Name lecture 2007 tab

Educating Educating Professional Entrepreneurs Professional Entrepreneurs

for the 21st Century: for the 21st Century: The Academy of Management, Management Education The Academy of Management, Management Education

Division Exchange Presentation for 2007Division Exchange Presentation for 2007

Thomas A. Bryant, Ph.D.Thomas A. Bryant, Ph.D.Rohrer Endowed Chair in Entrepreneurial StudiesRohrer Endowed Chair in Entrepreneurial Studies

Rowan University, USARowan University, USA

@ the Nippon Academy of Management Education, Takamatsu; 23 November

2007

23 November 200723 November 2007 Dr. Tom Bryant @ NAME ConferenceDr. Tom Bryant @ NAME Conference 22

AgendaAgenda

Define the standardsDefine the standards Identify the state of the artIdentify the state of the art Discuss the leading edges of the fieldDiscuss the leading edges of the field


Why Study Entrepreneurship?Why Study Entrepreneurship?

Social value of the economy:Social value of the economy: Goods and servicesGoods and services

Innovators create new goods and servicesInnovators create new goods and services Entrepreneurs test and prove their market Entrepreneurs test and prove their market

potentialpotential Big companies consolidate and distribute Big companies consolidate and distribute

efficiently (MANAGEMENT?)efficiently (MANAGEMENT?) Corporate innovation / entrepreneurshipCorporate innovation / entrepreneurship


Social Value 2Social Value 2

JobsJobs Meaningful workMeaningful work Wages => exchange value (cash to buy things)Wages => exchange value (cash to buy things)

Who creates the new jobs?Who creates the new jobs?


David Birch (MIT), 1979David Birch (MIT), 1979

US Economy: 16 million new jobsUS Economy: 16 million new jobs Fortune 1000 Companies:Fortune 1000 Companies:

No change in the number of jobsNo change in the number of jobs Government / public sectorGovernment / public sector

Minor growthMinor growth Small businessSmall business

Not much changeNot much change ““Gazelles” (3% of firms)Gazelles” (3% of firms)

Fast growing, job creators -- Led by entrepreneursFast growing, job creators -- Led by entrepreneurs


Edward Lowe Foundation, 2007Edward Lowe Foundation, 2007

Job creation effects, 2003-2006, Philadelphia MSAJob creation effects, 2003-2006, Philadelphia MSACategoryCategory StagesStages OwnershipOwnership Job CreationJob Creation % of Net New % of Net New

JobsJobs

Firms 1-9Firms 1-9 1: Startup1: Startup LocalLocal +105,000+105,000 +43%+43%

Firms 10-99Firms 10-99 2: Growth2: Growth LocalLocal +110,000+110,000 +45%+45%

Firms 100-999Firms 100-999 3 & 4: mid-sized3 & 4: mid-sized Local?Local? +10,000+10,000 +5%+5%

Non-profit / Non-profit / PublicPublic

Local?Local? +15,000+15,000 +7%+7%

GainsGains +236,000+236,000

Firms > 999Firms > 999 5: Consolidation5: Consolidation Not local?Not local? -210,000-210,000 -93%-93%

LossesLosses -210,000-210,000

CumulativeCumulative +26,000+26,000 +7%+7%


ENTR Ed vs. SBMENTR Ed vs. SBM

Small Business Management (=SBM)Small Business Management (=SBM) Older fieldOlder field Focused on excellence in non-growth firmsFocused on excellence in non-growth firms

EfficiencyEfficiency Entrepreneurship Education (= ENTR Ed)Entrepreneurship Education (= ENTR Ed)

Focused on Creating and guiding GROWTHFocused on Creating and guiding GROWTH CreativityCreativity New VenturesNew Ventures Innovation managementInnovation management


ENTR Ed in Business Schools: ENTR Ed in Business Schools: Standard: Same as Standard: Same as Accounting, Marketing, Accounting, Marketing, Finance, MIS, Engineering, or EducationFinance, MIS, Engineering, or Education

Competence in the Competence in the accepted knowledge and accepted knowledge and current practicescurrent practices

Ready to start work, Ready to start work, begin career, advance begin career, advance toward senior levels of toward senior levels of occupationoccupation

Undergraduates: Undergraduates: Ready to earn a decent Ready to earn a decent living as an entry-level living as an entry-level professional in the fieldprofessional in the field

MBAs: MBAs: Ready to earn a good Ready to earn a good living as an mid-level living as an mid-level professional in the fieldprofessional in the field


What Do Professional What Do Professional Entrepreneurs Do?Entrepreneurs Do?

MUST focus on successful practitionersMUST focus on successful practitioners NOT the average, or the poor performersNOT the average, or the poor performers Entrepreneurship defined by:Entrepreneurship defined by:

Creating new organizations (for-profit, and social)Creating new organizations (for-profit, and social) Growing at well-above-average ratesGrowing at well-above-average rates Recycling economic resources to higher value usesRecycling economic resources to higher value uses

Who are the model performers?Who are the model performers?


Professional EntrepreneursProfessional Entrepreneurs

Start new ventures -- Start new ventures -- and sell them for a and sell them for a profitprofit

Start new ventures -- Start new ventures -- and keep them growing and keep them growing for a full careerfor a full career

Take over static or Take over static or declining ventures and declining ventures and turn them back into turn them back into growth enginesgrowth engines

Add value at above-Add value at above-average ratesaverage rates

Create incremental Create incremental value (1+1>2)value (1+1>2)

InnovateInnovate Seize opportunitiesSeize opportunities Reject bad dealsReject bad deals Cut their losses earlyCut their losses early Accumulate wealthAccumulate wealth


Entrepreneurs Get PaidEntrepreneurs Get Paid

As managers -- salaryAs managers -- salary As entrepreneurs -- for growth in equityAs entrepreneurs -- for growth in equity As investors -- for returns on invested capitalAs investors -- for returns on invested capital

Daily -- in challenge and excitementDaily -- in challenge and excitement Monthly -- salary / owner’s drawMonthly -- salary / owner’s draw Exit -- change in equity valueExit -- change in equity value


Emergence of ENTR EdEmergence of ENTR Ed

A few courses on Small Business ManagementA few courses on Small Business Management David Birch, 1979: Gazelles create jobsDavid Birch, 1979: Gazelles create jobs Drive to uncover latent entrepreneursDrive to uncover latent entrepreneurs Public support for entrepreneurs and ENTR EdPublic support for entrepreneurs and ENTR Ed Focus on Start-upsFocus on Start-ups High value-added startups: Technology?High value-added startups: Technology? Corporate entrepreneurship: the growth layerCorporate entrepreneurship: the growth layer Family business: mix of growth and SB ManagementFamily business: mix of growth and SB Management Edward Lowe Foundation, 2007: “Second stage”Edward Lowe Foundation, 2007: “Second stage”


Can Entrepreneurship Be Can Entrepreneurship Be Taught? Learned?Taught? Learned?

Many ways!Many ways! Hard knocks (original)Hard knocks (original) Observation of practice / informal apprenticeship Observation of practice / informal apprenticeship

(old-fashioned)(old-fashioned) Research-based pedagogy (modern)Research-based pedagogy (modern) Fastest growing field in Academy of Management for Fastest growing field in Academy of Management for

nearly a decadenearly a decade Over 4000 member in ENT Division nowOver 4000 member in ENT Division now Over 50% of US colleges and universitiesOver 50% of US colleges and universities


Tracks within ENTR EdTracks within ENTR Ed

Lead Entrepreneurs (15%)Lead Entrepreneurs (15%) Entrepreneurial support providers (25%)Entrepreneurial support providers (25%) Family business inheritors (30%)Family business inheritors (30%) Corporate innovation managers (30%)Corporate innovation managers (30%) Small business experts (?)Small business experts (?)


The Domain: What Skills Do The Domain: What Skills Do ENTR Students Learn?ENTR Students Learn?

Opportunity generation /creativityOpportunity generation /creativity Feasibility assessmentFeasibility assessment Planning new venturesPlanning new ventures New venture implementationNew venture implementation GrowthGrowth Harvest / exitHarvest / exit


The Startup CoursesThe Startup Courses

Creativity (brainstorming, etc.)Creativity (brainstorming, etc.) Opportunity scanning and selectionOpportunity scanning and selection Feasibility analysesFeasibility analyses New Business PlansNew Business Plans


Corporate ENTR EdCorporate ENTR Ed

Managing growth (organic)Managing growth (organic) Deal-makingDeal-making

Mergers and acquisitionsMergers and acquisitions DivestituresDivestitures AbandonmentsAbandonments

Intellectual propertyIntellectual property ValuationValuation Innovation managementInnovation management

New ProductsNew Products


Managing GrowthManaging Growth

Only 1 of 14 ENTR courses at RowanOnly 1 of 14 ENTR courses at Rowan Edward Lowe Foundation data: 45% of USA Edward Lowe Foundation data: 45% of USA

net job creation occurs among firms with 10-net job creation occurs among firms with 10-99 employees, $1Million-$100Million99 employees, $1Million-$100Million

TAB’s Growth course at Rowan:TAB’s Growth course at Rowan: Buy a business ($100K - $250K, with leverage): Buy a business ($100K - $250K, with leverage):

What is worth buying? What is not?What is worth buying? What is not? Add value: grow it (by adding what?)Add value: grow it (by adding what?) Exit and harvest added valueExit and harvest added value


Specialty CoursesSpecialty Courses

FranchisingFranchising New venture financeNew venture finance Corporate innovation Corporate innovation

managementmanagement Excellence in Small Excellence in Small

Business ManagementBusiness Management Family BusinessFamily Business Technology Technology Social / not-for-profitSocial / not-for-profit

SectorsSectors Retail Retail Tourism Tourism Fashion Fashion Food Food Agriculture Agriculture ManufacturingManufacturing


Can ENTR Ed Fit into Business Ed?Can ENTR Ed Fit into Business Ed?

Karl Vesper (U Washington): No, need separate schools Karl Vesper (U Washington): No, need separate schools (Coleman keynote at USASBE ….)(Coleman keynote at USASBE ….)

Bruce (UND): $50 million School of ENTRBruce (UND): $50 million School of ENTR More than half of US schools now trying anywayMore than half of US schools now trying anyway Many international programsMany international programs Faculty converted fromFaculty converted from

Practitioners (personal evidence, learning, stories)Practitioners (personal evidence, learning, stories) Strategy, Marketing, Engineering, etc. (Textbooks, research evidence?)Strategy, Marketing, Engineering, etc. (Textbooks, research evidence?)

Emerging faculty with PhDs in ENTR: (Louisville, Boulder, Emerging faculty with PhDs in ENTR: (Louisville, Boulder, MIT, Indiana, UMKC, others)MIT, Indiana, UMKC, others) Does it make a difference?Does it make a difference?


Where Does ENTR Fit?Where Does ENTR Fit?

Creative destruction (Schumpeter, Branson)Creative destruction (Schumpeter, Branson) Innovation: creation and management (Tidd)Innovation: creation and management (Tidd) Insights into the bleeding edge of management Insights into the bleeding edge of management

(Ducker)(Ducker) Critical importance of dynamic orgs, Critical importance of dynamic orgs,

(Christensen)(Christensen) Intelligence (Romer) Intelligence (Romer)


Across functional disciplinesAcross functional disciplines

Accounting: Tax strategies; Cash flow Accounting: Tax strategies; Cash flow forecastsforecasts

Strategy: Creation, change, M&A, Strategy: Creation, change, M&A, Marketing: New product / New venture Marketing: New product / New venture

assessments, launchesassessments, launches Finance: Valuation, re-assignment of assets, Finance: Valuation, re-assignment of assets,

asset classesasset classes


Methods of Teaching / LearningMethods of Teaching / Learning

Lecture / studyLecture / study PracticePractice Theory & PracticeTheory & Practice Different Learning Styles (e.g., Learning Different Learning Styles (e.g., Learning

Concept Inventory; Tom Hawk paper)Concept Inventory; Tom Hawk paper) Learning MotivationsLearning Motivations


Motivations to LearnMotivations to Learn

Each student needs at least one thing that pulls Each student needs at least one thing that pulls him / her into the materialhim / her into the material

With that “velcro,” students then study the rest With that “velcro,” students then study the rest of the materialof the material

How do we learn?How do we learn? How many kinds of hooks?How many kinds of hooks?


Learning Velcro: Learning Velcro: Conceptual ThinkingConceptual Thinking

Written wordWritten word Spoken wordSpoken word Displayed word, e.g., Displayed word, e.g.,

PPTPPT CasesCases

SimulationsSimulations Practice realityPractice reality PicturesPictures VideoVideo MusicMusic


Story-Telling Experiences & Story-Telling Experiences & Empirically Based ResearchEmpirically Based Research

Story-tellingStory-telling Direct contactDirect contact Students enjoyStudents enjoy Like case methodLike case method Hard to extrapolate to Hard to extrapolate to

new situations, different new situations, different people. people.

Empirical literatureEmpirical literature Broad patternsBroad patterns ExtrapolateExtrapolate Not enough detail to Not enough detail to

determine valid determine valid exceptionsexceptions

May limit creativityMay limit creativity


Theory & PracticeTheory & Practice

CoursesCourses TextbooksTextbooks Structured learningStructured learning Best practicesBest practices Testable, in commonTestable, in common Relative expertiseRelative expertise Body of knowledgeBody of knowledge Modeled on successful Modeled on successful

practitioners practitioners

Experiential learningExperiential learning From expertsFrom experts From personal From personal

experienceexperience PBL = Project-Based PBL = Project-Based

LearningLearning Adapted to individualAdapted to individual Personal meaningPersonal meaning


Internships in Japan, AY2006Internships in Japan, AY2006

Kyodo NewsKyodo News, reported in , reported in The Daily YomiuriThe Daily Yomiuri: : 21 November, 2007, p. 2: Education, Science 21 November, 2007, p. 2: Education, Science and Technology Ministry (Japan)and Technology Ministry (Japan)

50,430 internships from 482 Japanese 50,430 internships from 482 Japanese universities in AY 2006universities in AY 2006

66% of universities, up 35% over AY 200566% of universities, up 35% over AY 2005 8,000 more internships than AY 20058,000 more internships than AY 2005


Experiential Learning in ENTRExperiential Learning in ENTR

Internships: Projects within the ENTR Center Internships: Projects within the ENTR Center (freshmen?)(freshmen?)

Apprenticeships: Assistant to the EntrepreneurApprenticeships: Assistant to the Entrepreneur Junior Partners: Sweat equity, with Senior PartnerJunior Partners: Sweat equity, with Senior Partner EmployeeEmployee ManagerManager PartnerPartner Owner: Select, plan, launch, operate, exitOwner: Select, plan, launch, operate, exit


On-Campus Ventures: 30-60?On-Campus Ventures: 30-60?

What campus-related ventures could ENTR students What campus-related ventures could ENTR students own and operate?own and operate?

Brain-storming session: 3-4 >> 30-65!!Brain-storming session: 3-4 >> 30-65!! Freshmen: work in severalFreshmen: work in several Sophomores: buy inSophomores: buy in Juniors: manageJuniors: manage Seniors: own and exitSeniors: own and exit Putting them through college by virtue of ENTR Putting them through college by virtue of ENTR

experience: Will parents buy in? experience: Will parents buy in?


Impacts of University ENTR Impacts of University ENTR ProgramsPrograms

Presence on campus: attitudes, legends, storiesPresence on campus: attitudes, legends, stories May affect learning models, expected outcomesMay affect learning models, expected outcomes

Indirect: friend, colleagueIndirect: friend, colleague Once over lightly: one workshop or course: Once over lightly: one workshop or course:

creating potential for lifelong learningcreating potential for lifelong learning Minors and Certificates: skills, attitudesMinors and Certificates: skills, attitudes Majors, Specialists: careers, professionalsMajors, Specialists: careers, professionals


ConclusionsConclusions

Still a very young field: much left to learnStill a very young field: much left to learn Vitally important domain: creating value, and Vitally important domain: creating value, and

managing its growth.managing its growth. Focus on core outcomes: successful venture Focus on core outcomes: successful venture

development, value-added, change development, value-added, change managementmanagement

Professional standards: best practices, Professional standards: best practices, measurable outcomes, transferable knowledge.measurable outcomes, transferable knowledge.

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