What educators get wrong about entrepreneurship

(Originally published at elimindset.com, April 7, 2015)

In today’s education landscape, entrepreneurship is picking up steam. Recent articles have emphasized the need to have more entrepreneurs in society, have encouraged educators to work to help students unleash their entrepreneurial talents, and have speculated whether schools can help students think entrepreneurially. Yet something seems unclear.

What do educators mean by entrepreneurship and entrepreneurial thinking? Do they mean starting and running a business? Or do they mean something else entirely? And what are the implications for such an understanding?

Unfortunately, for students and for society, educators seem to be interpreting entrepreneurship as business management, as evidenced by high school curricula that highlights profit and loss and emphasizes writing business plans. Educators’ misunderstanding of entrepreneurship is likely to lead them to select lessons that enable students to develop the wrong skills. By wrong, I mean, skills that may help students manage businesses, but not entrepreneurial skills — not skills that enable searching for opportunities, generating ideas, and manifesting solutions.

What this means for education

If we are serious about helping young people develop an entrepreneurial mindset, then we need to be clear about what we’re advocating.

If, by entrepreneurship, we actually mean business management, then we will be misguided when we work to establish the classrooms and assignments necessary to yield the types of entrepreneurial students we seek. Helping students to write business plans and to start faux businesses isn’t likely to yield dynamic, capable students who think entrepreneurially. It may help them have a better sense of what business management is like, but it fails to engage them in the entrepreneurial process.

However, if, by entrepreneurship, we actually mean entrepreneurship (i.e., identifying problems, experimenting with ideas, and validating solutions), then we have a better chance of aligning experiences, activities, and lessons with what students need to develop entrepreneurial mindsets. Enabling students to engage and experience the entrepreneurial process is much more likely to help students develop the dispositions and abilities needed to be entrepreneurial throughout their lives.

But who says business management isn’t entrepreneurship? Who says business management skills differ from entrepreneurial skills?

Entrepreneurship is NOT management

In 1973, Dr. George Land published “Grow or Die: The Unifying Principle of Transformation,” in which he put forth Transformation Theory, describing the structure of change in natural systems. According to Land, all natural systems go through three phases.

In Phase I (Invention), the young system is striving to find its place in the world, its niche, its system–environment connection. This phase is characterized by creativity, exploration, and experimentation.

Once the system establishes a connection — what Land referred to as the first breakpoint — it’s ready to grow.

In Phase II (Improvement), the system works to expand and scale. This phase is characterized by replication, efficiency, and management.

Over time, as the environment changes, the system can no longer keep doing what it’s been doing, and it reaches the second breakpoint.

At this juncture, the system must work to reinvent itself or else it will die in Phase III (Obsolescence) — think Kodak.

Different phases, different skills

The first two phases of Transformation Theory delineate important differences between entrepreneurial skills and business management skills — what Harvard University’s Clayton Christensen refers to as “discovery skills” and “delivery skills,” respectively.

Phase I aligns well with entrepreneurship. It relies heavily on interaction, observation, experimentation, and adaptation. It’s about identifying opportunities, evaluating ideas, and validating solutions.

Phase II aligns well with business management. It emphasizes processes, procedures, mechanization, and oversight. It’s about efficiency, standardization, and scale.

These phases are not the same. There are different rules of survival in Phase I and Phase II. They require different dispositions and abilities to thrive. And engagement in these phases cultivates different skills.

By conflating entrepreneurial skills and business management skills, educators are not only focusing on the wrong skills, but also they are failing to engage students in the entrepreneurial process — the very process that fosters the skills educators seek and students need, to live successful, fulfilling lives, regardless of their chosen path. Not everyone wants or needs to be Mark Zuckerberg of Facebook or Sara Blakely of Spanx (i.e., creators, founders, high-growth entrepreneurs). But everyone can benefit from developing an entrepreneurial mindset.

Conclusion

Yong Zhao, a professor at the University of Oregon’s College of Education, has stated that the development of an entrepreneurial mindset is important for all students, not only for those who want to start businesses. And the skills developed through the entrepreneurial process are necessary for success in the 21st Century, according to Tony Wagner, Expert in Residence at Harvard University’s Innovation Lab. Thus, the increased incorporation of entrepreneurship into the education space holds promise, but let’s be clear.

Entrepreneurship is not business management. Entrepreneurship is observation, exploration, and search. It’s solving problems for other people. It’s the transformation of a potential idea into an actualized reality.

Business management isn’t that. Business management is sustainability, efficiency, and replication. Business management is formulas and procedures.

All of the dialogue and energy surrounding education and entrepreneurship is encouraging. For students and for society, however, let’s just make sure we know what we’re talking about.

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