Can MBA students become entrepreneurs?
Of course they can, however a good reality check is essential! This is why I did a workshop for them at GEM (Grenoble Business School) earlier this year. The key point being: realising that moving from a management job in a large company to the life of an entrepreneur is first and foremost a human transition.
So here are the slides showing the key points we discussed and that need to be taken into consideration when thinking about taking that leap.
In summary, MBA students who are thinking about becoming entrepreneurs need to clearly differentiate management (even at high level) from entrepreneurship on 3 levels:
Through the lack of hierarchical chain of command, the freedom they might be attracted to, also means isolation and lack of structured support, as they might have had with transversal functions, budget allocation, credibility of the brand in a large corporation. Although an entrepreneur is free to decide on what the vision is, how he’s going to get there and whom he’d like to work with, he feels the whole weight of responsibilities attached to the position: reporting to investors, ensuring the cashflow to pay his employees, following ethics and laws, etc.
Networked Freedom is a realistic way to envision a successful transition toward entrepreneurship: meaning that an MBA student would need to ensure he/she has the capacity to live without the safety net, make decision autonomously AND to create a strong support network (peers, experts, mentors, friends and family).
After years of being developed in large firms, managers become more and more competent in an area, whether it is a field, an industry, a role or a profession. It is the role of corporations to develop the employability of its employees. The experience and expertise gained give them a false sense of security: “now I know so much more that I can only but succeed at doing it for myself and starting my own company”. Entrepreneurship requires a much wider skill set and mindset. So from being sure of himself having developed mastery, the MBA student who wishes to move to entrepreneurship has to unlearn a lot of what he has learnt over the years and become a “Jack of all trade and Master of none”. This may have a strong impact on the ego with the impression of regressing and losing mastery.
Adaptable Mastery is required. Especially that with different stages of development of a start-up, the “doing-it-all on my own” experienced at the beginning will then shift to delegating and managing again. The capacity to unlearn, learn new ways, re-learn in new context old skills is essential to be successful.
Entrepreneurship offers the freedom to choose our own goals and objectives, to decide where we want to take our organisation, what we want to create in the world, what we want to change in markets, etc. Vision is essential as it drives your energy when making decisions and allows for a sustained effort when times are tough: when you don’t get results fast, when the market is not where you thought it was, when people do not support your idea, etc. This part of the entrepreneurial journey called “the dip” can demotivate anyone fast.
Purposeful courage is the resilience you need to persevere, to influence people, to find resources to continue on the journey. This may be lacking sometimes with MBA students who may have the will to start their own business, but do not have yet the idea that they strongly believe in and will push them to take risks and make the leap.
All in all, we encourage MBA students to team up so they can share the risks, share the competences and resources needed and support each other. Networking being key in not only being in touch with real entrepreneurs, meeting potential mentors and finding potential partners.
What could be the role of Business Schools?
Many business schools, they do not really encourage or support MBA students to start their own business, mainly for ranking reasons. Indeed, the rankings of business schools are partly based on the graduates’ salaries the first few years after getting their degree. So if we consider that entrepreneurs may not get any salary the first few years, we can understand that MBA students starting a business instead of getting an internal promotion, are not good for Management Schools and Universities’ business.
Saying that, some business schools do have entrepreneurship tracks or modules to help MBA’s consider that option, especially because doing an MBA may be part of a career reflection that may lead to the need to transform or change path completely, and the insights, new knowledge and network gained from doing the MBA may give executives the strength and courage to take the leap towards entrepreneurship.
But aside from the small scale support, theoretical knowledge, networking and in some very rare cases a real business incubator connected to markets, investors, experts etc, that MBA organisations can offer, it would be much more powerful to offer ways for blue chip companies to develop real intrapreneurship culture, so that all parties (MBA organisation, blue chip company and MBA student) could benefit from the experience.