Entrepreneurship is undoubtedly difficult, and while many have strong technical skills, the art and science of running a business are often somewhat harder to master. A new paper from INSEAD documents a trial undertaken to test a new training program for entrepreneurs that aims to help improve their competencies in areas such as networking, human capital management and business model innovation.
“In addition to business model innovation, practitioners stress the importance of social capital for entrepreneurs. Entrepreneurs with personal networks (their set of interpersonal relationships) that are rich in social capital will find it easier to find relevant others who can help them in the resource mobilization process by making introductions, by sharing useful information and so forth,” the researchers explain.
Skills for scaling
The program is explicitly designed to support entrepreneurs operating in mature markets, and the RCT examined its application across 181 startups operating out of Singapore. The training included a couple of one day classroom-based sessions, with tailored coaching also provided for specific problems.
The analysis suggests that participants did gain a boost in terms of their ability to scale their business, with both sales and employee numbers growing at a higher rate than the control group. What’s more, the growth was especially strong for those who had set the most ambitious targets.
The researchers suggest that this is because people with greater human capital at the start of the program were better able to absorb the new knowledge they received, whereas those with ambitious goals also had a greater ability to link the new knowledge with the goals for their business.
“Our main findings that training entrepreneurs in growth-catalyst tools related to business model innovation, networking and team structuring has a causal effect on their venture’s growth suggests that more attention needs to be given to strategy and organization Scaling new ventures aspects of running new ventures,” the researchers conclude. “Furthermore, our findings suggest that not all entrepreneurs benefit equally from training in growth-catalyst tools. Rather entrepreneurs with high educational qualifications or higher work experience or higher growth goals benefit disproportionately, suggesting that training in growth-catalyst tools could be particularly useful and effective for entrepreneurs with high general human capital endowments or with greater growth motivations.”
Learning to be an entrepreneur
The researchers believe that their finding demonstrate how effective programs can be in improving understanding in areas such as business model innovation and the development of human capital.
While they accept that their study would need to be replicated on a larger scale and in different markets before the conclusions are applied more broadly, they nonetheless believe that it provides strong evidence to conduct such work.
The early success of the program has encouraged the Singaporean Ministry of Education to provide funding to scale it up, with the addition of new components to further enhance the capabilities and motivation of participants.
Just as with leadership, the question of whether entrepreneurship is something that can be effectively taught is one for the ages. This paper suggests in some ways, it most definitely can.
