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Entrepreneurs: Do they really need a Business School?

The world is full of famous entrepreneurs from Steve Jobs to Bill Gates and Richard Branson or Martha Stewart. But few of them have done more in a business school than “to deliver a speech”, muses “The Economist” about the belief held by those same schools that they can teach entrepreneurship. After all, many in the business community suspect that the impulse to start and run a business has more to do with genetics than classroom experience. A recent study now confirms these intuitive beliefs.

Scott A. Shane from Kings College, London, writes in the “New York Times” about his extensive research: “The tendency to be an entrepreneur is heritable. We found these heritabilities were substantive regardless of what indications of entrepreneurship we measured: owning or operating a business, the number of businesses owned and operated, starting a business, having engaged in a start-up effort or the number of years spent self-employed. The heritabilities can be seen in analysis of multiple databases and can be seen in the research of other scholars as well as our own.” If this research is valid it then invites one question: does an entrepreneur really need a business-school education?

Well, the best-known schools in the field don’t actually profess the ability to create entrepreneurs, rather they want to nurture their innate ability. Timothy Faley of the Entrepreneurial Institute at Michigan’s Ross School of Business explains: “A good idea is not enough. You need to know how to transform a good idea into a good business.”

The modern entrepreneur is indeed faced with a more complex world than when Bill Gates began to re-invent computing. In the old days new businesses had to move through a distinct series of growth steps - garage, local, national and international. Today, thanks to the IT revolution start-ups can leapfrog these stages and go global right away, encountering a whole new set of challenges. In this context, according to one of the well known schools for entrepreneurs, EM LYON in France, the increasingly diverse nature of MBA classes can help the gifted  entrepreneur in three ways: by plugging them into an international network of contacts, by preparing them for the pitfalls and opportunities associated with dealing across different cultures and by exposing them to the different ways that business is conducted around the globe.

And then there is “intrapreneurship”. The thinking now is that entrepreneurship is no longer just the playground of the small company, but should be applied and practised in organisations of every size. After all, too many large organisations calcify once they reach a certain size. What better way to shake this up than to throw a few ambitious mavericks onto the corporate floor? Only to create the sort of anarchy that resulted in the stages of the excess in the last boom years, counter the critics. Veronique Bouchard, who teaches on the Global Entrepreneurship Programme at EM LYON insists that intrapreneurship does not mean to hand the corporate reins to gamblers or “mad traders”.

What she advocates is harnessing the innovative resources that will be present in every thriving business by creating an environment which encourages new ideas and approaches, but with in-built checks and balances. By doing this an organisation will avoid the “spend because it’s there” attitude that develops when individuals are afraid of abandoning redundant projects because they fear they will not be able to access funding again.

To make this truly effective, business schools should not just be educating inspired intrapreneurs. Perhaps they also need to be educating the businesses which host them.

boss.blogs.nytimes.com
www.economist.com

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