Dialogue: Cashing in on our own experiences

Many businesses start small and stay that way. ARNOLD KRANSDORFF* shows how to change that.

Puzzling and apparently contradictory it may be, but the report by the Global Entrepreneurial Monitor that puts New Zealand at the top of the world rankings in enterprise creation, but near the bottom when it comes to turning small businesses into larger companies mirrors what has been happening in Britain for years.

If New Zealand wants to learn from the British experience, it would be instructive to consider another glaring similarity - how entrepreneurship is taught, or not, as is the case.

In both countries, educators are still wedded to methodologies dominated by macro-economics and quantitative analysis. This is characterised by the virtual absence in the educational systems of local corporate history and wider-based business history as a teaching tool.

Without any experiential learning - the process of applying one's own and others' experience - new entrants to the workplace have little inheritance and, as such, have to start from scratch.

Their unfamiliarity with tried and tested local experience also ensures that they are not able to benefit from their predecessors' hindsight, all of which contributes to a society where the enterprise ethic is neither instinctive nor professionalised, and repeated mistakes, reinvented wheels and other unlearned lessons underscore decision-making weakness.

An environment where - in the Global Entrepreneurial Monitor's words - there is a generally anti-business attitude, a punitive approach to entrepreneurial failure, a negative attitude towards entrepreneurial success and an inability on the part of the education system to produce people with entrepreneurial skills.

Curiously, the principle of experiential learning is already well established elsewhere in the educational sector. Musicians study music history, artists art history, architects architectural history and soldiers military history.

But for the people who have to go out and earn their livings in other ways - ie, almost everyone else - there is virtually no corporate history or wider business history in the education system, even in New Zealand business schools.

The only history that does feature in business education, albeit in declining measure, is economic history, which deals with macro fiscal issues as they affect national and international constituencies, a discipline that is only remotely associated with the day-to-day running of a business.

Educators in business schools would probably insist that they are using experiential learning techniques when they refer to case studies.

Almost invariably, however, the examples used are of British, American or Japanese origin and are usually no more than summarised snapshot examples to explain the workings of some functional management discipline.

The wider picture illustrating the more complex and intimate nature of running a real business is studiously avoided.

While not suggesting that the learning opportunities presented by external environments are irrelevant, the point is that these non-New Zealand case studies are based on quite different business cultures and legacies. As a rule, people learn better from their own experiences than the experience of others, not least because the context is more familiar.

So, what to do?

New Zealand should have its own independent business history institute. Through it, a new breed of historian will need to emerge to produce suitable local case studies and wider-based business history that takes the genre beyond public relations.

If the output can be produced with genuine usage in industry - for, say, management development, induction or marketing - it should be possible to get the institute financed almost entirely by industry. On the back of this application can be produced the material for the education sector.

To allow the maximum business inheritance, schools and universities should - at the very least - be able to provide students with a selection of readable biographies of companies in the industries in which they intend to work.



For the schools sector, they could inspire the reaction: "If they can do it, so can I", helping to boost the rate of small business creation and provide the new generation of businessmen with the benefit of their predecessors' tried-and-tested experience.

For the higher education sector, students could be intellectually applying the companies' experiences in ways that would illustrate how previous mistakes and successes could be improved upon, helping to counterbalance the pervasive theoretical teaching style evident in New Zealand.

For those who subscribe to the premise of a relationship between education and national prosperity, the widespread absence of corporate and business history as curricula subjects is a glaring omission. In the Information Age, the genre is as much knowledge as anything else and, as such, should not be treated as a narrow-interest scholarly pursuit.

The reality is that New Zealand has already paid for its experiences many times over. Why keep on reinventing the wheel?

Until industry and education recognise this logic - and the enormous cost of ignoring it - the country will have to continue to depend on informal and indiscriminate means to learn from experiences.

In his 225-year-old book The Wealth of Nations, Adam Smith described Britain as a nation of shopkeepers. His modern edition might refer to it as a nation of small shopkeepers. If both Britain and New Zealand want to avoid the description becoming an on-going reality, it would be timely to employ some experiential learning.

* This article refers to a paper to be published shortly by the Nottingham University Business School. It is available at Corporate Amnesia or, by email, on request to ak@corporate-amnesia.com.

* Arnold Kransdorff is a specialist in experiential learning. He is the author of Corporate Amnesia, which was short-listed for Britain's Management Book of the Year prize in 1999.