Can Entrepreneurship Be Taught in a

BUSINESS EDUCATION

Classroom?
by Ashish K. Bhatia and Natalia Levina
August 07, 2020

Image Source/Getty Images

In these difficult times, we’ve made a number of our coronavirus articles free for all readers. To get all of HBR’s content
delivered to your inbox, sign up for the Daily Alert newsletter.
In early April, a Thai student in our entrepreneurship class saw a shortage of high quality,
low cost hand sanitizer across Thailand. To support the Covid relief effort and generate
revenue, he quickly shifted his family’s medical supply company to sanitizer production.
Closer to home, when Dollaride, a business incubated in NYU’s Future Labs, recognized
that the pandemic had eliminated demand for their shared commuting van business in
New York, they refreshed their business model to leverage their existing vans, technology,
and routes to support burgeoning package delivery demands.

Neither entrepreneur followed a typical business school approach when deciding to pivot
their business: they didn’t conduct a long-term market analysis, develop a business plan,
or weigh various alternative approaches. In fact, had they done these analyses, they might
have concluded that the short-term gains wouldn’t justify the retooling investment, or
they might have gotten stuck trying to figure out how to estimate the duration of the
pandemic or how soon global manufacturing might recover. Instead, they simply took
action based on the resources at their disposal.

This approach to entrepreneurship is called “effectuation,” or leveraging what we know,

who we know, and who we are in order to take action. Business schools don’t generally
teach this approach, as they tend to focus more on lengthy risk and return calculations.
But as we face an increasingly uncertain, complex future, schools must adopt new
teaching philosophies designed to forge agile, entrepreneurial leaders.

Can Business Schools Teach Entrepreneurship?

While modern MBA programs offer a host of entrepreneurship programming ranging from
formal coursework to startup competitions and incubators, there is a great degree of
skepticism around the idea that entrepreneurship can be taught by academics in a
classroom. Countless successful entrepreneurs never went to business school — many
didn’t even graduate from college. Moreover, developing the penchant for imagination,
disruption, and counterintuitive action required for effective entrepreneurship doesn’t
generally fit into a typical business school curriculum defined by abstract analytical
models and precise calculations.
FURTHER READING Nevertheless, many schools feel that there is
Coronavirus:
Recovery Leadership and still a place for formal education in the world
Book of entrepreneurship, and have taken steps to
$22.95 update their offerings to meet the needs of
today’s students. In a recent study, we
View Details looked at three top North American MBA
programs to better understand how they are
approaching this challenge. In an industry
where programs are prone to mimicking one
another, we found that these programs broke the mold and developed their own
philosophies in teaching entrepreneurship.

The first approach we observed focused on instilling an appreciation for the value of real-
life experience with an “operating theater” classroom setup. The University of Toronto’s
Rotman School of Management converted their entrepreneurship classroom into a
medical-school-style operating theater, where students sit in a large auditorium and watch
as a professor performs surgery not on a human body, but on a startup. In
Rotman’s Creative Destruction Lab, a panel of established entrepreneurs join the
professors in poking and prodding at these startups, helping students absorb the intuition
that entrepreneurship skills can only be developed through experience. Other business
schools have adopted similar programs, such as NYU Stern’s Endless Frontier Labs, which
shares Rotman’s focus on experiential learning.

The second approach we observed focused on “rewiring” students to take action instead of
falling into analysis paralysis. We all have a voice in our heads that says, “What if this goes
wrong?” or “How do I manage this risk?” Imagine the power of an education that helps
you quiet that voice and instead say, “What if it goes right?” The University of Virginia’s
Darden School of Business is the birthplace of “effectual” entrepreneurship, an approach
that invites students to recognize their existing entrepreneurial resources and accept a
certain amount of risk. This mindset is antithetical to a more conventional business school
approach that emphasizes minimizing risk. Additionally, while the business world is often
known for its cut-throat, fiercely competitive nature, Darden’s program instills in students
an appreciation for the power of collaborative innovation by encouraging students to share
ideas openly with their peers and tap into diverse insights and perspectives to co-create
entrepreneurial ventures.

The final program we observed took more of a traditional business school approach. Our
research suggests that the University of Pennsylvania’s Wharton School continues to
emphasize the types of resource and risk optimization approaches that are more
characteristic of the rest of the business school world. This approach is grounded in the
idea that business schools should teach entrepreneurship in a similar way to how other
subjects are taught: by providing students with analytical models and tools from published
academic research on new venture creation. While this philosophy may be helpful for
more mature startups, as well as for helping founders avoid common startup pitfalls —
such as choosing the wrong co-founder, accepting poor venture finance terms, or making
suboptimal product decisions — it’s less useful for entrepreneurs dealing with extreme
uncertainty.

Educate MBA Students to Embrace an Unknowable Future

The current pandemic illustrates the importance of preparing entrepreneurs to face an
increasingly complex, uncertain world. We must educate these future leaders to view the
uncertainty of our unknowable future not as a problem to be solved, but rather as a reality
to be embraced.

After all, in the unknowable future, all leaders will need to be entrepreneurs: visionaries
that can imagine, adapt, and act nimbly to address whatever challenges come their way.
Business schools should not delay in adopting new teaching philosophies that empower
the next generation of entrepreneurs — as well as all business leaders — to meet these
challenges.

If our content helps you to contend with coronavirus and other challenges, please consider subscribing to HBR. A
subscription purchase is the best way to support the creation of these resources.
Ashish K. Bhatia is a Clinical Associate Professor of Management & Entrepreneurship and the Academic
Director of the B.S. in Business, Technology, and Entrepreneurship Program at NYU Stern School of Business. See
Ashish’s faculty bio here.

Natalia Levina is the Toyota Motors Corporation Term Professor of Information Systems at NYU Stern School
of Business and Director of the Fubon Center for Technology, Business and Innovation. See Natalia’s faculty bio
here.

This article is about BUSINESS EDUCATION

 Follow This Topic
Related Topics: Entrepreneurship

Comments
Leave a Comment

Post Comment
7 COMMENTS

Martijn Driessen 13 days ago

Great post. Fully agree with an even greater need than before on empowering the next generation of
entrepreneurs and entrepreneurial leaders. That calls for developing an entrepreneurial mindset. Business
schools can teach entrepreneurship. HE, too, by the way. The best way is through experiential learning in
student companies; learning by doing. Research has proven this also.
However, there is one critical condition: the quality of the teacher. Due to a teachers' lack of commitment and
understanding of how to coach students on their entrepreneurial thinking and mindset, about half of the
students who enrolled in student company programs - both voluntary and mandatory - showed no growth at all
in their entrepreneurial mindset. Those students were left behind without a clue about their learning
experiences. So, the coaching quality of the teacher is a key discriminator for new teaching philosophies.
 Reply 10
 Join The Conversation

POSTING GUIDELINES
We hope the conversations that take place on HBR.org will be energetic, constructive, and thought-provoking. To comment, readers must
sign in or register. And to ensure the quality of the discussion, our moderating team will review all comments and may edit them for clarity,
length, and relevance. Comments that are overly promotional, mean-spirited, or off-topic may be deleted per the moderators' judgment. All
postings become the property of Harvard Business Publishing.