Schools think too narrowly on entrepreneurship; Identifying new business opportunities should be core to management education

February 24, 2013 11:46 pm

Schools think too narrowly on entrepreneurship

By Tim Faley and Peter Adriaens

Identifying new business opportunities should be core to management education

Growth is the top concern of corporate executives, economic developers and government officials desperately trying to reduce unemployment. That growth will be driven by entrepreneurs creating new businesses and new lines of business within existing companies.

Institutes of higher learning are responding with courses and dedicated entrepreneurial centres. In the US alone, the number of schools offering courses in entrepreneurship has grown from fewer than 100 in 1977 to more than 2,000 today. These institutions hold the promise of teaching those skills necessary to forge a new generation of successful serial entrepreneurs. But that dream has been derailed.

In fact, the promise of entrepreneurship is being corrupted by false mythologies. A false mythology about entrepreneurship, particularly prevalent at today’s universities and business schools, is stifling entrepreneurship.

Entrepreneurs need more than an idea, a pitch and some cash to build great companies. Graduate management schools, which should be the beacon of sanity in this debate, while consistently communicating that it takes two years to learn how to manage an ongoing concern, often treat the creation of such a concern as trivial – a topic that can be mastered in a weekend exercise or week-long immersion class. What is the message in that?

Many business schools think about entrepreneurship far too narrowly. They believe that it is only about students creating cute little businesses and lump the subject in with other student services and club activities.

In fact the very opposite is true; identifying new business opportunities and managing their growth should be core to what business schools teach in the 21st century. Entrepreneurial skills – the ability to identify opportunities and threats, to formulate and assess businesses around those opportunities, to put them into operation, to fund them and grow those nascent ventures – are critical for any organisation concerned with growth. Business schools have a very different role to that of incubators. Business schools have a knowledge and skill-building mission. The focus should be on the fishing, not the fish.

Entrepreneurship is a profession. Let us end the debilitating myth that entrepreneurship is a magical gift bestowed upon certain individuals and approach it like a profession; a serious topic of study that takes training and years of experience to perfect. There will, of course, always be gifted individuals. That is true in any profession. The fact that there are exceptionally gifted surgeons does not preclude the teaching of surgery, or music, or engineering, or any other profession. Entrepreneurship should be no different.

Business schools should begin by teaching failure. Not just the avoidance of poor strategic decisions or bad execution, but the sober realisation that most ideas, as Peter Drucker said long ago, do not hold up to the rigour of business. Business schools should demonstrate how to evaluate business ideas and should cull the weak ones, rather than allowing students to continue to advance business ideas that have no chance of success. A cull of this sort should take place before a business plan is ever written. Discovering and launching a new business or line of business is not – or at least should not be – a random process. Business schools should not continue to sit back and wait for lightening to strike and then nurture those sparks into flames. Schools should be teaching how to create entrepreneurial sparks, teaching opportunity identification, business formulation and assessment, in addition to business planning, identifying funding resources and growth management.

Entrepreneurship should be a highly valued profession, not a get-rich-quick scheme. There needs to be an end to the “lottery” mentality and instead academic rigour needs to be put into the process. Individuals are being damaged, giving up jobs and squandering retirement savings to buy these lottery tickets. Existing companies are not faring any better. We all suffer from a depressed economy as a result. Business schools need to lead the way. To those institutions that are struggling against the tide and are doing exactly this in their classrooms and programmes, we applaud you. For the remaining charlatans, please exit stage left, your fifteen minutes are up.

The writers are, respectively, managing director and professor of entrepreneurship at the Zell Lurie Institute at the University of Michigan’s Ross School of Business

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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