Dean of Bothell School of Business at University of Washington, Sandeep Krishnamurthy, discusses the importance of business school-industry collaborations in working toward digital transformation.
Sandeep Krishnamurthy: [0:15] If you really think about how business schools have to shift, the first idea is that our curricula have to match what is happening in the real world. We now talk about the other FAANG companies. I would add Microsoft to that. We're talking about Facebook, Apple, Amazon, Netflix, Google, and Microsoft.
[0:34] Six companies are completely changing the face of the economy, not just in our country but globally. If you think about the business schools, first of all, I would say business schools have to study what these companies are doing and how they're implementing technologies to affect the lives of customers, the lives of companies, the lives of employees.
[0:55] Second, we want to think about the models that have originated with these companies, how they can be sent out to other industries, and how they can transform other industries.
[1:06] Simple things, a lot of people are still thinking about basics such as process automation, but you take a company like Amazon, for example. If you think about how business schools should shift, Amazon has already moved pricing from the way retailers typically did.
[1:25] Some of us may have had an internship where we went to the retailer, took a price sticker, and put stickers on everything, or changed it once every month. The frequency of price change was not very great.
[1:37] Now, Amazon has algorithmic pricing. Algorithms scan the market. They scan actual behavior by customers. They scan actual behavior by competitors. Algorithms are setting the price for hundreds of thousands of products.
[1:52] You say, "How is this going to affect what happens in business schools?" We cannot teach simple demand theory anymore. We have to talk about, "What are the rules that you will have to put in place if you weren't designing an algorithm that were to set the price?" Completely different way of thinking.
[2:11] Strategy has to change. Marketing has to change. Accounting has to change. This is all pervasive. Just studying the practice of these companies is huge.
[2:21] Another example, Netflix. Netflix knows more about you than you do. Netflix, for example, I tell my employees, "Netflix knows what you're going to watch the night." This is true, because you started something. You didn't finish it. They know that your pattern is that you finish half of an episode and then you come back to it the next day because it becomes too much.
[2:44] Then you start the episode after that. They know that about you. They're ready for you. They're going to create a personalized curated experience for you even before you turn it on.
[2:56] This is the kind of prediction personalization that's going on. Now, you ask yourself, "Can we take this and apply it in the retail sector? Can we take this and apply it in the healthcare sector? What will happen if a doctor knows more about me than I do?"
[3:11] This is a sort of advance that I think business schools have to start thinking about where we learn about the best practices that's happening in these transformative companies. Then think about, "What are the applications beyond the use cases that these companies have already implemented? How do we take those to new industries? How do we take those to new practices?"
[3:32] Of course, none of this is possible without collaboration with industry. Industry input is really the way that we understand if we're on track or if we're not on track. At the same time, industry folks do not have some of the substantive academic knowledge that our faculty members do.
[3:52] It's about having that dialogue. It's about talking about, "What are the problems you want to solve? What are the challenges you face?" Getting that information from industry, and then taking it to our faculty, and talking about, "Look. Industry has these issues. How do we find a way to solve them through our programs?" I think those are the dialogues that I think that will have a big impact.
[4:16] We have been working with industries through multiple ways, through an advisory board, through guest speakers, but also to find a way by which we are getting systematic—what we call voice of the market reports from industry—where we're learning from them in terms of what is changing, where are the big investments, and so on.
[4:40] For example, when talking to people at Microsoft, we recently learned that one of the biggest investments that they're making is in Microsoft Teams. A lot of people have not heard about Microsoft Teams. It's coming though.
[4:53] Now, I have the opportunity to take information that I received from industry, go back to my community, and say, "This is a big investment the company is making." They want to have a situation where all businesses are using Microsoft Teams because they think it is better than Zoom, better than Slack, better than monday.com, etc., etc.
[5:12] They're building functionalities that are above and beyond all competition. It's a recognized brand right in our backyard. If the faculty are receptive, we go back to industry, and say, "Let's talk about how you can provide free accounts and training for our faculty, and create those bridge ways by which these technologies are now part and parcel of what we do." That journey is just starting now.
Filmed February 2020 at AACSB's Deans Conference in Nashville, Tennessee, USA.