Can You Teach Business Acumen and Entrepreneurial Skills?

I have an MBA from the Ivey School of Business, but I am of the view that there is a significant though subtle difference between technical (or perhaps a better word is functional) knowledge as well as the skills required for the administration of a business and the expertise required to develop, launch, and grow a business.

I was reminded of this distinction as I read an article in The Financial Post by Micheal Kelly, Dean of the School of Business at Laurier University. In the piece titled “If Only Geniuses could Run a Business” he observed that

One might be forgiven for thinking that Canadians are more interested in studying innovation than actually doing it.

Over the past several decades, we have been bombarded with studies from both government and non-governmental organizations on the importance of innovation to our productivity performance and how we need to improve our capabilities in this area. However, real progress on the innovation front over this period has been elusive and our productivity performance has actually worsened.

A decade ago, a parliamentary standing committee on industry, science and technology noted the Canadian innovation system at the turn of the 21st century was very much the same as it was at the end of the 1980s. Most would agree that little has changed in the past decade to change this observation.

…Yet, the studies are remiss in that they fail to acknowledge that one of the key factors in the lack of success among Canadian startups is a dearth of business acumen.

This last point raises, for me, an important question as to whether “business acumen” of the kind that results in innovation and entrepreneurship, as opposed to administering a business, is teachable or whether it is something best learned by doing. I raise this because later in the article he writes:

A number of studies have highlighted that technology startups in Canada suffer from deficient business and management skills particularly compared to U.S. companies. A 2009 report titled Understanding the Disappearance of Early-stage and Start-up R&D Performing Firms focused specifically on the high failure rate of startup and early-stage R&D firms in Canada and attributed this to a lack of commerce skills.

Similarly, studies have found that one of the most significant challenges facing innovative firms in this country was access to managerial, as opposed to technical, talent.

Moreover, a key objective of a successful innovation policy is the growth of Canada’s technology-based firms into global competitors. Indeed, our relative failure to do this is seen as a key factor in our poor R&D and productivity performance. Many of the previous reports on innovation state this as a policy objective but don’t seem to recognize the skills needed to make this happen.

Achieving this goal will require the availability of a broad range of management skills and knowledge. Companies will need access to talent that can establish, grow and manage international operations and all their related activities, including outsourcing, production, supply chains, alliances, currencies, etc.

Despite these needs, the Canadian education system continues to underperform in the production of business, as opposed to science and engineering, graduates. An OECD report said that Canada does well in producing advanced degrees in science and technology but not quite as well in the development of business and entrepreneurial skills.

I have no doubt, and have observed first-hand, the importance of the technical management skills he refers to — the management of outsourcing, supply chains, risk etc. But these activities presumes that someone at some point had the business leadership to actually develop and launch the business in the first place and it often seems that these qualities are not something that one generates by producing graduates with advanced degrees in business any more than one can learn about film-making without, at some point, actually taking camera in hand and making films.

Throughout my career I have recognized both my area of passion and competence — process improvement — but also those things I am not so strong at doing and have always held in the highest regard those individuals who may lack some technical aspects of management but have the imagination and risk-taking drive to conceive of and create businesses, albeit with the help of a team. But without those business leaders it never would have happened in the first place. Perhaps to create this business acumen we need not more classroom education but the opportunities for entrepreneurs to try (and perhaps fail) several times with start-ups in order to develop the wisdom and acumen that I think lies at the heart of business leaders (as opposed to business administrators or even Masters of Business Administration).

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