Business Schools Need to Start Teaching Students How to Think Like Steve Jobs

UT entrepreneurship professor says future-focused imagination can be taught and it’s high-time business schools started.

Based on the research of Luis Martins

Steve Jobs had a unique take on strategy: “You can’t connect the dots looking forward; you can only connect them looking backwards,” he said. “So you have to trust that the dots will somehow connect in your future.”

Trusting those “dots” to connect certainly worked for Jobs. And it worked for the visionary strategists behind such breakout organizations as Whole Foods Market Inc., Starbucks Corp., and Cirque du Soleil.

But how, exactly, did they turn good ideas into brilliant success stories? How did they think their way to the future? That’s the question that researchers raise in a new theoretical paper published Sept. 10 in the research series Advances in Strategic Management. The paper reviews the current literature on strategic thinking and pleads for more study on the key component that Jobs seems to describe: imagination.

Imagination is key

“We’re arguing that there needs to be much more academic research on how imagination works as a key component in successful business strategy,” says Luis Martins, chairman of the department of management and director of the Herb Kelleher Center for Entrepreneurship at Texas McCombs and the paper’s co-author.

It’s not that the research to date is invalid, but the bulk of it focuses on how strategists draw from the past and how they act in the present — not enough, says Martins and co-author Violina Rindova of the University of Southern California, on how they imagine into the future.

“If Whole Foods were a replication of the past, it would be just one more small health food store.” — Luis Martins

Business schools have long taught business strategy through case studies: having students look to at a specific business’s past experience as “a lens through which to conceptualize strategic opportunities,” Martins says. It’s also standard practice to teach how to shift business tactics in the present — staying mindful and attentive and using simple rules to adjust to rapidly changing environments.

But when it comes to fully grasping — and being able to effectively share with students — insights about the type of thinking that gives birth to game-changing business innovations, faculty are on their own without a body of academic literature to support them. While there are plenty of examples in the real world of companies whose success is based on breaking old molds, the standard classroom methodology of studying those companies’ pasts is not the same as getting into the imaginative headspace that created that success.

Moving beyond the past

“When you think about Whole Foods or Starbucks — those are not just replications of the past,” says Martins, who, along with Rindova, studied Whole Foods for another paper illustrating how strategists use their values to envision novel business models. “If Whole Foods were a replication of the past, it would be just one more small health food store.”

Instead, Whole Foods co-founder John Mackey employed a different imagining of the future, which combined the concepts of an open-air farmer’s market/series of health food stalls with a big grocery store. Before the introduction of Whole Foods, organic produce and health food sales were very much mom-and-pop kinds of small-time businesses. “What Whole Foods did is the kind of thing that changes the mold within any given industry,” Martins says.

Similarly, Martins and his coauthors describe in another paper the mold-changing strategy behind Starbucks. By combining the concepts of a specialty coffee retailer with a bar, Starbucks founder Howard Schultz replaced the salesperson with a barista and greatly elaborated on the standard coffee shop menu; then he imagined allowing people to customize their drinks — “just like in a bar,” says Martins. This combination of ideas completely transformed the concept of “coffee shop.”

Successful business leaders may also borrow strategies across very different industries, the paper notes. For example, Rent the Runway has been described as “a Netflix for dresses,” as the founders adopted a strategy for renting clothing that was analogous to Netflix’s subscription model for renting movies.

Of course, any of these businesses could have failed had leaders not accurately predicted the trends, Martins says.

“You can have the best idea, but if the timing is wrong, then you’re in trouble.” — Luis Martins

Case in point: grocery delivery services are enjoying great popularity today, both online through AmazonFresh and through local supermarkets like Kroger and HEB. Web Van was also a grocery delivery service, but it was founded in 1998… and filed bankruptcy in 2001. “It just so happens that the timing was off. They anticipated it, but they didn’t anticipate properly.”

Design thinking

Another of-the-moment concept in business strategy is the role of design thinking. “We want to see more research into how you can fundamentally use design to change how you can compete,” Martins says.

He points to Jobs as an example of a strategist who was meticulous about design. When designing cases for the iMac, Jobs’ team visited a jellybean factory to study how to make the translucent colors look most appealing. Speaking on Mac OS X’s Aqua user interface, he told Fortune magazine, “We made the buttons on the screen look so good you’ll want to lick them.” And Jobs carried that aesthetic sense to the unseen recesses of Apple products, insisting that even the rows of chips on the circuit boards look good.

“For him, the design was the foundation of how he competed, and he transformed the whole industry.”

Cognitive leaps

To get into the mind of a strategist like Steve Jobs, Martins and Rindova propose drawing on theories from sociology and psychology to uncover the cognitive mechanisms that enable leaps of imagination.

Martins says understanding strategic imagination is imperative in today’s business climate, where “we are running out of runway for mass-market thinking and low-price thinking.”

“Most of this stuff is inherent in people’s brains. It’s already there,” Martins says. “We just don’t exercise it, and most strategists themselves don’t exercise it, and that’s because they’ve never been taught how.”

Indeed, the paper cites research that found only 15 percent of the executives studied handle creative, idea-generating work themselves, rather than delegating it to others.

“They’re so busy with running the present, and whenever they encounter something new, they’re conditioned to think about, ‘How did we deal with something similar in the past?’” Martins says.

“Since most of a leader’s cognition is based on the past and the present, we have not given balanced attention to the future — imagination.” — Luis Martins

“But when we do, I think we are going to be able to develop reliable ways to teach our students how to come up with really new markets and whole new opportunities.”

“The Three Minds of the Strategist: Toward an Agentic Perspective on Behavioral Strategy” was published in Advances in Strategic Management.

Story by Judie Kinonen