Tuesday, July 25, 2006
Is education an impediment or an incentive for business success?
Even more startling, was this comment from an elderly gentleman representing a regional business council,” You don’t need an education to run a business, just look at Bill Gates and (Sir) Richard Branson, they made by just applying themselves to an idea.” Contrast this with another view on the support to would-be (small) business owners, this is what `our friend’ said, “Many of the cases that come before us do not demonstrate sufficient business experience, these people usually have hairy-fairy ideas but they don’t know how to make it work.” What a blatant contradiction; one the one hand, the argument favoured Gates and Branson never mind their limited educational attainment. One the other hand, when it came to supposed `minorities’ there was a dilemma. How could one therefore suggest that education is not important in a highly sophisticated and technologically-driven world?
The fact that both Gates and Branson are engaged in vastly competitive industries, mean that a high level of administrative, managerial, technical and other sub-set of skills are required to make their companies viable. Even if both men lacked the necessary academic credentials in information technology and travel logistics - they have a core of specialists and practitioners who operate their companies, proof of which has been the millions both Microsoft and Virgin have generated over the past 10 or so years, along with the huge influence they wield in political and other circles, worldwide.
So, why is education important to business sustenance? Is it really needed to balance the books? It was once said that business is about 99% perspiration (meaning effort) and 1% inspiration (meaning ideas or brain power). It seems that `any way you slice it’, education is a necessity. In the case of a technology firm, knowledge of software programming, hardware processes and applications are all vital. Then there is the issue of managing technical resources and people, especially human behaviour and general attitudes to work. Money management is critical and any business owner knows that you cannot hire personnel without accounting and financial qualifications, as well as experience. The business also needs a qualified legal functionary to deal with regulatory and allied official issues that may affect the firm – directly or indirectly. Can personnel without education, function effectively in these important position of a firm, as mentioned above? Of course not!
What about a travel company? You need specialists in management, administration, marketing, corporate responsibility and other fields. Having extensive knowledge of the travel and tourism market is very crucial to market positioning. In every business sector, high-order skills are necessary to compete and stay in `contention’.
Unlike let’s say 30 years ago, more than 60% of all blue chip companies today have a cadre of well-equipped top brass and middle management staff too, followed by a lower tier of technically competent employees. Companies such as Marks & Spencer, Tesco, Easy Jet and co, can ill-afford to ignore the importance and relevance of well-trained staff. Education plays a vital part in business expansion. The product and services portfolio of businesses, coupled with their market share position, could be affected if staff do not have the requisite communication, strategic, managerial and technological skills to `meander their way’ in the market place of ideas and products. If the business is going international, language, diplomatic and other cognitive skills may be required. Without these essential skills, few firms can survive long enough, even if they are riding on the back of `Sir Fortune’ or `Lady Luck’.
Research shows that minority firm owners in Britain, Europe and North America are likely to have more qualified professionals running successful businesses than average mainstream firms. Education is a high premium for minorities; they recognise its (status) value in global terms. They recognise its impact on their firms’ standing in the marketplace. Customers usually have a positive attitude towards well-managed companies; they feel confident and are willing to trust guarantees of quality goods and services from companies that have highly motivated, customer-oriented and highly trained staff. Some are even willing to invest in shares depending on the stock market position of the particular firm.
In Britain, 25% of all entrepreneurs between the ages of 25 to 30 are qualified to Degree level and just fewer than 5% are qualified beyond First Degree, added to accreditation from professional bodies representing sectors as diverse as legal, financial, technology, health, consultancy etc.
Consequently, the `learning firm’ principle is applicable to the modern state of business affairs. Owners and senior managers should therefore, encourage employee development programs so that staff can improve their all-round professionalism. Firms that have employees with high levels of competencies in experience and skill mix are in a stronger position to increase profitability, customer base and enjoy a corresponding rise in market share. In short, education can make a real difference between the (future) success and failure of a business in the 21st century.