By Robert Craven, MD at The Directors’ Centre
The “Do MBAs help an entrepreneur?” question is an old chestnut that never seems to be resolved.
Part of the problem is one of ambiguity (what does ‘entrepreneurship’ mean?); part of the problem is one of sweeping generalisations and stereotypes (what does a typical MBA student or course look like?); part of the problem is the confusion of definitions (are we talking about the student/graduate, the programme or the business school?).
So, the first issue is one of definition. What do we mean by ‘entrepreneur’?
For me, the definition is quite clear: an entrepreneur is someone who spots opportunities, gathers the resources and makes it happen. An entrepreneur is not a manager.
Another semantic (but important) difference to qualify is the difference between ‘entrepreneur’ and ‘entrepreneurial’. While an entrepreneur spots opportunities etc, being entrepreneurial is quite different. ‘Being entrepreneurial’ is about being innovative and opportunistic.
You can be entrepreneurial without being an entrepreneur. And most people who think they are an entrepreneur are simply small business people.
‘MBA’ is bandied around to mean the student, the graduate and the course. Sometimes it refers to the whole idea of business school.
A true Masters in the traditional sense, is a serious post-graduate qualification, underpinned by academic and research rigour. You can pick up an MBA for $25 on the internet, or for $50,000 depending on the institution you select. Some are better than others and league tables and accreditation by global organisations helps you to sort the good from the not so good.
There is a stereotype image of the MBA being an inexperienced/academic/theoretical/bright young cannon fodder for the global consultancies.
Another is of the older/asset-stripping/corporate/numbers-driven banking executive. Both stereotypes are exactly that — a stereotype. In fact, there are many, many different business schools and MBA programmes with different emphasis and styles and focus.
Well, really there is no problem apart from too many people using too many sweeping generalisations.
Most small business people would not find the depth and breadth of a full-blown MBA to be highly relevant and appropriate. There are plenty of other programmes that satisfy their needs.
A ‘serious’ entrepreneur (attracting investors then growing a business for sale) may find the MBA wonderfully useful.
It is here that I could quote the sheer number of successful entrepreneurs (Branson, Roddick, Sugar, Trump, Buffett) without MBAs, but that isn’t really the point. Being business-savvy and an entrepreneur is not the same as possessing an MBA. And an MBA doesn’t guarantee to make you business-savvy and entrepreneurial, but it might help.
Do MBAs help an entrepreneur?
• YES, an ambitious entrepreneur (looking to grow and harvest a business) may need MBA graduates to help deliver in the dream.
• YES, if you are an ambitious entrepreneur (looking to grow and harvest a business) who seeks more rigour and understanding then the MBA process will give you understanding and rigour and frameworks and networks and tools as you grow your business.
• NO, if you are an independent business-owner/technician who runs their own business because much of the programme will be irrelevant.
I am biased. I have an MBA. I loved being able to submerge myself in an in-depth and detailed analysis of what made businesses work. I loved the intellectual rigour. However, I also knew that what was intellectually fascinating may not directly help me grow my businesses. I had already received an MBA at the School of Life when I started my first business when I was 20. Nothing teaches you quicker than losing your own money!
My position is that the MBA is great for the person who feels they need to up their game, especially in the corporate world, although I do recommend going to the best possible business school. Go where the lecturer and professors write the books, not where they read and regurgitate them.
The great opportunity is as follows:
1) Most business schools are brilliant at what they do: research, teaching and training.
2) Most were created when the MBA was underpinned by a corporate world that wanted well-educated and well-qualified graduates for their management teams.
While universities, in general, have a reputation for being exam-focused and over-theoretical, some break the mould and create exciting programmes for the entrepreneurs and owner-managers (or for one or the other).
While the MBA not be right for you, do no write off the business schools!