Can entrepreneurship be taught? Yes, if we refocus on entrepreneurial leadership.

In a recent special report in the Wall Street Journal, Noam Wasserman and Victor Hwang debate the age old question of “Can Entrepreneurship be Taught?”    Not surprisingly Hwang and Wasserman did not come to a definitive conclusions on the topic.  However, as I read their debate I saw an easy answer to their question.  The answer is entrepreneurial leadership.

Entrepreneurs are at their core entrepreneurial leaders.  They don’t just need to learn analysis to make “informed decisions” as Wasserman points out and they don’t just need to know how to act their way through the “messiness” and “uncertainty that comes with every aspect of entrepreneurial decision making” as Hwang suggests.   Entrepreneurial leaders need to do both.  They need to be cognitively ambidextrous so that they are able to act their way into unknowable situations and at the same time they need to have strong analytic skills so that they can learn from their actions and make informed next decisions.  By integrating these two distinct ways of thinking and acting, entrepreneurial leaders are engaging cognitive ambidexterity.   Furthermore, entrepreneurial leaders rely on “a deep understanding of people” as Hwang advocates as they take action that considers their networks, relationships, and the contexts in which they are operating.

In reshifting our focus to entrepreneurial leaders, we begin to also realize that it is only by integrating Wasserman and Hwang’s viewpoints that we can come to a comprehensive answer about how to teach entrepreneurial leaders.  In short we need a hybrid approach in which we integrate Wasserman’s ideas of teaching traditional analytics and risk management with Hwang’s perspective that we need to teach leaders to experiment and learn as they act their way into unknowable situations.  Yet, it is not enough to teach entrepreneurial leaders to be cognitively ambidextrou, they also need to learn how to take action based on a fundamentally different world view of business.  Entrepreneurial leaders need to learn how to tap into their passion and dreams to fuel their work and they need to know how to open doors and engage other people in their ideas.  Finally, as Hwang points out entrepreneurial leaders also need to consider the communities around them as they find ways to create value for themselves, their organizations, and the wider society.  If management educators were to focus on teaching students these three principles: 1. how to think and act in a cognitively ambidextrous way, 2. how to engage your passion and the people around you, and 3. how to consider social, environmental, and economic value creation, we would be able to say that yes we can teach entrepreneurship.

The question “Can entrepreneurship be taught?” was the wrong question to ask.  The question needs to be “What do entrepreneurs need to know?” and “How best can we teach them?”  By reorienting our management curriculum towards developing entrepreneurial leaders, I believe we can begin to come to an answer that incorporates the best of Wasserman and Hwang’s perspective.

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A Cup Of Rice Feeds Understanding Of Social Context

In January I  went with a large group of Babson students to Ghana. In the evenings, students meet with individuals who have concerns about their own businesses, most of which are located in a small kiosk, in the market, or on the side of the road. As always, the students find grappling with the everyday problems of poor Ghanaian business people an extreme challenge. One night a student came back from consulting and said to his friend, “It is just so hard;” and this was a student who will be working for a large multinational corporation after he graduates. But he is right, it is really hard.

My favorite story this year was the conversation with a local rice seller. She buys two bags of rice a week on credit for $100, as do two other women in her village. Everyone sells rice for $1 cup, and there are usually between 98 and 105 cups in a bag. She also thought there was enough demand in the village for 8 bags of rice every week, but neither she nor the other women could get any more rice. The woman wanted to know how she could make more money as she wanted to save enough to stop buying bags on credit (a bag is only $80 if one pays cash). For the students, the solution was obvious: if there is excess demand, she should raise her prices. The rice seller thought it was the craziest thing she had ever heard, insisting that simply no one would pay more than a $1 a cup as everyone knew rice was a $1 a cup; everyone in the room agreed.

Later I told this story to a friend who is an agricultural economist working in the developing world. When I asked her if she thought the rice seller was correct, she responded, “Absolutely,” and then proceeded to explain how we need to throw our understandings of supply and demand out the window in these cases as prices for many products in villages are socially determined; if you violate the norms on prices, you will be ostracized.

In The New Entrepreneurial Leader, Lisa DiCarlo and I tried to emphasize the necessity of understanding social context. Working with poor Ghanaians, Babson students come to quickly realize that some things they were taught as basic laws reflecting human nature are really social behaviors and perspectives that have been deeply ingrained in our society; in other societies, even basic economics looks very different. Only by understanding this can one think about truly radical innovation and change.

Stephen Deets, Associate Professor, Politics, Babson College; Chapter Author, The New Entrepreneurial Leader; What Is the Context?  Fostering Entrepreneurial Leaders’ Social Awareness Continue reading