Professor Nelson Phillips
In his classic article ‘What Leaders Really Do’, John P. Kotter argued that the activities of leaders can be divided into leadership — motivating people and managing change; and management — dealing with and managing complexity in organisations. Too many individuals in leadership positions in organisations, his argument goes, are skilled at managing complexity when what the business world really needs is more leaders!
Good business schools have responded to this critique (and many others like it) by adding leadership courses and leadership development opportunities in order to produce the sort of ambidextrous individuals that could both inspire people and manage organisations effectively. While there is still work to do, I believe that good MBA programmes now do a great job of balancing leadership and management and produce graduates adept at both aspects of running a business.
But now, there is a new challenge: in addition to leading and managing, we need leaders who are entrepreneurial! This requires MBA programmes that can integrate leading and managing and combine them with the ability to see opportunities and take risks. It is also critically important whether a prospective MBA student would like to start their own business, work in an SME, or work in a large company or even the government.
Beginning with new ventures, we all know the challenging statistics. Yet, I would argue that the most common reasons for failure lies not in a lack of entrepreneurial drive or ability, but with a lack of management skills or the incorrect application of the principles of entrepreneurship. Attending the right MBA programme provides budding entrepreneurs with the opportunity to learn advanced management skills in finance, accounting, marketing and other critical areas that are all too often the source of failure for new businesses. In addition, a good MBA programme can provide access to networks of other entrepreneurs, to financing, and to advice on how to avoid common and costly mistakes.
But the usefulness of a good MBA does not end once a business is founded. I have been involved in a collaboration between the London Stock Exchange and Imperial College Business School to help small businesses scale up for several years and success in scaling lies in exactly the same combination of leadership, management and entrepreneurship. Many of the businesses I have worked with face challenges around managing rapid growth or accessing additional finance and the knowledge of management and entrepreneurship that comes with an MBA are an important and necessary part of scaling a business.
Finally, and perhaps somewhat ironically, the need to be entrepreneurial is actually greatest in the largest organisations! Entrepreneurship is not just about starting small businesses, it is about creating a new area of activity and that often happens inside of a large organisation. In fact, many innovations are better exploited in large organisations who have the necessary complementary assets (for example, marketing expertise or distribution channels) and successfully creating a new business takes exactly that same combination of leadership skills, management expertise and entrepreneurial thinking inside an existing company or government department as it does in a new venture.
It is not surprising, therefore, that large organisations are looking for MBA graduates adept at entrepreneurial thinking and entrepreneurship, therefore, needs to be at the heart of an MBA for success in large, existing organisations also.
Professor Nelson Phillips holds the Abu Dhabi Chamber Chair in Innovation and Strategy and has published more than 100 academic articles and book chapters including articles in the Academy of Management Journal and Sloan Management Review.
Professor Phillips teaches courses in strategy, organisation behaviour, innovation, and leadership across the school.
Article originally posted on BusinessWorld.in