people aren’t aware of it, in part because it’s everywhere. The other part is that they haven’t had it drawn to their attention. I think it’s time for innovation to come to the forefront on a personal level and on a societal level, as well.