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Do you need an MBA to be an Entrepreneur?

Do I need an MBA to be an entrepreneur

By EIBF President, David Falzani MBE

Since the MBA first materialised more than a century ago it’s been intrinsically linked to business career success.  After all, the programme is designed to prepare professionals for senior management positions within business, so it’s little wonder that many of those with MBAs have gone on to have wonderful business careers. You would therefore be forgiven for thinking that an MBA would be an invaluable – and even necessary – tool for launching your own business.  However, the answer to the questions ‘do you need an MBA to be an entrepreneur’ is a little more nuanced than you might initially think.

In today’s fast-paced digital business landscape, starting a business is easier than it’s ever been.  Start-ups are everywhere, and guess what? The vast majority are not led by people with MBAs.  Most people with that entrepreneurial fire tend to ‘learn by doing’, usually picking up useful advice from mentors and role models along the way.  Depending on their type of business, some of them may even enrol in educational accelerator programmes such as the Royal Academy of Engineering’s Enterprise Hub which is aimed at engineers.  If these entrepreneurs do take on an MBA, it’s usually after they’ve completed their first foray into the world of business. That’s not to say an MBA can’t be hugely advantageous, but it certainly isn’t a requirement.

When MBAs were first established, they were not really geared toward entrepreneurship. They were, and still are, a primer for business. They were designed to whet the appetites of candidates and equip them with the basic tools and knowledge needed to go on and thrive in their business careers, in whatever role they chose. However, like business itself, the MBA is always evolving. The past 15 years in particular have seen the MBA change considerably, now offering lots of entrepreneurial options that could easily set somebody on the path to launch their own enterprise.

Twenty years ago when I did my MBA, which spanned Europe and the USA, things looked quite different.  The European portion of my MBA had no exposure to entrepreneurship as a subject at all, whereas the USA portion not only recognised entrepreneurship, but dedicated a separate branch of teaching to it that covered specialised techniques and approaches to business.  Of course, things have changed today.  So, if you are considering an MBA and have that entrepreneurial fire within you, know that there are MBAs out there that will fully support it and arrange their teaching around it.  In fact, most MBAs will have a leaning one way or another depending on the schools that are providing them, and the electives that are available – that’s why it’s crucial to pick the right course at the right institution, and entrepreneurship is no exception.

While it probably doesn’t hurt to have an MBA, with the wealth of knowledge it brings, don’t let the fact that you don’t have one (or don’t have the time/resources to get one) hold you back. There are countless ways to quench that entrepreneurial thirst, from entrepreneurship programmes at universities to local business groups that let you liaise with successful business leaders.  An MBA is a valuable asset, but it’s far more focused on the bigger picture.  You might even find that you learn more from an MBA once you’ve tried your hands at business. Whether you win or lose, the experience alone will be enough to prepare you for an MBA, in the same way we recommend a few years in industry first for those thinking about an MBA as part of their career development.

An MBA is a fantastic educational experience that can provide a great career boost, but if your sole objective is to start your own business there’s probably a better route you can take in 2020.  For example, I’m a trainer on the Goldman Sachs 10,000 Small Business UK programme that runs out of Oxford University.  Each year it attracts 140 brilliant small business CEOs and very few of them have MBAs.  What they do have, however, is a huge amount of support and business advice from mentor figures and people taking part in the programme.  Similarly, there are many regional programmes specifically for start-ups, often run by local universities or business schools.

For example, at the University of Nottingham, where I’m a professor, we have a start-up Lab for new businesses, and more than 50 entrepreneurs in residence who are available to mentor, support and run workshops for young aspiring business leaders. While higher education qualifications are still very much valued, there seems to be an increasing appetite in entrepreneurial circles for raw, ‘learn by doing’ experience and the kind of knowledge that can really only be passed down from one successful business person to the next.

With this in mind, it’s safe to say that an MBA is most certainly not a requirement if you’re looking to start up your own business. By all means view it as an option, but know that there’s a wealth of support, advice and mentorship out there that could get you to where you need to be far more effectively and faster than an MBA.

If and when the time is right for you to do an MBA and you are a professional engineer considering an MBA, you can apply for a scholarship towards your study. Visit our MBA scholarship application page to learn about our £500,000 annual Sainsbury Management Fellows scholarships.

Photo by Austin Distel on Unsplash
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‘Better ways of working driven by COVID-19’ by SMF Perses Sethna  

Sainsbury Management Fellow, Perses Sethna- Director of Business Change Services at PRT Partners: Perses is a Chartered Engineer, Fellow of the Institution of Engineering & Technology, SMF and INSEAD MBA. He has held change leadership positions throughout his career at BT plc, Dixons Carphone Group and most recently his own business change consultancy PRT Partners Ltd.

He believes that mindful application of technology is the route to human progress, and that this requires above all the right conversations to be created between people across diverse business and technology functions in organisations.

In this article he reflects on the opportunity to accelerate the pace of such conversations, in response to the challenges presented by the COVID-19 pandemic.

For many years, we have heard that digital technologies can enable people to work and live in far more flexible and efficient ways. The COVID-19 pandemic has forced the pace of this realisation, crashing through traditional barriers to change in the working environment.

Many people have been unable to work together in the same physical location, and miss the deeper level of social interaction. However, they are also appreciating the many benefits that new ways of working from home, enabled by digital technology, can bring.

Few people are missing the time and energy expended in commuting and travel to meetings just because ‘that’s the way it’s always been done’.

Huge benefits have been seen all over the world in pollution reduction and improvements to our environment in a relatively short time. This shows the enormous long-term benefits that are possible, if we prepare for life and work beyond lockdown in a mindful and flexible way.

Simply returning to exactly ‘the way things were’ is not going to be an option.

In his well-regarded article “The Hammer and the Dance” (note 1) consultant and author Tomas Pueyo advocated a response to COVID-19 that authorities around the world have since taken. The first phase is aggressive action including population lockdowns (the Hammer); the second is a much longer period of vigilance including selective action to target local spikes of infection (the Dance).

A key feature of this approach is that during the second phase, responsibility for decision-making and action will increasingly pass from Governments to organisations and individuals.

So, are we ready for ‘the dance’?
Being ready for a long period of selective action means that organisations will, above all, require flexibility to adapt their ways of working quickly and often as circumstances change. For example, organisations re-opening their offices to employees may need to switch back to only online working in specific locations during local outbreaks of infection.

In most cases, the technology has been readily available for some time to enable such flexible ways of working, at least for office-based people in organisations. But we have often simply chosen not to use it. Why? Organisations have a unique opportunity to ask themselves this and other key questions brought to the surface by the pandemic. By considering these questions, they can design more effective ways of working, tailored to their own specific needs and culture, for years to come.

Flexible working

  • Why do we insist on seeing our staff in the office all day every day? Are we set up to manage performance as measured by outputs and results, rather than simply monitoring time spent in the office?
  •  Would our office-based people be more or less productive if allowed to structure their own time to work in the office, at home or elsewhere? Would this improve work-life balance? How could we avoid negative impacts such as reduced downtime for employees?
  • New disciplines will evolve with flexible working, such as more regular but shorter progress calls, shared dashboards of progress against team goals, automated task tracking against agreed deadlines and so on. How can we build these potentially threatening routines in a collaborative and trusted way, to increase the motivation and effectiveness of our teams?
  • How can our people in business functions be fully involved in the design of processes and technology to achieve the benefits of flexible working and other ‘digital transformations’?

Collaboration

  • How can we extend flexible working technology to break down boundaries between tribes and silos, and to create multidisciplinary teams across locations?
  • How can cross-functional workshops be mobilised online to work through inter-departmental problems, to implement the fixes using joint action plans?
  • How can we use more digital ways of working to reduce departmental politics?

The office and the environment

  • How can our offices be re-purposed to become the Hubs of the new flexible way of working?
  • How can most of our office space be turned over to socially-distanced collaboration (formal or informal meeting areas) rather than individual desks- since individual work can be done as effectively at home?
  • How much of our office space can be released? What would be the savings in property and travel costs?
  • How can we maximise changes that benefit the environment, such as reduced commuting?

Flexible resourcing

  • How can we optimise our blend of permanent and specialist temporary resources, so that we maximise our flexibility to respond to changing requirements?
  • How can we bring in temporary skills for short, specific pieces of work, with payment against agreed outcomes rather than day rates? How can we ensure that this approach complies with IR35 legislation?
  • How can we work with our Consulting partners to update the ‘land and expand’ business model into higher value, short-duration interventions focused on increasing the capability of our own organisation?
  • How can we use temporary expertise to help our employees create new ways of working that are tailored to the unique needs and culture of our own organisation?

Before the COVID-19 crisis, businesses globally were set to spend $7.1 Trillion over the next four years on the use of digital technology to improve their operations (note 2). Many such transformations have failed in the past (note 3), and the new environment will make success even more challenging.

Therefore, it is especially important that these questions are discussed by leadership teams to prepare for the ‘new normal’, fully engaging their people and their technology, business change and resourcing partners.

Coming soon: Look out for video interviews with the people creating better ways of working for the new normal.  These will be posted on the video page on this website from July 2020.  

Notes & sources

  1. Coronavirus: The Hammer and the Dance. What the Next 18 Months Can Look Like, if Leaders Buy Us Time. Tomas Pueyo https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56
  2. IDC FutureScape: Worldwide Digital Transformation 2020 Predictions https://www.idc.com/getdoc.jsp?containerId=US45569118
  3. Unlocking success in digital transformations. McKinsey&Company https://www.mckinsey.com/business-functions/organization/our-insights/unlocking-success-in-digital-transformations
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How 4 professional engineers used an MBA to change their careers

The MBA is a highly desired qualification by both young professionals and employers.  Not only does an MBA equip the student with a wealth of business and leadership skills, it  shows clear signs of an individual’s focus and ambition as well as an adventurous spirit – leaving a secure job to study for an MBA requires not only funds but courage.

MBAs benefit individuals, employers, and the economy. Although it is essential to hone skills in specialist areas, businesses are keen on hiring MBA graduates because they have a deeper understanding of a range of business practices that enable them to be more strategic and agile in their thinking and problem solving.

The MBA opens new career opportunities, helps students to gain better insight into their motivations and goals, and connects them with inspiring professionals who can support their career ambitions long term.  Taking an MBA is a major financial commitment and because of their prestige, the cost of attending the top international schools is high.  Consequently many students seek scholarships to support their studies.  For over 30 years, the Sainsbury Management Fellows (SMF) scholarships have been awarded to professional engineers who have clear leadership potential.   Today, there are 365 SMFs who, collectively, have been awarded £11 million in scholarships to enable them to acquire skills that help UK businesses succeed and the economy growth.

In this blog we introduce four Sainsbury Management Fellows who have used their MBA skills and experiences to steer their careers in new and exciting directions.

Engineering a Finance Career in Green Energy:  SMF Chris Gifford, Senior Risk Consultant, Chief Credit Officer, Vancity Community Investment Bank, Canada

After gaining his engineering degree at Oxford University, SMF Chris Gifford started his fulltime career in the power generation sector. He worked throughout the UK and internationally helping to operate and maintain the control and instrumentation systems of fossil-fuelled power stations.  He progressed into a commercial role, analysing the financial performance of the power stations, which gave him a deeper understanding of business and a desire to pursue his career in a business direction.

Chris decided that he wanted to work in the cutting-edge transition from fossil-fuel to green technology in a business and finance capacity, but he realised that he needed additional business skills to secure a top-level position in a leading company.  Because of his engineering background, prospective employers tended to pigeon-hole him as a techie. Chris knew that gaining an MBA would enhance his skills and make him more marketable.  The MBA, which he undertook at INSEAD, provided not only the vital business skills needed for a career shift, but accelerated an improvement in his interpersonal and leadership skills.

Today, Chris is the Senior Risk Consultant, Chief Credit Officer at Vancity Community Investment Bank in  Ontario, Canada where he uses his combined engineering and business skills to assess the viability and robustness of complex renewable energy proposals from businesses seeking finance, eliminating the need for the bank to use external professionals to carry out additional assessments.  In addition to identifying potential problems, Chris recommends improvements and efficiencies that allow important renewable energy projects to be funded.

Chris’ engineering background is a major asset in his role.  He explained: “My engineering skills are typically applied to evaluate whether businesses trying to access financing have fully understood the complexities for themselves.  There is a bias for optimism and sometimes blind spots when it comes to risk assessment; I provide an objective and pragmatic view on how likely a project is to succeed.”

Switching from a Technical to Management Role:  SMF Dere Ogbe, Shell Corporate Strategy and Portfolio Consultant, UK

SMF Dere Ogbe was appointed Senior Strategy and Portfolio Consultant at Shell after graduating from London Business School with an SMF-sponsored MBA.   He credits his MBA for galvanising his career in this new direction and says he now has the ability to lead both technical and commercial strategy projects.

Before taking his MBA, Dere was a Senior Operations Excellence Engineer at BP Exploration. This was a technical role which involved implementing best practices to drive continuous improvement across joint ventures in Europe, Middle East, and North Africa. This involved cascading business decisions into technical requirements and this gave Dere an insight into how commercial choices drive project design and operational requirements.  This awareness, coupled with the knowledge from courses such as Managing Engineering Projects, sparked his interest in business management.

Dere sites a number of ways that the MBA has helped to transform his career: “It has given me the necessary financial, strategic, and commercial skills to quickly analyse problems and propose possible solutions. The programme also enhanced my data analytical and leadership skills. Also, I feel very comfortable leading a wider range of people with different technical and commercial expertise.  With these additional skills, I can jump into projects and get up to speed quickly.  The part of my job I especially love is the challenge of thinking on my feet, rapidly uncovering the critical factors and, with the team, creating a roadmap to solve the problem.  The MBA has had a transformative effect on my career and leadership skills.” 

Billy Comes to Life Through Engineering and Business Talent: SMF Rob Deering, CEO, Billy, Australia

Before business school, SMF Rob Deeming gained a degree in mechanical engineering at the University of Nottingham. After graduation, he spent five years as a consultant at Bain & Company where he developed practical skills such as problem-solving and collaborative working.  This role gave him the time and freedom to decide what he wanted to do longer term.  He said: “It was an incredible place to start a career. The level of learning, skills development and personal support available in consulting is second-to-none.”

Rob took his MBA at Harvard and says that it gave him both personal and professional perspective: “It opened my eyes to new career pathways, in particular, those which combined his engineering and business skills.”  Since graduating, Rob has lived in both New York and Sydney where he has built several tech-driven businesses, including three start-ups.

The most recent entrepreneurial venture is a technology company, Billy, which addresses the fundamental challenges of caring for seniors, while allowing them to remain in their own homes as independently as possible, on their own terms. Billy uses a series of Internet of Things sensors to identify patterns of behavioural routine for seniors, and shares this information through an app, in real time, with family members and professional carers. Billy can read all the activities of daily living using smart analytics to determine patterns in routine and identify changes before they result in medical emergency.

The future is exciting for both Rob and the company; Billy is growing in size and reputation and is now in 1,000 homes across Australia and the USA. Initial feedback shows that customer confidence is high and there has been a reduction in hospitalisations in the households where Billy is installed.

Winning an SMF scholarship enabled Rob to undertake his prestigious MBA, which gave him the skills to follow his entrepreneurial dreams.

Engineers with Business Skills Transform UK Industry: SMF Ian Peerless, Operations Director, ExRobotics, UK

SMF Ian Peerless and ExRobotics Colleagues

Ian Peerless’ route to an engineering career began at the University of Southampton, where he graduated with a First in Civil Engineering, after which he spent a year with British Leyland in a mechanical engineering role.  The hydrocarbon industry in the North Sea was booming and he was keen to move into that sector, so gained a Petroleum Engineering Masters at Heriot-Watt University and shortly after graduating joined Shell as a Petroleum Engineer and enjoyed an international career for five years.

However, he reached a ‘crunch point’ in his career, as is often the case with young engineers.  At this point there is a choice; to work up through the ranks of a company as a pure engineer or to diversify and move upwards in a different direction.  Ian chose the latter. His interest in business management led him to the MBA, with a scholarship from SMF to attend IMD in Switzerland.

The MBA gave Ian the credibility required to step into a management role; a role that would otherwise been out of his reach. He was one of the first engineers to benefit from the SMF scholarship programme, and proved that having engineers in management roles throughout industrial companies is extremely valuable.

After the MBA he joined British Steel, where he gained a wealth of management experience. He worked in Business Development, Sales, Operations, and finished as the number two in the Business Strategy department reporting to the main board.   After 15 years with British Steel, Ian was enticed back to Shell, where he was a key member of an internal consultancy group.  He travelled the world advising, coaching and facilitating leadership teams on project management and contract strategy.   When that project was completed, he set up an independent consultancy, IPKA where he continued to perform a similar role to the Shell position, but with different oil and gas companies.

In 2010, Ian took on a Shell contract to develop an oilfield robot. He gained extensive knowledge of this specialist robotic niche which led him to form ExRobotics, a company that is tackling the problem of oil and gas operators being sent into hazardous, harsh, and remote locations. The robots can be permanently stationed at those locations, removing people from harm’s way as well as cutting costs and reducing lost production.

Summing up the benefits of the MBA, Ian said: “The MBA gave me skills that I still use in my work. In particular, the ability to understand a business, its markets, its competitive position, and to turn that into an action plan for success.  Furthermore, the MBA made me understand that if you combine the strengths of individuals and create a motivated team, wonderful things happen. The MBA not only changed the direction of my career it also changed my industry.  The combination of my life before the MBA (technical) has been combined with my life after the MBA (management) to create ExRobotics.”

How to Apply for the Sainsbury Management Fellows MBA Scholarship

If you are a professional engineer considering an MBA as one of the stepping-stones towards a business leadership career, visit our MBA scholarship application page, you could become one of our successful awardees –the individual scholarship is £50,000 and we award ten of these every year.