From Cost Accounting to Design Thinking – A Lesson in Transformation

One of the central figures of the Stanford SEED program is Professor Jim Patell – the Herbert Hoover Professor of Public and Private Management at the Stanford Graduate School of Business (GSB). His initiative, curriculum, and involvement in designing products and services for the developing world have been pivotal to the launch of SEED. Jim has been in Accra for the last three weeks, sharing his enthusiasm for design thinking with the SEED entrepreneurs and Ghanaian high school students.

Ed and I originally met Jim at the GSB in 1977, where he taught Cost Accounting as part of the First Year core curriculum.  Ed was in his class, while Jan was in a different section, so only knew him by sight.  And what a sight.  All of the students thought he was younger than we were!  He, and another professor, Mark Wolfson, looked very young. We called them “whiz kids” since they already had PhD’s and were professors.  We also called them the “accounting guys”, but we now know that was selling them short.

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So, when I tell my friends from the GSB class of ‘79 that our Accounting Professor, Jim Patell, is a renowned expert in “Design Thinking”, they are intrigued.

Chatting with Jim over lunch recently, I learned that his career has been much more than an “Accounting to Design Thinking” transformation.  In his academic life, his path has followed conscious choices, amazing mentors, and brilliant collaborators.

Jim’s higher education started out at MIT, where he studied from 1966 to 1972, during the height of the Vietnam War. He worked at MIT under contract to the Department of Defense to help fund his education.  During this tenure, he worked on the design of the Spruance Class destroyer and also worked for Dr. John Craven, who had been the Chief Scientist in the Polaris-Poseidon FBM submarine program. The years spent at MIT were a time of amazing technology development, and he received a BS in Navel Architecture and Engineering and a Masters in Ocean Engineering.  And, he studied Finance under Bob Merton, who later won the Nobel Prize in Economics in conjunction with Myron Scholes for option pricing.

After MIT, Jim had the choice of getting an MBA at Stanford or earning a PhD at Carnegie Mellon University, where Professor Bob Kaplan, “saw himself in me” (Jim’s words).  Kaplan also had an engineering degree from MIT and a PhD in Operations Research from Cornell.  As a formidable mentor, Bob convinced Jim to go to Carnegie Mellon, where he received his PhD in three years.

In 1975, at 27 years old, Jim landed a job on the faculty at the GSB.  Initially, he taught Financial Accounting and Cost Accounting as part of the First Year Core Curriculum.  According to Jim, “Accounting and Finance were closer together then”.  His research focused on empirical finance and the effects of corporate disclosures on stock and option markets.

After teaching at the GSB for 6 years, Jim and Mark Wolfson both became Visiting Professors at the University of Chicago.  During this year, Jim traveled to Africa and consulted with SAB (South African Brewing) as they were divesting their holdings in Zimbabwe (formerly Rhodesia).  Little did Jim know that many more African adventures would be in his future.

Jim returned to Stanford and became a full professor in 1985.  He became an Associate Dean for Academic Affairs at the Business School and managed many innovative programs, as well as revamping the Public Management Program.  He served as Associate Dean for six years, and when left the Deans’ Office, he shifted fields from the Accounting group to the Operations and Information Technology group in the GSB.  He taught the core Operations course for seven years, developed Operations electives, and then taught the core Computer Modeling course with Jeff Moore.

In a Computer Modeling elective in the late 90’s, Jim offered two extra units for students who wanted to hone their skills on a real-world project.  He found out that non-profits were great clients for student projects.

 “I learned that when students do a project for for-profit companies, the companies say, ‘Thanks so much.  Well take it back and evaluate it.’  But when the students work for non-profits, the non-profits say, ‘Thanks so much.  We’ll begin implementing your recommendations next Wednesday.’’”

The Modeling course ran for two years, and then in 2003 Jim launched the course now entitled, “Design for Extreme Affordability (aka “Extreme”). http://extreme.stanford.edu/

This “Extreme” class, initiated by Jim, David Kelly of IDEO, and one other professor, encourages graduate students from various disciplines – Business, Engineering, Medicine, Law – to form teams to learn about the needs of the poor in the developing world and design solutions to meet their needs.  Over the last 10 years, this course has grown into a very popular magnet for grad students (who have to survive a competitive application process to get in.) And, many long-lasting solutions have come out of the course, including Embrace, a sleeping bag incubator for at risk infants in rural villages and d.Light, a solar powered lantern that allows kids to do their homework without kerosene fumes in their hut at night where there is no electricity.  Many projects have turned into successful companies, which are exploring new models of business structure and governance.  Even the tax laws in California are changing to fit the needs of these social businesses that come out of this course.

Also, the course, and collaboration between Jim, David Kelly, and others, provided the foundation for the development of the “d.School”, also known as the Hasso Plattner Institute of Design at Stanford. http://dschool.stanford.edu/

Bob and Dottie King were initially introduced to Jim during an open-to-the-public final presentation of student projects from “Design for Extreme Affordability”.  They were intrigued and inspired by the students and their work.  They met Jim, and their friendship began.  The rest is history.

As in any life story, this brief synopsis doesn’t do justice to the rich and complex subject matters that Jim has mastered over his career.  But, hopefully it paints a picture of the amazing journey of a Professor who never sits still or rests on his laurels.  Constant change. Innovation. Exploring new areas.  What a privilege for us to be with him in Accra to share this part of his personal transformation.

Patell Design Thinking

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