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Opinion / Op-Ed Contributors

How successful entrepreneurs think

By Thomas Wing Yan Man (China Daily) Updated: 2012-01-05 08:05

Successful Chinese entrepreneurs are people who constantly examine their business operations from every angle. They pay attention to the finest details and agonize over past mistakes to avoid repeating them.

They are voracious learners: from textbooks as well as business mentors. They fastidiously study what their rivals are up to with a view to emulating the best practices.

Top Chinese entrepreneurs spend a lot of time listening to other people, too: to their customers and staff members, including those who have left the business. They do so to ascertain that they continue improving their business activities. These are some of the key characteristics identified in a new, in-depth study of the learning behaviors of a dozen Hong Kong entrepreneurs who have developed highly profitable companies.

The University of Nottingham Ningbo, China, conducted a research to develop a model of entrepreneurial learning. The average age of entrepreneurs included in the study was 45, about one-third of whom were women and most of them were university graduates.

Most of the entrepreneurs had built their businesses from scratch into organizations with at least 500 employees. At least one-third had more than 1,500 employees, one had as many as 5,000, and another headed a company that was listed on Hong Kong's stock exchange recently.

Three of the entrepreneurs were in the catering industry, one in book retailing, another in management consulting, while the others ran successful companies in the manufacturing sector, producing a range of items from clothes to electric motors.

Lengthy semi-structured interviews focused on critical incidents that were sources of learning for them. This theme was explored from the planning, launching and developing stages of a business through to day-to-day management. And the study cut to the heart of that perennial question on whether you can really learn to be a successful entrepreneur.

The findings lend weight to theories that people do indeed learn to become entrepreneurs and continually work to improve their entrepreneurial prowess through an active process of learning and reflection. The patterns that emerged in the study included: learning is a key characteristic of a successful entrepreneur, entrepreneurs are highly motivated to seek learning opportunities, and they learn selectively, and purposely and in depth.

Many who marvel at the success of the world's top businesspeople believe that successful entrepreneurship is largely a combination of growing up in an environment that provides opportunities to observe successful business operators, and street-smart intelligence and luck.

But it seems that some of China's best businesspeople turn to textbooks for advice. This is certainly the case for the high-flyers that were interviewed for the study. Successful entrepreneurs who formed part of the research actively participated in training courses and searched for management practices and ideas from others and from textbooks. They analyzed ways to apply certain management theories in their own businesses.

Not surprisingly, the work environment is a central element in the learning style of Chinese entrepreneurs. First-hand experience is critical to the learning process, which is selective, based on actual experience.

All the entrepreneurs involved in the study spend time carefully evaluating their own successes and failures to reinforce successful practices and avoid repeating mistakes. They make lots of efforts to understand every aspect of their business and its environment, too. They participate in daily management and acquire hands-on experience about business operations, rather than taking an investor's perspective. And they learn the technical details about the business.

In a nutshell, the study found that Chinese entrepreneurs are continuously improving their business activities by learning from their own actions as well as their competitors'.

Hong Kong was chosen as the city for the study partly because the entrepreneurs there are seen as highly educated and have particularly high expectations for growth. It was chosen for practical reasons, too, such as easier access to the principal researcher's network of personal connections. The objective of the research was to develop an empirically based model of entrepreneurial learning with focus on learning behaviors.

We have identified six main patterns of learning common to Chinese entrepreneurs: they actively seek learning opportunities, learn selectively and purposely, learn in depth, learn continuously, improve and reflect on their experiences, and transfer their learning into practices.

The practical implications of our findings among other is that education and training facilities for entrepreneurs should be situated at work or within simulated contexts that provide them with opportunities to apply what they have learnt.

The author is an associate professor of entrepreneurship and innovation at the University of Nottingham Ningbo, China's business school.

(China Daily 01/05/2012 page9)

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