Entrepreneurship

Transitioning the Family Business Entrepreneurial Culture through Training (for Advisors’ Eyes Only)

Weekly Edition • March 6, 2024

In this article, I consider the challenges and opportunities that advisors who choose to become facilitators in entrepreneurial and intrapreneurial education might encounter.

Let’s proceed with working definitions of entrepreneur and intrapreneur:

Facilitating Entrepreneurship and Intrapreneurship Education with Clients

Family enterprise advisors can look at expanded ways to market their knowledge resources, stretching their product strategy to include entrepreneurship and intrapreneurship education—either as a standalone paid product or a freemium strategy to gain clients with micro-learning events. While offering this type of education may be out of the norm for most advisors, it can be an additional advising offering—one that assists family enterprise clients in promoting entrepreneurial behaviour in multi-generational clients.

A decade ago, my colleagues and I decided to develop a bachelor’s degree curriculum in management and entrepreneurship at the community college level. We soon found that entrepreneurship had some pedagogical peculiarities. Specifically—how do we get students to think (and act) as entrepreneurs?

However, teaching and facilitating entrepreneurship requires a different approach from many other academic subjects.

Entrepreneurship education is a relatively new field, but it is a rapidly growing discipline, as many universities and colleges now have both courses and degrees in entrepreneurship. It differs from teaching mathematics or English, which can be done almost entirely in the classroom.

Entrepreneurship training, however, requires unique approaches:

Three core course strategies to infuse entrepreneurial managerial thinking are needed.

First, remember that subsequent generation family members and/or non-family managers may not have the same mindset as the first generation. Entrepreneurs differ from the average manager in that they think and act differently.

Entrepreneurs have a story to tell that includes the creative problem-solving abilities that were used to overcome the various challenges encountered while building their businesses. For many entrepreneurial educators the use of a well-written case study is an effective tool to provide students with an insider’s view of real-world problems and the applicability to their own organization’s situation.

A second strategy is to use real-time simulations. These could be virtual games that trainees can play to improve their abilities in identifying opportunities and developing risk management strategies in the face of extreme uncertainty. While stimulations cannot model the real world entirely, the potential in other fields, such as weather forecasting, shows it can make predictions.

Thirdly, think of entrepreneurship as a game of experimentation. Frequently, aspiring entrepreneurs must embrace uncertainty (without a proven toolbox) in order to unlock opportunity. Using experimentation, the student can design a business test for an idea (in a sandbox environment) in order to determine its market acceptance and viability.

The Role of the Advisor as Facilitator

An advisor turned facilitator might encounter the “do-it-yourself objection” from clients—a belief that entrepreneurship can only be learned by forging ahead without assistance or training. When family business founders try to transfer entrepreneurial knowledge directly, they often face obstacles. For example, since entrepreneurs often learn from experience and experimentation, transferring this tacit knowledge can be difficult as it is specific to their own entrepreneurial history and story. The dynamic that may develop in a relationship between a mentor and mentee, coupled with close family ties, could cause conflict. There is also a danger that the entrepreneur, while successful in their own business ventures, may not necessarily have adequate mentorship or training skills. Additionally, the entrepreneurial mentor may not have the time to devote to this type of training. This is an opportunity for advisors to act as facilitators in the knowledge and skills transfer.

What About Intrapreneurship?

Can employees in a large organization practice entrepreneurship as the founders did? There is an emerging genre called intrapreneurship, where employees in a firm think and act as entrepreneurs within their organizations, despite not having ultimate decision-making authority.

Intrapreneurship is often encouraged within an organization in a variety of ways: providing space and time to employees and allowing sandbox experimentation while managing real-time risk.

Consider for example: Bernard Marcus and Arthur Blank, founders of Home Depot. Bernard and Arthur were co-workers at Handy Dan Improvement in California. During their time there, they floated the idea of a big-box home improvement store concept with their employers, but their bosses were not convinced. So, they tried an interesting business experiment by testing low prices in one location. The results were increased sales volume while cost as a percent of sales fell, leading to higher margins. Despite a profitable test, the parent company of Handy Dan was undergoing a restructuring, and the future founders of Home Depot lost their jobs.

Changing Hats—Again

The role of family enterprise advisors in continuing the legacy rests on their ability to build the future family business on a foundation of enduring entrepreneurship. However, the advisor’s mindset must change to understand how to develop an innovative pedagogical method to keep the founders’ spirit alive through generations.

Reference

¹“What Is Intrapreneurship, and How Can You Cultivate It at Your Company?” Stanford Online, accessed February 22, 2024, https://online.stanford.edu/what-intrapreneurship-and-how-can-you-cultivate-it-your-company.