A Half-Century of Teaching Entrepreneurship

by Jeffrey L. Cruikshank

Can entrepreneurship be taught?

If so, should it be treated as a specialized interest within a broader MBA curriculum?

Or should it be at the very heart of the curriculum?

These are questions with which the Harvard Business School has been wrestling for at least a half-century.

Over time, answers to these questions have cropped up many places. One place is the second year of the MBA Program, where an elective course, first called Management of Small Enterprises (MSE), has consistently immersed students in the perils and prizes of entrepreneurship since 1947.

Myles Mace

It was the brainchild of Myles L. Mace, who began teaching at HBS in 1938. Upon returning to Harvard after World War II—during which he had been struck by the number of GIs who hoped to start their own businesses—Mace proposed a second-year course focused on starting a small business. "Fine," said Dean Donald K. David, worried about course offerings for an unexpectedly large second-year class. "Go ahead."

Mace's course, which enjoyed high enrollments from the start, was the first to explicitly lay claim to the field of new businesses. But Professor Georges F. Doriot's Manufacturing class had been dealing with entrepreneurial issues since 1937. Although Doriot avoided the term "entrepreneurship," his course proved a breeding ground for entrepreneurs (see related story below).

Frank Tucker

By the late 1950s, student interest in entrepreneurship remained high, but faculty interest was flagging. Clearly, entrepreneurship at HBS needed a new champion. That champion emerged in the person of Professor Frank L. Tucker. Tucker was hired in 1957 for his strong finance background and worked in that area during his first several years at the School. Gradually, however, he gravitated toward entrepreneurship. Involved in several small-business trade associations then holding seminars at the School, Tucker was soon coordinating these events.

Within a few years, Tucker's moonlighting went mainstream. In 1963, he took over Management of New Enterprises (the successor to MSE). Over the next six years, enrollments rose steadily. Tucker benefited from good economic times, which gave his students the courage to contemplate entrepreneurship. But Tucker also was a tireless promoter of his adopted field. He counseled students on entrepreneurial challenges, proselytized among his faculty colleagues, and advised the student entrepreneurship club. With Professor A. Richard Dooley, moreover, he pushed to create an executive program addressing the concerns of small business presidents and owners. Eventually convened in 1972 as the Smaller Company Management Program (and today known as the Owner/ President Management Program, or OPM), this initiative has since benefited thousands of entrepreneurs.

For all these reasons, Tucker's 1972 retirement came as a blow. Once again, the perils of relying on a single individual to carry a subject were underscored. Meanwhile, student interest in entrepreneurship was increasing. (A 1970 Student Association survey, for example, showed that 70 percent of first-year students planned a career in small businesses!) But it had been decades since a new course in entrepreneurship had been added to the curriculum, and now—despite overwhelming student interest—the entrepreneurship curriculum was again at risk.

Into this breach stepped a young assistant professor named Patrick R. Liles, who sparked a revolution in the entrepreneurship elective. Over time, Mace's course had drifted, becoming focused on the operational challenges of small businesses. Sidestepping the hurdles associated with launching a new course, Liles simply added a tag line to the end of the course name—Starting New Ventures—and initiated a fundamental change in the face of entrepreneurship at HBS.

Patrick Liles

Liles's focus was dealmaking. He cast transactions as the driver that moved the entrepreneurial process forward, emphasizing valuation, negotiation, and so on. This was an approach that students found novel and compelling. Although Liles enjoyed significant success in terms of both enrollments and rankings, he stayed with the course for only three years. His departure from the field underscored a long-standing faculty maxim: Teaching entrepreneurship was a dead end.

This deserves explanation. In academia, promotions are won through research, as well as teaching. But effective research needs a context—a supportive constellation of intellectual peers, refereed journals, colloquiums, and conferences. This framework simply didn't exist in the field of entrepreneurship. As a result, talented young academics with an interest in entrepreneurship usually placed their bets on more established academic fields.

So innovations in entrepreneurship continued to come out of left field. In 1967, for example, a real estate course called Urban Land Development, taught by Professor Phil David, first appeared in the course catalog. It was an immediate success and, despite its seemingly marginal role in an MBA curriculum, enjoyed increased enrollments every year. Why? Because David was a skillful teacher who focused on real estate deals in a comprehensive way. Students enjoyed dealing with problems that were big enough to wrestle with, but small enough to get their arms around.

In 1972, David passed the torch to Howard H. Stevenson, a young assistant professor. Only three years out of the HBS doctoral program, Stevenson was hardly a real estate expert. But he recruited William J. Poorvu, a local real estate developer and entrepreneur, and together they redeveloped the course, naming it Real Property Asset Management.

This course (along with a seminar added the following semester) was a direct precursor of the current HBS entrepreneurship courses. It offered a systematic and integrated framework to explain the dynamics of an industry. Students in the class examined every significant aspect of a real estate venture: the people, their incentives and past history, the environmental and regulatory context, the available resources, and the property.

The approach was successful, but in 1978, Stevenson, who worried that entrepreneurship would always be an academic stepchild, left HBS. Under Poorvu's leadership, real estate continued in its popular ways, but the broader field of entrepreneurship again floundered. From 1979 until 1983, only two entrepreneurship courses were available, and all too often these were listed in the course catalog as "Instructor TBA."

But people were working behind the scenes to revive the struggling field. A turning point came in 1980, when Harvard President Derek Bok named John H. McArthur the School's Dean. Having made the case to Bok that HBS needed to focus more on entrepreneurship, McArthur was soon leading the School in that direction. One of his first steps was to recruit Howard Stevenson back into the fold, promising him his full support.

Howard Stevenson

Upon his return, Stevenson decided to begin with a clean slate. Why? He felt that until entrepreneurship had the benefit of a systematic and compelling framework, it would remain impossible to research and teach.

Reinvention was needed. In the end, Stevenson, along with a small cadre of colleagues, came up with a substantially new vision. Entrepreneurship, he argued, should be understood as a management approach, rather than an innate person-ality trait or instinct. Stevenson described a set of behaviors that helped define the entrepreneurial manager, including the tendency to seek out opportunities, a willingness to act quickly, an ability to negotiate a multistaged commitment of resources, a skillful use of resources, and an interest in building a network rather than a hierarchy.

It was a subtle but profound shift: Entrepreneurship consisted of educable skills and attitudes, and therefore could be both researched and taught. Just as important, entrepreneurship was as applicable in larger, more mature companies as it was in start-ups.

Working within this framework, Stevenson designed a new second-year course called Entrepreneurial Management. First offered in fall 1983, it drew heavily on his prior conceptual work, and also on the model of the earlier real estate courses. Students flocked to the elective in large numbers.

Other faculty members, notably William A. Sahlman, developed additional aspects of entrepreneurial theory, and offered new courses based on those advances. Again, these courses were extremely popular with students. (Entrepreneurial Finance, Sahlman's offering, was heavily oversubscribed every time it was offered.) In addition to a stronger conceptual base, two other factors helped "grow" entrepreneurship at HBS in the 1990s. The first was strong support from Dean Kim B. Clark, who made it clear that he believed strongly that the managers of the 21st century would have to be increasingly entrepreneurial. The second was an unprecedented economic boom, which once again heightened student interest in all things entrepreneurial.

All of this growth has been reflected in faculty numbers as well as course offerings. For many years a neighborhood of only one or two people, the entrepreneurship faculty, grouped as the Entrepreneurial Management unit in 1996 (and now called the Entrepreneurial and Service Management unit), has grown to more than two dozen. Throughout the 1990s, numerous entrepreneurial courses were added to the elective curriculum, while The Entrepreneurial Manager became a required course in 2000 (see related story). But just as important, former area head Stevenson and current heads Bill Sahlman and Myra M. Hart have labored to build bridges to other faculty groups, serve on doctoral committees, and "seed" their ideas on campuses around the world. Thus they are building for the future.

What is the future? All academic fields wax and wane over time, and entrepreneurship won't be immune to these cycles. But history also tells us that once a set of useful and powerful ideas permeates the MBA curriculum, those ideas tend to persist over the long run, influencing, and being influenced by, other good ideas. By that measure, entrepreneurship at HBS has worked its way to the core, and is destined to endure.

NB

Click here to view timeline, A Half-Century of Teaching Entrepreneurship

Jeffrey L. Cruikshank is the president of The Cruikshank Company, a Milton, MA-based communications consulting firm, and the author or coauthor of several business-related books, including A Delicate Experiment: The Harvard Business School 1908-1945.

Photos drawn from the Archives Photograph Collection, Harvard Business School Archives

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One Student's Odyssey

Having signed up for Professor Georges Doriot's Manufacturing course because of a genuine interest in manufacturing, John Diebold (MBA '51) was surprised and motivated by the professor's offbeat lectures. He was particularly inspired by one of the course's central components, the team report. Diebold realized it gave him the chance to follow up on his ideas about "automatic factories" that he had developed as a midshipman in the Merchant Marine during World War II. His ship's antiaircraft fire control mechanisms employed crude self-correcting devices. "I kept thinking," he recalls, "if we can build tools and if we have automatic antiaircraft fire control, why can't we have an automatic factory?"

John Diebold

Doriot suggested that Diebold create (on paper) a factory that would build a specific product. In their report, "Making the Automatic Factory a Reality," Diebold and his team of classmates explored how new and growing technologies could help (or hinder) the mechanization of industrial functions. They even proposed that a central computer could control all of the automatic machines.

Diebold began using a word that captured his central concepts: "automation." "People say I coined this word," he says, "but I don't claim to have invented the word, just the use of it."

After graduation, Diebold took a job with a major New York-based management consulting firm. He devoted much of his energy to persuading clients to computerize. "I was too early," he says. "It was before the first computer was installed for business use." The firm fired him twice, ordering him to give up on his obsession with computers and automation. He didn't. When he was fired a third time, he decided to strike out on his own.

Professor Georges Doriot

Diebold's book, Automation, was published in 1952. (It was dedicated to Georges Doriot.) Besides shedding light on the computer revolution, then barely out of its infancy, the book addressed the problems of integrating computers into nearly all aspects of a business. An enormously influential work, Automation was reissued as a "management classic" on its 30th anniversary, and celebrated again on its 40th.

General Electric booted up the first full-scale computer system for a business in April 1954—the same month that Diebold founded his own consulting firm, John Diebold & Associates, in his hometown of Weehawken, New Jersey. Although the firm's first jobs concerned automatic machine tool control, the number of clients stumped by computer applications in business began to rise swiftly. Diebold was the industry expert in a brand-new industry.

In the nearly 50 years since then, Diebold has consulted for companies such as AT&T, IBM, and Xerox; for cities such as Chicago and New York; and for countries such as Venezuela and Jordan. In 1967, he started John Diebold Inc., an investment firm that backed a number of ventures, including a computer leasing company and an enterprise that distributed software across Europe.

Diebold has always admired the dogged pursuit of a new idea. "You encounter roadblocks," he admits, "and you simply have to have a very hard skin—you have to keep doing it." And he doesn't much mind being thought of as a "rock-throwing, bomb-throwing revolutionary" by colleagues and competitors alike. "You know," he concludes, "you get shot at, running revolutions."

Excerpted from The Rule Breakers by Jeffrey L. Cruikshank, scheduled for publication in 2002; with permission of the author.

Photos drawn from the Archives Photograph Collection, Harvard Business School Archives

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