The American Master’s Degree in Business Administration is considered the premiere degree worldwide for people who want to understand and run businesses. Yet we know students sometimes graduate without a clue about how business really works. This is true of even the best of students from the finest Universities, as witnessed by the well-educated executives who “managed” Enron into oblivion and themselves into prison. Somehow these individuals, with all their getting, did not “get” how business works and how success is achieved.
Next week I again start my in-person course in entrepreneurial thinking called “The Art of Enterprise” just south of downtown Austin. See the deep discount offers on the course and on individual classes at the end of this newsletter. Over 200 women and men have graduated from my courses. They range in age from 17 to 70 and include everyone from entrepreneurial wannabes to successful business people, from film-makers to a rabbi. Some have since then started successful businesses, and some already had success when they took the course.
My alumni tell me about the impact of the course on their lives and brains years afterwards. One veteran investment advisor who had been successfully picking stocks for decades told me, “I look at almost everything I see differently, since I took your course.” Others say not a day goes by without using what they learned in the class. One 17 year old wrote me after a talk that it was, “One of the most eye-opening and illuminating experiences in all my life.”
All this has led me to puzzle over what it is I teach that seems to bring the most value to my students. I have long known that I introduce people to things they might not otherwise discover, be it business history or the future of Mexico. But exactly what separates my teachings from what one often hears in a business or entrepreneurship course, or in school in general?
I believe there are at least 9 main things, which might be grouped under three headings: “contextual awareness,” and “tools for learning,” and “passion and purpose.”
Everything I write here is premised on the belief that success is above all else rooted in self-confidence (or self-efficacy) which in turn flows from knowledge, understanding, and your own confidence in your ability to learn and grow over time. As Henry Ford said, “Whether you believe you can do a thing or not, you are right.”
Contextual awareness
After spending a great deal of time with business school students around the US and the world, especially in my role as Entrepreneur-in-Residence, I came to the conclusion that, “We are creating carpenters and plumbers when we need architects and system planners.” Universities and many professors have become so narrow in their interests and research that they sometimes seem to know more and more about less and less. Focusing on memorization and mechanical techniques, business students may learn topics like marketing, accounting, finance, supply chain management, and information systems. But few teachers knit it all together. Two of the most common comments from my students are “You connected the dots” and “You pulled away the curtain of mystery.”
In the tradition of Peter Drucker, business and enterprise are best viewed as part of a big picture which reflects the human nature of enterprise, connected to all of society and culture. Geography, demography, sociology, psychology, and economics are as important as advertising techniques and being facile with spreadsheets.
The entrepreneurial thinker, whether in government, non-profits, or for-profit companies, gains a significant advantage over his or her peers by understanding how it all fits together.
Here are the three primary dimensions I focus on:
1.Time. Relatively little education focuses on the dynamic (ever-changing) nature of society and therefore enterprise. Too often business is viewed as a static, defined and boundaried world, which it is not. Knowing how things change through time, how evolution takes place in every aspect of life, and developing keen trend observation and recognition skills are huge advantages over the average business person or dreamer.
At the same time, most of what is important in business is timeless. Yet most business people have no clue about why their industry was created, when, and by whom. You cannot know where you are going if you do not know where you are coming from. For this reason, my lessons are saturated with examples from throughout business history.
2.Space. Understanding where you and your ideas fit into an ever more globalized world is critical. The press focuses on India and China, but how much do you know about the people and economy right down the road, in that town you never visit? If you are a Texan, do you really understand the challenges and opportunities of being near Mexico? Do you understand which parts of the US are growing and which are not, and why?
3.The economy. Many of the business people and especially younger people I deal with do not even know what industry they are really in, why it exists, how big it is, or how fast it is growing. Buzzwords have replaced clarity in much of our thinking. Bloggers may think there is a “social media industry,” but only economists take the time to define and enumerate industries, and to understand how they fit together. Many business people are only familiar with one or two industries, despite the fact many breakthrough ideas are sparked by looking at other industries.
I studied under 4 professors at the University of Chicago who later won Nobel prizes in economics. I have long been surprised at how little business people know about economics, especially micro-economics, and how little economists know about business. It takes an awareness of both to understand how they really weave together.
Many speakers and teachers in the business world have limited experience. They only know social media, only know Silicon Valley, or only know what’s gone on in the last 30 years. Those can be extremely valuable perspectives, but looking at business and social entrepreneurship around the globe, through the centuries, in every industry adds an entirely new perspective.
I began my lifelong attempt to understand the world around me at an early age. When the new Fortune Magazine list of the 500 largest US companies came out last week, it was the 53rd year I have studied it, starting at age 12. I now live in a personal reference library of about 56,000 books. My desire to understand every industry, including non-profits, led my friends and I to found what later became Hoover’s business information service 25 years ago.
I have travelled to 44 countries and spoken with the folks there and observed their lives. Yet I have just begun my journey, and each good day is an adventure in discovery.
This broad contextual, integrated understanding forms the foundation of any further thinking about purpose, strategy, and tactics. If one really understands where they are “at” – in time, on the map, and within the economy – then they have a much better shot at success.
This holistic foundation also gives a structure, a framework to all the information that floods our way. Most readers of the business and general press have little clue as to how to:
- Sort out what is important and what is not.
- Know what is a real trend and what is a fad.
- Discern what is golden and what is fool’s gold.
- Determine which of our ideas is good, which is bad, and how to sort through them and pick one.
Those who see and grasp the big picture have a much easier job of ignoring some headlines, no matter how blaring, and studying other stories in depth, no matter that they are on the back page. From this understanding we draw confidence in our own conclusions, judgments, and decisions.
Tools for learning
My book, course, and classes are full of ideas and tools for “how to learn” and how to learn efficiently. This relates to “how to think independently,” a core skill of any entrepreneur in any field. How to see all the important stuff that most people never see, even when it’s right in front of them. Four of the most important tools are:
4.Pattern Recognition. Life is a continuous lesson in pattern recognition. Yet you cannot see most of the patterns if you only know one industry, one time period, or one place. Our classes are always seeking patterns, no matter the source or story.
5.Observational Learning. When I visit a new country, the first thing I do is visit a supermarket and a discount store, because this is where I will learn the most about the society in the least amount of time. Most schools do not take all the students out in the field to prove how much you can learn just by watching, by using your very powerful eyes and ears. Too many people, especially the young, are so caught up in our world of cool gadgets that they can become disconnected from the greatest source of knowledge and inspiration: the world we live in every day.
6.Comfort with the numbers. While the typical MBA has great spreadsheet skills, sometimes they do not really understand where the numbers come from or what they mean. Others without such rigorous education can be paralyzed at the sight of a spreadsheet. Yet no enterprise can be conceived or built without a keen grasp of and affection for, of all things, financial statements.
If related to real people, real transactions, and real experience, the core ideas are in fact simple and can be explained in under three hours, as we do in one class session. 15 year olds can learn this stuff in the hands of the right teacher. The standard 15-week accounting course for non-accountants just adds confusion and industry-specific details better learned on the job for most people.
7.Research. How to figure things out for yourself. Success is not about knowing “everything” so much as it is about knowing where to find what you need to know. Most newly-minted MBAs I have met don’t have much clue about how to research. One of the sessions in my course, “How to become an expert in any company or industry” teaches the most important ideas in one session.
Once people learn how to use these tools, their confidence in their ability to figure things out for themselves can increase dramatically. Research skills enhance your ability to come up with, sort out, and select your best possible ideas, something only you can do.
Purpose and Passion
8.Purpose.
9.Passion.
By the second decade of the 20th century, Henry Ford dominated the global automobile business. The board of secondary competitor General Motors placed the chief of a ball bearings company, Alfred Sloan in charge of the business. Step by step, Sloan and his colleagues designed the world’s greatest and most profitable company of its era. For over 40 years, GM focused on making great cars that people loved. Then, gradually, people who thought like accounting machines took over “leadership” of the company. The goal became maximizing quarterly profits. The passion went out of the business. For its 100th birthday, General Motors went bankrupt, wiping out a century of astounding results.
Most business classes and textbooks are so lacking in humanity and so focused on mechanical skills that we forget why we are doing all this in the first place. Purpose inspires your organization and serves your customers.
Great enterprises, whether for profit or not, succeed because the people of that enterprise believe in a clearly stated purpose, they are committed and work hard to achieve it, and they are passionate about it. Passion without purpose is pointless. The two are inseparable.
Passion more than anything else is missing from many classrooms. In educators’ efforts to be balanced, rational, and unbiased, we have tended to take the love out of our enterprises. Few teachers celebrate the great joy that comes from successful enterprise. Few books and movies celebrate what Southwest Airlines, UPS, or Johnson & Johnson has done for the world.
And yet, without passionate people pursuing their purpose we would all still be living in caves and dying at age 25.
Anyone who hears the stories of General Motors – or BOOKSTOP or Whole Foods Market – cannot help but be moved and cannot help but better understand how a small group of people can change the world for the better, which is what entrepreneurship is all about.
While setting everything I teach in these broad contexts and applying these tools, we talk plenty about such daily realities of competition, fund raising, board structure, options and sharing the wealth, and many other very practical issues. Above all else, the importance of serving others.
To read more of my business philosophies, here is a more extensive blogpost I wrote on business education and what we all really need to learn in order to achieve our goals.
Join me in this course at these special prices for early registration
I have reduced the price of tuition to my summer 2015 course to $499 for the full 8 3-hour sessions if you register by Tuesday, June 30. I have also reduced the price of individual classes from $199 to $129 if you register by Tuesday, June 30. Registration is required, and is easy to do here.
The Eventbrite site also contains a complete description of each class and additional testimonials from my students, and other teachers and business leaders. Reach out to me at garyhoov@msn.com if you have any questions.
I would love to hear your thoughts on these ideas; please post your comments here on LinkedIn.
Gary hoover
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