Do you need an MBA to become an entrepreneur?

“Why do you want to do an MBA?”
“I want to be an entrepreneur.”
“Do you need an MBA to become an entrepreneur?”

Even though I answered “Yes” with out any logical thinking, this question of my Professor Anirban Ghatak kept me thinking for the entire two years in MBA. Do you need an MBA to become an entrepreneur?

Source: http://www.vctec.ac

MBA – Masters in Business Administration – is different from entrepreneurship. To be specific, MBA is a subset of entrepreneurship. Entrepreneurship is more than that of MBA. The roles of a manager and an entrepreneur are not comparable. The approaches to the same problem by an MBA graduate and an entrepreneur are also different. The way they think(intuitive/ systematic), the decisions they make, idea generation methodologies, their dealing or presentation with other people, the risk taking abilities, and even their appearances and mannerisms are different.

An MBA graduate, usually, focus on one particular specialisation and even into micro specialisations. But an entrepreneur is a jack of all, and sometimes may be a master in one subject. There is no need of an MBA to start a business, but to proceed further, may be after a year, one needs some knowledge about managing the business. An entrepreneur can avoid this step by appointing a manager in the firm to take care of business. But would you prefer another person to run the business to you? Three things matter here.

Effectiveness: The entrepreneur has better information and knowledge regarding the business because he/she is the one who conceives the idea. And hence he/she can manage the business effectively and efficiently.

Trustworthiness: Since the entrepreneur knows the business inside out, it is better to take the position as a manager than appointing another person.

Money: You need to pay the manager a hefty amount if one is appointed.

An MBA is good when you need to understand more financial/marketing/HR concepts, otherwise there may be a chance that your own employees fool you and take advantage of your ignorance.

The critical factor: Idea
The critical factor that decides whether you need to do an MBA to become an entrepreneur or not is “idea”. If you have a very good ‘innovative idea’, do not waste your time in doing a two year MBA course. Start it right away. Get the help from a professional to make a business plan and present your idea before venture capitalists. They will take care of the funding part. But be cautious that the professional who is helping you to prepare the business plan should not steal your idea. (It is better to prepare a business plan by yourself or patent your idea).

But what if you do not have an innovative idea? An existing business or a successful idea copied from another country is prone to more competition. You need to know how to develop your business and here comes the importance of MBA. It depends on a number of external factors like economy, politics, technology etc. If you do not want to waste your time and have good financial backing, go ahead and hire a manager.

Decisions and risk-taking ability

An entrepreneur thinks both intuitively and logically more or less the same. But intuition plays a less role in the decision taking ability of a manager. Business schools will teach you to think in a systematic way just like solving a case study. But no one in business schools will teach you how to think intuitively. It is qualitative and is difficult to convey. One need to practice it. Keep in mind that intuition plays a major role in decision taking.

Entrepreneurs are more risk taking than managers. An entrepreneur identifies an opportunity and grabs it. He/she takes the risk and acts accordingly. But a manager is more into traditional way of thinking and hesitates to take the risk. Even if a manager do not take a risk and the business goes smoothly, he is not in a dangerous position. But if he takes risk and the business flops out of the risk, his may get a pink slip. This thought hesitates the managers to take risk. Always keep in mind that the risk should be a calculated one.

Learning: an on-going process
Whether you have an MBA or not, whether you plan to take an MBA or not, whether you are a manager or an entrepreneur, to run a busiess, it is essential that you need to learn continously. It is an on-going process.

Keep on updating your knowledge. Identify the opportunities, anaylse them – its advantages and drawbacks. If it is viable, take the risk and invest in it. Reap the benefit as soon as possible.

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Human Resource management role and importance of values ethical, moral, philosophical, spiritual and scientific

Excerpts from the presentation of Prof. N.S.Ramaswamy at International Conference on ‘Innovation and Strategies‘, Christ University, Bengaluru.

(Prof. N.S.Ramaswamy: Former Director of IIM-B. Padma Bhushan, National Professor in Management, Director, CARTMAN.)

In every human endeavour in every sector and in every field of activity, there is a Management component as an integral part of the activity-though, words, deed, actions, transactions, policies, decisions and relationships. A Management function had existed from the dawn of civilization. But it has been made a subject for studies and practice only during last 100 years, ad that too, in business and industrial sectors during the Industrial Era which developed under the capitalist system.

It is the Management function which determines, or discriminates between what is good and bad for the doer and his/her family, society, community, religion, nation, mankind, animal species and planet. It is lack of ethical and moral component that is afflicting the three entities in the planet, consisting of mankind, animals, and Nature’s endowments. At present, Management, as taught in Business Schools and practiced in every area of activity, is governed by social science disciplines, such as Politics, Economics, Sociology, Psychology, Logic, Law, Productivity Techniques, Mathematics, Statistics, Information Technology, Accounting etc. These disciplines do not have a discriminating or humanistic component. Therefore, in order to make Management Science to become an instrument for the welfare of Man, Animal and Nature, it is essential to introduce ethical, moral, philosophical and spiritual values, such as honesty, truth, integrity, non-violence, selflessness, service consciousness, compassion towards animals, respect for Nature, sympathy, empathy, courtesy, politeness, forgiveness, concern for others, culture, aesthetics, art, yoga, meditation, fasting, silence, prayer, surrender to the divine, equanimity, balance,serenity, calmness, quietitude, fairness, justice, etc. Further, Management function should avoid, abjure, eliminate or suppress anger, arrogance,egoism, avarice, jealousy, envy, hatred, prejudice, lust, passion, vindictiveness, boastfulness, cynicism, negative tendencies and instincts which are lying dormant in Man.

Typically, fostering positive virtues and suppressing negative tendencies are part of and are largely common for all religions. Unfortunately, secular education and transactions in public life kept religion away. Therefore, fostering desirable qualities and avoiding negative tendencies ought to be taken over by Management function inherent in every human activity.

This is the only way by which plunder and pillage of Mother Earth, desertification global warming, extinction of forest, cruelty to animals, exploitation of consumers, fraud, scams, criminality, violence, sensuous behavior, break up families, terrorism, inter-religious and international conflicts and confrontation etc. can be avoided. This means that Management Science has to adopt these noble and worthy ideals and virtues into the Education System and practies in organisations in all kinds. The philosophical concept of Hinduism, incorporating theory of karma and reincarnation, law of cause and effect etc. are additional inputs, which would preempt deviant behaviour among mankind. Good begets good and bad results in failure and sorrow in this birth or in subsequent births. The Theology part of all religions, that is concept of God and His relationship with man, theory of creation, heaven and hell, punishment and reward by God etc. can be left out of the new version of Management proposed here. A reorientation of Management in Government, Business, Education and all human endeavours would be the strategy and innovation for materialistic progress, peace and harmony, elimination of conflicts, suppression of violence and passions, elimination of hatred, etc.

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Response to ‘Problem Solving, Creativity, Brains, & Co-coaching’

This blog is a response to Mr. Graham’s blog on ‘Problem Solving, Creativity, Brains, & Co-coaching’:

http://catchthevision.wordpress.com/2008/05/08/problem-solvingcreativity-brains-and-co-coaching

The four stages mentioned in the blog is a systematic approach converting intuition into a rational thought and it is true in all the cases. But people will not realise this as they are overwhelmed with the solution.

The incubation stage is very important in those areas where the usage of creativity is essential, like ad agencies. The work culture in some MNCs underlines this fact, where creative flow happens only when the work environment supports the incubation stage.

What I felt about co-coaching is nothing but ‘Synergy’. But it will be utilized to the maximum only when the persons coming together for co-coaching are complementory in nature. There should be some understanding between the co-coaching people. That does not mean they should be like-minded personalities. Like-minded persons will give a small portion of the overall result. But persons who are complementory in nature helps in team winning- where one person lacks, the other one strengthens and vice versa.

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Necessity is the mother of ‘innovation’

You may feel that innovation happens, most of the time, by-chance. But that is not true. Ideas may come to your mind with out much effort; may be based on a trigger. Ideas take its own time to evolve into innovations. The transformation of idea into an innovation is the most complex and difficult stage. The passion that drives the idea to an innovation is ‘necessity’.

Most of the innovations that happened in this world are due to necessity. An urge of doing something; if not may even pose challenges to life, leads to innovation. Necessity does not mean necessity to all, but to a certain group. And in marketing, we call this group as Target Group. Marketing is all about creating the need and satisfying those needs. Thus satisfying the necessity of a small group can fetch you a few billion dollars.

There is a hidden obstacle in innovation – most of the ideas which may lead to innovations, will be viewed as dumb ideas. There will not be much value for ‘those’ dumb ideas unless there is a necessity for it.

On the way to innovation, there are mainly two ‘herculian’ tasks.

1. Identify the necessities of people and

2. Implement the solution for those identified necessities.

Once these are done, you do not have to look back.

So “identify a need from the people, make it a necessity for all and satisfy that necessity”. This is the golden rule for marketing.

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Intuition is essential for innovation

Big ideas which do not seem logical are the basis for innovation. These ideas will come all of a sudden on a leisure time. But once striken by such an idea, it will poke you almost all the time. This will eventually creates some connection with the existing information you already had in your brain and tries to make the illogical, a logical one. And this is how intuition develops into something rational which leads to innovation.

Innovation needs intuition and intuition needs information for its basic existence. To be precise, there will not be any intuition unless the person has some prior related information in the field. It is this information that really helps to make the intuition to be connected rationally. That means ‘past’ is the foundation for intuition.

If something comes to your mind which is not existing or which has no relationship with existing things, then you cannot call it as intuition completely. It is a dream. Intuition is a subset of dream. Intuition is a dream which you may think that there may be some relationship with your existing information; but cannot really make it.

Develop the intuitive behaviour in you. Think on it. Live on it. Make a cognitive relationship with the information you have. It will lead to innovation.

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Not Innovating = Destruction

It is sure that any form of innovation can take your company to a higher level. It may bring the market leadership to your company. But it is equally important to do sustain innovation. Innovation once done and then cling to that, will not result in milking the cow in future. Instead it destroys what you have innovated.

A market leader has enough fund to spend on innovation. It continues to be the market leader (using established technology), with the additional cost incurred in innovation. But after some time, it will reach a point where further investment will not bring any difference. This is because the existing market leader may think that their opponents are not in a position to challenge them. Also there is limitation in the technology it is using. It cannot afford the new technologies as time and investment progresses. But the reality is start-ups(new rival) can challenge the market leader (‘The S-Curve: An established technology and new rival’, Managing Creativity and Innovation, HBR). Start-ups do not have anything to lose. And they will always invest new technologies. Here the challenges are they will start a little bit late and have to invest more in new technologies. The other side of these challenges are advantages. Starting late in an innovation project enable them to use the latest technology. Also using latest technology will leverage their innovation and business. That means even if you are innovating, but with existing technology will face competition from new rivals who are using latest technology. Then think of what will happen if you are not innovating at all!

A best example for an established company which innovates all the time is Apple. As a result, they were able to come up with different innovative products like iPod, iPhone etc. But coming to cell phone market, Motorola could come up with MotoRazer, MotoYuva etc. Even then they are not able to keep innovation as that of their competitors and hence are forced to move down in the sales of cell phones. A great vision is always required for innovation. If you failed in having a greater vision at any time, will result in lack of innovation. This eventually falls your revenue. To sum up, not innovating over a period of time is harmful for the organisation.

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