Professor Mukti Khaire's challenge to management students is lofty, even by Harvard MBA standards. Don't just change the way people live, change the way they think. Change culture.
In her new elective course, Creative High-Impact Ventures: Entrepreneurs Who Changed the World, Khaire looks at ways managers can team with creative talent in six "culture industries": Fashion, publishing, art/architecture/design, film, music, and food. Her subjects include fashion pioneer Chanel, publishers Penguin and Atavist, film icons Variety and the Sundance Institute, Indian art auction house Saffronart, and food businesses Whole Foods and the James Beard Foundation.
Khaire created the course, she says, because these industries function in fundamentally different ways than those in industries more familiar to traditional HBS MBAs.
"You don't manage the creative process, you enable it"
"I worried about students going into these culture industries only thinking in terms of traditional management styles and industry structures, bottom lines, and financial incentives, without thinking about what 'creative content' and 'cultural product' means, what impact it can have and what motivates creative talent."
For example, most CEOs have little difficulty with a top-down management style and expecting their directives to be executed. But that model wouldn't fly at Chanel (or for that matter, any creative firm). "If you tell Karl (Creative Director Karl Lagerfeld) what to make, that's not going to work," Khaire says. "You don't manage the creative process, you enable it."
Culture-changing entrepreneurship explored in the course include:
Chef James Beard. During Beard's time of highest influence, the 1950s, great food and eating out were equated with European cuisine—American food was considered too rustic and parochial. Beard changed how the world thought about American food, in part by insisting on local ingredients and tapping into regional cuisines while exhorting other chefs to do the same. "Beard recast American cuisine, which had been underappreciated, as gastronomically valuable, thus promoting a different, locally sustainable food culture. Somewhat similarly, Saffronart harnessed academic discourse to recast twentieth-century Indian art as modernist, and therefore aesthetically and economically valuable," Khaire says.
Penguin Books. Before Penguin was founded by Allen Lane in 1935, serious literature—"good books"—was expensive and bound in hardcover; only lurid fiction was sold in paperback. "The good books were out of reach of all but the wealthy segments of the population," Khaire explains. With paperbacks, Penguin was able to lower the cost of good books—both reprints of classics and later new works by contemporary authors—and make them available to a wide audience. "Penguin's innovation was a delivery innovation" that opened people's eyes to a new world of literature and ideas, she says.
Sundance Institute. Founder Robert Redford's contribution in legitimizing indie films is akin to what James Beard did for American food. Sundance made indies and the different stories depicted in the genre more acceptable by "providing a way for people to understand independent cinema," Khaire says—establishing a criteria of quality and providing a stamp of approval. In workshops, selected filmmakers were mentored to realize their projects.
"I find it hard to believe that merely having an iPad will lead you to content that might make you change the way you think."
"We get inspired by people like Robert Redford, like Allen Lane, like James Beard, all of whom are true category creators," Khaire says. "They created new categories in the market for cultural goods and in turn shaped the way people think."
Doesn't move the culture
These individuals and their organizations are rare birds. Consider how difficult it is to create such culture-shaking products by thinking about other incredible innovations that, while inventive and useful, are not game-changers in the same way. In Khaire's view, the iPad, the automobile, and even the printing press, while revolutionary technologies, did not change culture on their own; rather, along with other social and economic changes, these products enabled changes.
What, the car not a culture-changer?
"I would never say cars didn't have a cultural impact, ever," she says. "But the act of buying a car alone does not go against what you hold dearest, against what is your sense of identity, against what you think is appropriate and valuable, the way that radical new cultural products do. When women started using the car—that alone did not change culture. But, when they used the car to go to work, which in turn was made possible by widespread upheavals that occurred at the time—that did. The car was an enabler. Technologies seldom change culture by themselves; they might enable change in significant ways, yet without new ideas that question our sense of right and wrong they matter less.
"I will admit," Khaire continues, "that most people don't like this kind of dichotomy. 'The iPad changed the way we think,' they say. The iPad has certainly changed the way we live, and it certainly has made it easier to access content that may change the way we think. But I find it hard to believe that merely having an iPad will lead you to content that might make you change the way you think."
The business of innovation
Creating culture-changing products and building industries around them is difficult on a number of fronts. First, almost by their nature, they rub up against accepted norms and conventions of appropriateness and value. "The very act of creating a market for some of these products that go against conventions and norms of what we value, and of what we think is appropriate, means that you have to change what we think is appropriate."
Take rap music and hip-hop culture, which sprang from a world that few people knew or understood. "Hip hop at the time didn't fit into anybody's conventions of what was appropriate and valuable," Khaire says. "It offended as many people as it delighted. But the fact that it sold is itself an indicator that somewhere, somehow, you managed to change people's way of assessing something as appropriate and valuable."
Market-creating innovations also are difficult to introduce because there may not exist accepted criteria for evaluation, Khaire adds. When first encountered, Picasso's cubist deconstruction of the human form made viewers uncomfortable.
So at the outset you might be selling an idea that most people can't grasp or understand, that might make them squeamish, and where there are no accepted definitions of quality or value. One result: Demand is highly uncertain.
What does business management mean in this context? For some MBA students, the answers are something of an awakening. The ways that they have traditionally added value—by implementing top-notch business practices, using deep analytical skills to judge an opportunity or problem, creating process innovations—don't necessarily work in creative industries.
For example, when some of her MBA students look at the art market, they want to make it more "efficient" by using technology to get rid of all the intermediaries—galleries, museums, art catalogs—to put the artist in direct touch with buyers.
"The problem is that there is a reason why these industries have evolved with the structure they have," Khaire points out. Art-works have much more symbolic value than material value. "The criteria for value in these markets are different and not immediately obvious to consumers. So you need all these people, the seemingly inefficient intermediaries, to actually do that. They are constructing value, making market exchange possible; they are not just brokering the meeting."
"If you can shift one of these elements you can actually create a new market"
So instead of trying to get rid of intermediaries, one could figure out how to become one. "We talk about Variety, we talk about Sundance; they don't actually make films but are integral to creating a market for them. You can't imagine the film industry now without the Sundance Film Festival. This intermediary role is one where our students can enter the market."
It's also essential that managers understand the role of the creator in creative industries, Kahire emphasizes: how they work, their values, the fact that, as she puts it, creativity is not a general-purpose ability. "Salman Rushdie is immensely creative, but he writes 'Rushdie' books, and his publishers have to create a market for his books, not ask him to write books that will sell more easily than literary fiction," she says.
Managers in these industries have questions they must ask themselves, says Khaire. "Business school students do have a role in these industries, and being part of cultural change is potentially within their grasp. To think about how companies have dealt with this power in the past is the important thing. To think about whether this power is at odds with the profit motive is another interesting and important thing."
Another question: Do leaders in these industries give the audience what they want, or something new and different? Of course, the safe thing to do is to sell work that aligns with prevailing cultural norms and tastes, ensuring strong sales. But the sense of purpose that many in these industries have also propels them to introduce new work that questions and challenges these norms, even though that is more risky.
"So you have to ask, 'Do I want to direct or reflect? Do I want to simply reflect people's tastes as I see them or do I want to produce something that might change that?'"
Few creators set out to change the world. "Creators are really just creating, out there saying this is what I do. And then you—the record labels, agents, and other intermediaries—perform the role of saying this is something interesting that I would like people to see, hear, read. What they seek is to be showcasers. It is true of people in these industries that nonpecuniary motivations are fairly prominent and high."
During the course Khaire puts up a slide of the "4Cs," showing the intersection of commerce, culture, consumption, and commentary. "Commentary influences culture, which influences what we consume, which is influenced by what is actually out there in the market," she says. "If you can shift one of these elements you can actually create a new market."
In many ways the course—a sociologically-grounded way of thinking about business, culture, and impact—is not typically associated with MBAs, Khaire observes.
"It's very cool that we get that chance here. I can do this only because the School supports innovation and experimentation. That's the paradox. It's unlike HBS, but it could only be here."