When ambition meets education

Entrepreneurs are a unique breed. They have the passion and drive to start their own business, but often lack the skillset to make it successful. That's where growth catalyst training comes in.

For example, by learning how to design their business models and leverage external networks effectively, entrepreneurs can put themselves in a much better position to grow their businesses exponentially. But for both time and resource-strapped start-up founders, is entrepreneurship training worth the investment?

A research team composed of SMU Associate Professor of Strategic Management Reddi Kotha and Professor Bala Vissa, INSEAD, and two other co-authors sought the answer to that question. In the paper, “Do Ambitious Entrepreneurs Benefit More from Training?”, they found that ventures led by entrepreneurs that received training experienced sales growth of over 72 per cent, compared to about 30 per cent for those in the control condition.

Through a field experiment using data from 181 Singapore-based, early-growth entrepreneurs drawn from a broad range of industry sectors, the team focused on growth-catalyst tools relevant for formulating and executing innovation-led growth. Here's what else they found out:

Entrepreneurs with a higher growth goal will be more receptive to the training content
There's definitely some truth to the idea that ambitious people are more receptive to growth training. After all, if you're constantly striving to improve and reach your goals, then it only makes sense that you would be happy to invest in opportunities to learn and grow. High achievers tend to understand that personal development is essential to success, so they're open to learning new skills and strategies that can help them get ahead.

For entrepreneurs, growth goals are about expanding their businesses and achieving new levels of success. This can involve expanding into new markets, developing new products or services, or simply increasing sales and profits. Often, these objectives are related to the venture size the entrepreneur expects to achieve, states the study.

The next time you scoff at an entrepreneur with lofty plans to scale their business, remember this: the research showed that ventures led by entrepreneurs with more ambitious growth expectations experienced sales growth of a staggering 100 per cent, compared to just 10 per cent for those in the control condition.

Entrepreneurs may vary in their growth goals due to differences in their human and social capital and psychological orientation, as well as education and work experience. Likewise, well-connected founders with a vast and diverse network may also have more significant growth goals.

Above all, having ambitious goals also seems to correlate positively with training benefits, as demonstrated by the research. The training received by entrepreneurs with growth goals likely resulted in changes in their thinking and behaviour — they proved to have understood and employed the tools and frameworks taught at the training intervention better than their other peers.

The type of training matters: Going beyond basic finance & marketing
Ask budding entrepreneurs what essential skills they hope to hone, and they would likely mention marketing and finance. After all, Steve Jobs was as much a brilliant inventor as he was a marketing genius, while Phil Knight worked as a certified public accountant before growing Nike into a sporting goods behemoth.

Unsurprisingly, existing research on the beneficial effects of training on entrepreneurs focused on financial and marketing education. But, as any entrepreneur would attest, business training should go beyond mere dollars and cents. In addition to learning about financial concepts and strategies, aspiring business owners and executives can benefit from studying various growth catalysts and real-world examples of ways to generate sales.

Besides being a fancy way of impressing would-be investors, an innovation management framework, for example, provides a roadmap for managing the various stages of creativity, starting with strategic mastery and ending in market development.

Programmes such as the SMU Master of Science in Innovation are designed to empower business leaders with competencies for sustainable growth. As such, extensive growth catalyst training “drawn from strategy and organisation science” enable the formulation and execution of innovative growth strategies — leading to greater growth success.

The causal effect of growth catalyst tools on new ventures

During the research, the research team zoned in on specific growth catalyst tools: business-model design, leveraging external networks, and building internal teams.

They wrote, “business model innovation helped entrepreneurs to reimagine the possibilities of their business, and also to represent their business in a coherent yet succinct fashion to influential external resource-holders, such as potential customers, alliance partners, and investors.”

Moreover, networking is a powerful tool that can help businesses grow. For entrepreneurs, networking can be a crucial growth catalyst, helping them connect with the right people and resources to take their business to the next level. Leaders of later-stage companies can also benefit from networking as a tool to help drive sales growth by expanding their reach and introducing them to new potential customers.

“The networking training enabled entrepreneurs to access new resource-holders successfully,” adds Associate Prof Kotha. Hence, a world-class programme with a global cohort is the perfect starting point for founders to build a network that will last a lifetime.

Internal teams can also help business leaders better understand their strengths and weaknesses, which can help inform future strategies. Additionally, an internal team can streamline operations and improve communication between different parts of the company, and create a sense of ownership and commitment to the company among employees.

It is evident that entrepreneurs with a thirst for growth and expansion are the best candidates to undergo entrepreneurship training. They are the ones who reap the most benefits and experience significant venture growth after training. However, not all entrepreneurship courses or programs are the right fit. That's why it's important to go beyond the basics and seek training that provides the right tools to meet your goals.

To kickstart your entrepreneurial potential, check out the SMU MSc in Innovation programme, a practice-based entrepreneurship education to help drive sustained growth.