Aloha, and mahalo for reading Talking Story! Welcome to our August Ho‘olaule‘a.
This is Part Two of my interview with Tom Ehrenfeld, business journalist, and author of The Start Up Garden, How Growing a Business Grows You.
Rosa:
There has been much debate on the value of business school, and if an MBA is worth the time and effort it takes versus jumping right into corporate life and gaining first hand experience. What kind of reinvention in business school curriculum is necessary to best serve the potentially emerging entrepreneur? Besides instilling a love of lifelong learning (and hopefully they do that at minimum) how can business schools provide students with the best jumpstart?
Tom:
Funny you should ask about business schools. While I never got an MBA, I worked for almost three years as an editor at Harvard Business Review, which is published by HBS, and so I had a first-hand look at the process. In short my feeling is this: a business degree absolutely teaches a few important skills, the most important of which are probably the ability to craft a strategic eye and the skills to parse a balance sheet—to use finance as a tool. But otherwise I am very cynical about the general education, and believe that it’s probably best for individuals who go to graduate school to study a field in which they will probably do business: biochemistry, electrical engineering, forestry, macrame, cooking, design. I think it’s much easier to develop the appropriate business skills to serve a vibrant startup (which delivers a great product) than it is to conceive a great product/service to plug into your high-powered but generic entrepreneurial vehicle.
Moreover, most great market niches or product opportunities are discovered by people who are already in or adjacent to that space. They are doing something or working in a market and realize that people need something that isn’t quite out there, and certainly not in the way they can realize it. For these folks it’s critical to develop sufficient entrepreneurial skills to nurture their venture, and hopefully use that experience to continue to grow…but this really doesn’t require a business degree.
In some ways, I think the best type of entrepreneurial business school program would blend in a strong apprentice-type element, getting the students out there in the field trying stuff out. Doing it for real. Learning from experience. Otherwise I find it hard to critique the business school experience. Frankly, even today I find the concept somewhat of an oxymoron….
So. Yes, it’s great to learn the key tools of financial analysis and strategy, and getting a strong high-level understanding of what business really does. But this can never compare with developing great business skills in the process of realizing a business you are so passionate about.
Rosa:
Even in “big business” one of the most sought-after qualities of prospective high-level executives is called the “entrepreneurial mindset.” What do you see as the difference between the entrepreneur and the person who is best advised to remain in those high echelons of corporate life?
Tom:
I believe that entrepreneurs are far more willing to have uncertainty in their life than folks in big companies. Unlike big company lifers, they are comfortable with a lack of structure, or the prospect of having to create their own. This does not, on the other hand, mean that natural entrepreneurs take more risks than folks in big companies. In fact, quite the opposite: because entrepreneurs have fewer resources on hand and a greater need to husband these resources, bootstrap their capital, and score high-leverage, they often take far fewer risks than people in big companies who can squander resources with essentially no consequences. Therefore they learn to constantly mitigate risk, to continually reexamine where they are and what new opportunities their current position points to.
I also think that entrepreneurs need to be far more holistic and multi-faceted in their approach to business—they need to “see” the business at a very high-level, and they need to have the grit and know-how to translate this into success. Folks in large companies rarely need this set of skills, which are kind of like having both big-picture vision—and the skills to develop this picture in the darkroom! They can excel at one thing, such as finance or operations or HR or just about any one thing that really benefits the company—without having to develop these other traits. That’s not a bad thing at all—only if they are forced, or choose, to take on something for which they are not qualified (or which won’t break the company if they can’t make it work.)
Romantically I think we all have visions of entrepreneurs as adventurous, driven, type A folks who just can’t live in the corporate setting. Practically, I think that image is true quite often. But it’s still only a stereotype. There’s more blurring of the lines today than ever before.
Finally, a random thought: Peter Drucker’s Innovation and Entrepreneurship, which is probably my favorite book about entrepreneurship, is far more suited to entrepreneurs within large companies. But the applications of his ideas are useful to everyone.
More of Rosa’s interview with Tom tomorrow: do check back with us as we talk about the advantages of the small business owner.
Related Post: Part One of our interview.