Entrepreneurial Authority
- Thursday, December 10, 2009, 6:40
For a man who has researched on ‘Entrepreneurship’ for over 20 years, the acclaim ‘world’s leading authority on Entrepreneurship’ is a fitting one. With deep interest to develop the spirit of entrepreneurship, he gives training programmes through his firm.
The Farrell Company, established in 1983, with two offices in Arizona and Virginia in US, has now over 20 affiliate offices around the world, and a growing base of clients and trainees. The company’s programs have been widely accalaimed and is very much in demand. The Companies clients include Coca Cola, American Express, Toyota and Nabisco amoung others.
A graduate of Harward Business School, Larry was the former Vice Presidnt of American Express and former President of the worldwide consulting and training firm Kepner- Tregoe. He has authored three books: The Spirit of Enterprise (1994), The Entrepreneurial Age (2001), Getting Entrepreneurial! (2003), and the fourth one awaited.
How does it feel being called the International Authority for Entrepreneurship?
Strange! I feel strange, because you pick up a field and you work and you work….. and then pretty soon, someone says: Oh he must be the expert on this because, he keeps working on the same thing and I feel like I’m continuing to learn.
How did your interest in Entrepreneurship develop?
I was the President of a Management Consulting Company in the US. As General Management Consultants, we were going and helping companies with strategic planning, the processes, do this, do that. But most of what we did with the clients did seem to help too much. Their problem was that they were not growing, they were declining and they wanted to grow and I got discouraged with all that I learned at Harward Business School, which was not really helping them- big companies. Then I thought to myself who knows the most about growing business not managing them, creating the products and marketing them. I thought entrepreneurs know that and that is what they do.
Then I began reading, talking to entrepreneurs; for the first time I began thinking about it, researching about entrepreneurs, interviewing them and it became interesting. I should say that Harward Business School has no single class on entrepreneurship. It became so interesting that I quit my job, started researching to give training by organizing seminars on what great entrepreneurs do to grow their business.
Who was your first client?
My first client was IBM in December 2004.
What is the most crucial factor of the decision that an entrepreneur has to make?
The most crucial factor is very simple, entrepreneurs have to know how to make a product, the world wants to have. So knowing how to make a product or deliver a service, to come up with a product- service idea, is the most important thing. It is not even finance, it is can you come up with a product or service that the market wants and most of the business schools around the world don’t teach that. How can you make something, how can you print a magazine, how can you make good food, these are all entrepreneurial products.
So we teach our students, the first thing is, you should find a product or a service you think the market will want and you have to become expert at that. Later you can out worry about management. The first step is to go market with a good product, because most of the growing entrepreneurs like Richard Brandson or Mr. Harnett in Japan, they never went to management school, they know how to make a product.
What really makes an entrepreneur?
We define entrepreneurs by what they do, we don’t worry so much about their psychological profile, are they big risk takers or not. I am not that sure that’s so important. What we teach is that all entrepreneurs whether they are in China or India or Brazil or US. They more or less do the same things at work. They have the same entrepreneurial practices. And we think that these four important things that we teach: Sense of Mission, Customer/ product Vision, High speed innovation, Self inspired behaviour, are essential to make a great entrepreneur. There may be other things they do, but 99% of all the entrepreneurs we researched, had these four things.
What is your opinion about first generation entrepreneurs, who don’t have a family background in business?
For we actually, they are the only entrepreneurs. If you take over your fathers business, you are not an entrepreneur, you are a manager. And I love what the Chinese say, I think you have this in India also. The Chinese say: “beware of the third generation”; the first generation, we create a business the second generation, they spend all the money and the third generation, destroys the business. So the second and third generations, they are not entrepreneurs they are taking their fathers idea and sometimes destroying it.
So the true entrepreneur is the one who starts something completely new, on his own. His family may give him some money $ 10,000 or something to start with. People who inherit their father’s business, they say it to me, I am an entrepreneur, I am the owner of this business. I say no, you are not, your father was an entrepreneur, you are just a manager.
In your third book- ‘Getting Entrepreneurial’, it says that 70% of young people want to start up a business, to become an entrepreneur. Do you think too many entrepreneurs coming up, without any basic idea of entrepreneurship, can harm entrepreneurship?
It could. Right now every three companies that try to start up, two fail. So the success rate is one out of three. My objective would be, if we could teach people enough so that, we can change that, may be two successes and one failure. That would be good. Of course, failures are part of entrepreneurship. Most of these entrepreneurs they are not afraid of really good failures. They always try to learn something that they can try again. But of the 70% of people thinking about it, only 15% give it a try sometime in their life and 5 % are successful and this 5% may be it should become 10 or 20%. But of course entrepreneurs need to have employees. So I am not saying everybody has to be an entrepreneur. But the reason why India, or any other economy needs we know this, entrepreneurs create most of the jobs; may be 70 to 80% of all the jobs are created by small businesses, by entrepreneurs. So the economy of India desperately needs more of them, because we need more jobs and I have noticed in my speeches in India, which is very popular and they like it. I teach a formula, that’s called the Job-baby ratio. Creating jobs creating babies, your job creation rates have to exceed your birth rates or you are going to become poor. You cannot produce more people than jobs it has to keep producing jobs.
Do you thing the Indian mindset is apt for entrepreneurship?
I do and I am the one who believes that people become entrepreneurs, when the cultural environment is positive about entrepreneurship. So I see so many Indian’s living here they may be a good employee or an upstart, they go to US and become entrepreneurs. So that’s amazing! So I think in Indians, there is a lot of entrepreneurial spirit but perhaps the culture, perhaps the surroundings does not encourage it so much. But if you put an Indian in an environment that encourages entrepreneurship, Bang! Its amazing. But here in Kerala they don’t want to be entrepreneurs too much, when they go to New York, Washington or Silicon Valley, they want to start a company.
