SMEs: Entrepreneurs go academic

Larger companies often turn to business schools when they need a new direction, but training is not the sole preserve of multinationals – small and medium-sized enterprises are realising that they too can benefit substantially from executive education.

Babson College in Massachusetts in the US is renowned for its teaching of entrepreneurship.

“Turning to us automatically [for help] is what small businesses never do,” says Elaine Eisenman, dean of Babson executive education. “They believe the price is too high and that business schools are not interested in small companies.

“Usually their first response is to find a consultant.

“Often, by the time they come to us, things are pretty dire,” adds Josh Brand, senior director of client relationships.

Gerard Burke, director of the business growth and development programme at Cranfield School of Management in the UK, says that while large businesses have training budgets and development is institutionalised, owner managers do not immediately consider business school when looking for help.

“In my experience owner managers …tend to be pragmatic and highly action-orientated,” he says. “They would not necessarily see business schools as the source of that.”

Nelson Phillips, professor of strategy and organisational behaviour at Tanaka Business School, London, says innovation, entrepreneurship and development are the key issues for most SMEs.

Joseph Pistrui, associate dean executive education at IE Business School in Spain believes that smaller enterprises use business education differently from larger organisations.

“Whilst the large organisations tend to have well-regulated strategic change around talent development, the SME tends to take a more à la carte approach and is focused more on a similar group of specific needs,” he says.

Tanaka focuses on custom programmes to help small and medium-sized organisations. One such programme is with the Royal Society in London – one of the oldest national academies of sciences in the world. It aims to improve connections between business and science and has been designed to help fellows of the society understand the relationship between science and industry, to learn to become entrepreneurs by translating their scientific know-how into commercial products and to become better managers.

The programme has been very successful, says Prof Phillips, and the school is just starting its third cohort.

Design London – a collaborative partnership between Tanaka, Imperial college’s faculty of engineering and the Royal College of Art – is also focused on smaller businesses.

“We want clients to take the message about how design-led innovation can help transform the business performance of SMEs,” says Nick Leon, project director. The school offers a suite of complementary programmes to enhance the scope of the programmes and intensify the returns for business, he adds.

Cranfield has been running a business growth and development programme for 20 years.

Their programme is specifically designed for owner managers who are ambitious and want to move the business on and is “not for lifestyle entrepreneurs”. To qualify for the programme businesses must be three years old, have turnover of £500,000 ($976,813) to £20m and at least 200 members of staff.

About 1,000 individuals have been through Cranfield’s BGPD programme, including Karan Bilimoria, the creator of Cobra Beer.

At Babson, Ms Eisenman says that what many smaller operations crave is exposure to other family or small businesses. The school has recently started working much more closely with trade associations to help reach them.

The school has launched a new programme with the National Automobile Dealers Association – an association that represents 95 per cent of the country’s 23,000 car dealers, which are largely family owned businesses.

The Dealership Executive Education Programme concentrates on personal leadership and tackles issues such as talent management, dealing with conflict, succession and how to separate governance from management.

The first cohort – 25 car dealers consisting mainly of family successors and a few general managers – has just started. It will run over 16 months with a series of one week sessions, action learning and an individual development programme.

More tailored programmes for smaller businesses are appearing, but entrepreneur Peter Cullum, an alumnus of London’s Cass Business School and founder of the Towergate Partnership, Europe’s largest independently owned insurance intermediary, believes there is still much to be done. He has recently donated £10m to Cass to establish a centre for entrepreneurship and help provide fledgling entrepreneurs with capital to set up their own businesses.

Business schools, says Mr Cullum, need to pay greater attention to the entrepreneur.

“Small enterprise is still the backbone of the UK economy, I don’t think that gets recognised really,” he says.