How Entrepreneurial is Your Training?

Entrepreneurship training sucks.   Most of them in any case!

Way back in 1993 I started with my MBA.  One of the first articles I stumbled upon was “Teaching Entrepreneurship through the Classics.”  The author used Shakespeare’s Hamlet and the American author, Ralph Waldo Emerson, to highlight the need to think, to think independently, and to think freely.  Because that is what entrepreneurs are supposed to be able to do, amongst others.

Yet, what do we find?  Most business schools teach entrepreneurship on their MBA programmes and as part of their executive education programmes as a short course.  On this course, they teach you to draw up a business plan, which deals with issues such as analysing the environment, drawing up a management plan, drawing up a marketing plan, and even developing a budget.  They also teach you a few things about Human Resource management.  And then they call it “entrepreneurship.”

If this is how you are going to help yourself to become an entrepreneur, commit suicide today and avoid the December rush!  Said in all seriousness and fully understanding the tragedy of suicide.  But that is what you would be doing in a business sense if that were to be your approach.

I am by no means stating that providing the above skills are not important.  What I am saying is that although they might (probably are) required, they are insufficient in themselves to develop a person into an entrepreneur.

When listening to well-meaning business guru’s(?) talking about the need to teach entrepreneurship, I always asked if addressing the issues mentioned above would truly result in entrepreneurs.  I mostly get a quizzical look.  So as to ask whether I was trying to be obnoxious, difficult, or just did not understand what was being spoken about.

Today, I think I am somewhat closer to the truth.  Shakespeare understood the need for independent thought.  So did Ralph Waldo Emerson.  And that is a skill we need to develop – amongst others.

About two months ago my daughter brought home a book her new boss had provided her, “The E-myth Revisited” by Michael Gerber.  Gerber showed some very interesting statistics.  About 40% of new start-ups died within Year 1.  In fact, about 80% of new start-ups did not last past Year 5.  Of the remaining 20%, a further 80% did not last past Year 10!  That leaves 4% of new start-ups being around after Year 10!  Amazing statistics – and forget about the saying that you get lies, bloody lies, and then statistics!

Gerber identified three very important personas we need to be in touch with, within ourselves preferably.  I must confess that when looking at the more successful entrepreneurs amongst us, I always thought some of them were a few sandwiches short of a picnic!  Gerber’s views support this!

The first persona within us that needs to be present is the Technocrat, or Technician.  This is that part of you that is good at doing something functional, like baking cakes, teaching finance, or whatever.  This is the person that has a bias for action – doing something, something they love doing and have a passion for.  And we normally think that because we are good at it, that we can do it for our own account.  This is the person that likes dealing with short-term and structured issues, which tend to be externally oriented.

The second persona is the Manager.  This is the person that puts the systems and structures into place, making sure the resources are available and being used efficiently.  Control is important, and having satisfied customers as well.  This is the person that likes dealing with short-term and structured issues, which tend to be internally oriented

The third persona is the Visionary, or Entrepreneur as Gerber calls him.  This is the persona that sees the big picture, that looks at a bunch of hills and then builds a gambling and vacation resort in the middle of nowhere, with fantastic results!  Just think about Sol Kersner building the Sun City complex outside of Rustenburg in South Africa.  This is the person that creates the dream, and gets the people on board.  This is the person that is able to work with long-term unstructured issues, both external and internal.

The reality is that most of the stuff that conventional business schools teach us on entrepreneurship courses, tend to help with the Manager.  Yes they are required, but definitely not sufficient.  Without the Technician, and definitely without the Visionary, you are going nowhere in a hurry.  It is probably true to say that we need all three personas.  In an ideal world, we would be in touch with all three within ourselves.  The practical reality is that most of us probably have a bias towards one, and maximum two, of these personas.

A mentor of mine has developed a cassava plant in Nigeria, with a stable supply of raw material, and a factory to produce the refined product.  This not only required the Visionary to see the opportunity, but also the Manager to run the setup.  Without the Technician, everything would have been to no avail.  The truth is that all three are not needed in the same person.  The Visionary could, and did, hire someone else’s Technician.  At some stage, and probably already now, the Manager is being placed under time pressure, and  in some fields someone else’s Manager has already been hired, such as in finance and operations.  The Visionary persona is crucial for the entrepreneur in this example.  It is six years later and the project is starting to deliver.  The ability to see the end result six years down the line, to understand what was going to be necessary, and to take the right business decisions as well as understand the technical functionalities, was crucial for this business!

Another friend was involved as International Sales Director of Psitek, a company punting mobile pay phones in emerging countries in the world.  They developed a distribution channel where they gave small operators the opportunity to develop a business of their own by selling on the air time with the payphones provided to them by Psitek.  Psitek was the Visionary here, creating a link with the individual that would create some form of “customer lock-in and competitor lock-out.”  Again, all three personas are required, but not in the same person, and not even in the same business.

A company doing the same is SABMiller.  They looked at the total supply chain of the beer industry and realized that the distribution of beer was not necessarily something they wanted to be involved in.  As a matter of fact, given current legislation in the USA that precluded them from being in all the elements of the supply chain, they had already been forced to get out of distribution of beer in the USA.  In South Africa they developed a programme of owner-drivers, which made business owners of their employees.  This decision was probably helped on with the knowledge of the USA situation.  Again we have the three personas present, and again not necessarily in the same person or same business.

We have all read about Richard Branson ad nauseum, so you will excuse me if I do not use him as an example as well.

The bottom line?  We need to rethink how we develop our entrepreneurs.  Giving them managerial training and thinking that will make entrepreneurs of them, is like planting a feather and thinking a chicken will grow from that!  We need to look at the person in a holistic manner, and then develop his visionary, managerial, and technical skills, where applicable.  My feeling is that any development that ignores the visionary persona is doomed to failure.

This will require interventions that addresses his/her spiritual and emotional intelligence, their leadership skills and competencies, the ability to think systemically, the ability to transcend the here and now and to deliberate, at a philosophical level, the idealised future we might strive towards.  It also requires interventions to give insight to people about their personality profile, their propensity to stay the course, and to deal with inherent contradictions or paradoxes if you will.  You need to be a philosopher of sorts.

And then of course you need the managerial skills referred to as being standard in entrepreneurship training – the marketing and HR and financial management.  After all, you need to work with a budget and a business plan!

Another source of what is needed is Guy Kawasaki’s “The Art of the Start.”  He condensed the process into five steps:

  • Make meaning – what higher order meaning are you creating/addressing?  The point is that if you fail, at least you fail doing something worthwhile.  This is what keeps you going in difficult times.  It helps you stay the course.  This is what the Visionary should be good at.
  • Make mantra.  Forgot about missions and visions, he says.  Get something that will get your people to work with a glint in their eyes, drooling to add value!  I love the example of Starbucks: “Rewarding everyday moments.” We all have them.  At Starbucks the employees help you with them!
  • Get going.  Don’t build a business plan.  Don’t develop a budget or marketing pan, but start with your business!  Start selling.  Start getting your show on the road.  A good friend of mine in the pharmaceutical industry is doing exactly this!  And succeeding because of it.
  • Build a business model.  Now you look at exactly how you will be creating value for your selected customers and make money in the process.
  • Weave a MAT by compiling three lists: (a) major milestones you need to meet; (b) assumptions that are built into your business model; and (c) tasks you need to accomplish to create an organization.  This will enforce discipline and keep your organization on track when all hell breaks loose—as it will at some or other time!

When looking at Guy’s five tasks, it again brings us back to the three personas, and highlights for me the importance of the visionary!  And this persona is not developed by teaching management stuff!

Next time you want to do a course on entrepreneurship, or help somebody with it, be sure to think about the above.  It’s just too bloody expensive to ignore!

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4 Responses

  1. Fabio says:

    Well Done , Johan. One of the first time i see crafted ideas with more oxygen. Yes, I perfectly agree with the comment.

  2. Louw Burger says:

    Excellent!I once met the then Chairman of Imperial Group who told me that one of the things he tracks is the number of “Imperial Millionaires” – people in his company whose stock options are worth a million bucks or more. Interesting way of encouraging entrepreneurs in a corporate giant.

  3. This is a very timely entry on your blog. We are in full preparation of our February Entrepreneurship conference at EFMD and we are looking at impact of research, education, training and policy on the life and success of the entrepreneur. Your blog posting has a lot of truth in it, and I also know that from my personal experience. Being married to a visionary, we started our own business (a B&B). My strengths are complementary to his and link to the two other personae you mention.
    Thanks!

  4. Theodore Babu says:

    Excellent article Johan!! This is the real issues that needs to be addressed in business schools with regards to entrepreneurship. Couldn’t have done it better. Your blog makes for quality reading.