As if MBAs didn’t have enough problems already. First, they were being likened to monsters who caused the economic meltdown. Now, there are rumblings that MBAs don’t have what it takes to help mend the economic crisis.
“As the economy experiences the most deep-seated changes in decades, maybe it’s time to change our minds about what kinds of people are best-equipped to become business leaders,” writes Bill Taylor on his recent Harvard Business blog post “MBAs vs. Entrepreneurs: Who Has the Right Stuff for Tough Times?”
Taylor’s money is on the entrepreneurs.
Entrepreneurs and MBAs think differently
Citing research from Professor Saras Sarasvathy, who teaches entrepreneurship at the Darden Graduate School of Business at the University of Virginia, Taylor writes that entrepreneurs’ problem-solving methods are different from those of MBAs, and possibly superior in crisis situations.
The article explains that MBAs practice “causal” reasoning, while entrepreneurs are “effectual.” The difference comes down to this:
Causal reasoning is about how much you expect to gain; effectual reasoning is about how much you can afford to lose. Causal reasoning revolves around competitive analysis and zero-sum logic; effectual reasoning embraces networks and partnerships. Causal reasoning ‘urges the exploitation of pre-existing knowledge’; effectual reasoning stresses the inevitability of surprises and the leveraging of options.
So what do those differences mean?
Again citing Sarasvathy, Taylor writes that MBAs believe that predicting the future means controlling it, and so they place a lot of weight on focus groups and statistical models. Entrepreneurs, on the other hand, are not interested in predicting the future so much as inventing it, by “marshalling scarce resources, understanding that surprises are to be expected rather than avoided [and] reacting to them fast.”
The entrepreneurial mindset, Taylor writes, is the obvious “match” for the current environment. He concludes that entrepreneurs, “are the ones with the right stuff for tough times.”
While there is certainly much to learn from non-MBA holding entrepreneurs, the distinction Taylor draws between MBAs and entrepreneurs feels false to me. Sarasvathy, after all, teaches entrepreneurship to MBA students, and countless MBAs have gone on to become successful entrepreneurs. Though in the past I’ve questioned whether entrepreneurship can truly be taught, I’ve also written about how my MBA education gave me necessary skills for launching my businesses. Instead of putting the two parties in the ring, why not encourage them to bring their unique resources together and duke it out with the real enemy: the economic crisis?
Boxing ring image courtesy of Flickr user craighwk, CC 2.0
