MBAs Everywhere... Entrepreneurs Missing!

By Harshdeep Jolly

It is believed that business schools are good training grounds for budding entrepreneurs and leading global business schools have indeed produced many successful entrepreneurs. India’s premier business schools (like the IIMs, ISB, and XLRI etc) produce a few thousand MBAs every year. How many actually become entrepreneurs, say, within Five years of graduation? While I don’t know of any exhaustive survey on this, but anecdotal numbers and what one reads seems to suggest that the percentage of MBAs becoming entrepreneurs is quite low. A large chunk of those who go the entrepreneurship way are either returning to family business or start something new, but part of the overall family business. The ones who start something from scratch are even fewer. So, what prevents the bright business graduates, who are amongst the cream of their peer set, from venturing into something of their own? Why are they happy (if they are!) being good managers only (not that there is anything wrong in that!)?

Finding scapegoats for any problem is the easiest to do – so let me look at a possible list of “culprits”! To start with, a look at the profile of people seeking admission to premier business schools will shed some light. Most of the batch at an IIM or other top business schools (Except for Indian School of Business, Hyderabad) is made up of fresh graduates or those with barely an year or two of work experience. This means that they lack the depth of management experience and exposure to practical business ideas which their peers from global business schools (who have at least four to five years of experience under their belt) have. Greater work experience also brings greater personal financial stability, thereby increasing risk appetite. Greater work experience also brings about greater credibility when a person or people go out seeking for funds for their proposed business. A fresh MBA, who has never worked before, may have a much tougher time convincing prospective investors about the viability of his business plans!

Can we point fingers at the education system (It’s everyone’s favorite punching bag, isn’t it?)? Right from school to college, our education system stresses on ‘quantum of knowledge’ with a focus cramming up facts and concepts rather than ‘innovative application of knowledge’. We are great at solving complex mathematical problems and analytical questions. But, creativity and independent thought don’t seem to be a focus area in our education system. By the way, on a side note, do compare the mathematics being tested in many MBA entrance examinations with the Quantitative ability section on the GMAT – the test scores used for admission by global business schools.

By the time, a person enters business school; he comes ‘trained’ to think in a particular way, courtesy 15-16 years of education that he has got. Even if the business school curriculum is designed to give a holistic education and encourage creative thinking, a lot of bright guys are more attracted to solving complex pricing problems in derivatives (maybe it no longer would be the case, thanks to Sub prime mess!) than spend time on the so called “softer management courses”. You will find electives on financial derivatives and investment banking oversubscribed; while, those on Human Resources or ‘softer topics’ barely getting the minimum enrollment to keep the course afloat! If you happen to take one of the very few courses that focus on creativity or soft skills, you are taunted for taking an “easy course” to score high grades! With this mindset, can we develop people who can think beyond numbers and analysis?

Entrepreneurship is defined as reward for risk taking. What are some of the primary reasons for people to do an MBA out here? – great placement salaries being propagated in the media (that is good material for another article!), a good way to get away from a “coding job” (remember a majority of an IIM MBA batch consists of engineers!), a gateway to good careers and cushy lifestyle. So, if I choose to get into something that is seen as a safe and sure shot route to a good life, I basically will not be the kind of person who will risk starting something on my own. Will I? Also, in general, compared to western societies, students here are encouraged to be go for safe careers than be adventurous and we place lot more importance on ‘being successful’. Thus, it increases our fear of failure; in turn, making us more risk averse.

So, what can we do to address this situation? How do we encourage bright, young graduates to think creatively and venture into something of their own? Your thoughts are welcome.