The Hindu Business Line : The relevance of entrepreneurship

Larry C. Farrell, an expert on entrepreneurship, feels India, which is targeting large-scale job creation to alleviate poverty, should focus more on entrepreneurship than on managerial training.

While acknowledging the value of managerial skills, Farrell, himself a Harvard School graduate, says India should ‘avoid’ the MBA syndrome that has dogged the US, resulting in the loss of 30 million jobs that have been outsourced and downs ized in the last 30 years.

“Despite the recession or, perhaps, because of it, we continue to find strong global interest in entrepreneur development,” Farrell says.

Chairman of the Farrell Company, a firm engaged in research and teaching entrepreneurial practices to big corporations and Government departments, he says as job creation is the key contribution of entrepreneurship, education has a crucial role to play in promoting entrepreneurial talent.

It was equally important that entrepreneurs focused on developing products and services that the world needs, he says in a chat with The New Manager in Bangalore.

According to him, though traditionally, entrepreneurship has played a dominant role in a company’s start-up and growth stages, the original entrepreneur retires as the company grows bigger in size. Entrepreneurs never replace themselves with entrepreneurs; they replace themselves with professional managers or MBAs.

The entrepreneurial spirit, which got the company going in the first place — and created all the growth — starts waning, leading to growing bureaucracy and corporations, which generally mark the beginning of the decline or survival phase of the company, he says.

“The management rules — and the fads — that we learn in business schools come from studying big companies, most of which are already past their prime and in decline. Even so, those ideas get locked in as the way to manage any business.

“But you cannot run a big company with just a kind of crazy entrepreneurial passion. You also need to have managers, people who can keep things disciplined,” he says.

However, the important question for companies today was not “how to manage the business” but rather “how to grow the business.” And this is the job of the entrepreneur.

Entrepreneurship, Farrell says, is one of the most generic concepts in the world and nurtured in the right environment, its genius cannot be limited.

There may be differences in terms of how people perceive it as a career but once they get into it, all entrepreneurs basically have to do the same thing to succeed.

Answering a question on the changing dynamics of corporate management, Farrell agrees with the view that business schools in India should re-orient their curriculum to stress on entrepreneurship while keeping the focus on imparting training in managerial skills.

Thirty years ago, there was not a single class on the subject of small business. Today there is a co-curriculum in entrepreneurship.

“But there is a big problem. These are still the same teachers, teaching with a heavy tinge of marketing. My preference will be that an entrepreneurship centre should be set up in a business school, or a separate one next to it. An entrepreneurial student should have also gone to an engineering school to pick up a technical skill to become an entrepreneur,” he says.