Masterclass: In a rapidly transforming business environment, innovation is critical and demands an entrepreneurial mindset and new skills

Masterclass: In a rapidly transforming business environment, innovation is critical and demands an entrepreneurial mindset and new skills

The Middle East Centre recently hosted a masterclass delivered by Professor Oswaldo Lorenzo on ‘Entrepreneurial Mindset for Business Innovation’, for students, alumni and guests joining online. Oswaldo is an entrepreneur, researcher and Professor of Digital Transformation Entrepreneurship, Innovation & Operations and is a visiting Professor at Alliance Manchester Business School teaching on the Global Part-time MBA programme across the international centres, including the Middle East. Professor Lorenzo is also CEO of Unikemia - a tech startup based in Spain working to create transformative learning experiences that enhance the development of professionals to help tackle corporate challenges.

Professor Lorenzo led the audience through the masterclass, linking it to the module taught on the Manchester Global Executive MBA and a book authored by the module teaching team entitled ‘Entrepreneurship, Innovation and Technology’. He drew on information, knowledge and cases from the book, as well as Oswaldo’s own experience of working in the entrepreneurial world.

Introducing the masterclass, he said: “An entrepreneurial mindset is characterised by attributes such as risk taking, creativity, initiative and the ability to adapt to change. It's about seeing opportunities where others see obstacles. Employees with this mindset are not just executors of tasks, they are proactive thinkers, problem solvers and value creators”.

Professor Lorenzo described the current business environment as ‘exponential times’, driven by the exponential technological change we are experiencing. “The big challenge here is for companies (or institutions, governments, countries or regions) following only linear growth. The important question is how fast are you changing and adapting your business model, your operations, your capabilities? How fast are you adapting to the exponential growth of technology compared to your competitors?

“The important aspect is that we need to develop capabilities to change and adapt and implement and adopt technology faster than others. That's the real competitive advantage at the moment worldwide. Then an entrepreneurial mindset is critical for this type of competition. We need employees who are able to adapt quickly to this exponential growth and turn potential disruption into opportunities for innovation. And when we talk about entrepreneurship, people may focus more on startups… but we need to have entrepreneurship within companies or corporations, public institutions, as well. We need people with this mindset able to transform, to adapt the business, to transform the business model, the organisational model, the way we support customers, the way we are supporting employees...more quickly than others.”

According to Professor Lorenzo, there is increasing pressure to develop adaptability and agility in organisations and in order to achieve this, we need to develop an entrepreneurial mindset within employees. This is creating demand for new types of skills from employees and from managers in organisations worldwide. According to a study by McKinsey, this new digital technological environment requires a foundational type of skills from employees. Firstly, skills as part of a digital environment in which new technologies are emerging and changing rapidly. Secondly, new skills that create more value than artificial intelligence and automated systems. And finally, we need the skills to keep adapting to new forms of work and new types of work.

“McKinsey is suggesting here that we need a superior or higher level of cognitive skills because AI and technology is going to take control or execute, performing the basic cognitive skills. Generative AI is writing, reading, summarising, doing every any kind of basic cognitive skill. A manager needs to develop a higher level of cognitive skill, like critical thinking, creativity, innovation.

But there's also another key skill highlighted by Professor Lorenzo - entrepreneurship. According to McKinsey, it's fundamental in this new business environment to have a high level of courage, risk-taking, and innovation within an organization, with the energy, passion, and the ability to break orthodoxies or the status quo.

“We need people willing to take risks and experiment even if there may be a high probability of failing. Failure is an important part of the innovation process and accepting failure as a normal part of our activities…is an important cultural transformation for many organisations worldwide. If you want people, employees, your team members to develop an innovative and entrepreneurial mindset, you need to allow them to take risks, experiment and fail. This also implies that you accept that employees bring new ideas, new approaches, new ways of thinking, new ways of operating, and working, and that's fundamental for innovation.”

Professor Lorenzo went on to share some examples in which ‘failure’ also implied a learning process.

“From this learning process, you repeat the experiment. And if you look at any new product, any research and development process in any company, this is the typical cycle. You try to test your hypothesis, test your assumptions and receive feedback…if this is not the way to proceed, then you need to iterate. You need to pivot, learn from this process and repeat again with the new knowledge, new insights you have acquired. There are different methodologies around this topic - Lean Startup Prototyping.”

In his famous book, ‘The Lean Startup’, Professor Eric Ries suggested this process of accelerating innovation, based on the traditional Lean Manufacturing methodology created by Toyota, and the application of Lean concepts and philosophy to reduce waste or eliminate waste from the innovation process. This methodology suggests creating minimal viable products, minimal prototypes, proof of concept, go to market, customer feedback on the minimal viable product, and learning.

“I like to use the example of McDonald's – a traditional company in a traditional sector. In the movie, ‘The Founder’, you can see how the model works as the McDonald brothers develop the fast-food model – experimenting and testing the proof of concept, and prototyping. They prepared this different way of making a hamburger, then they tested the model, and they were pivoting, making adjustments until the moment they validated everything and created the first branch, the first McDonald's store based on a new model.”