In 1954, a milkshake machine salesman named Ray Kroc negotiated a deal with the McDonald brothers to take their restaurant concept national. In the first franchise, opened near Kroc's home in Chicago, he and partner Art Jacobs attempted to perfect important aspects of the McDonald brothers' operation. Although the restaurant made money from the start, the new owners encountered a significant problem: they could not duplicate the unique McDonald's french fry.
After extensive trial and error, the fries in the experimental restaurant were still turning out mushy. The idea of a national restaurant chain was based on repeating the McDonald brothers' standards for taste and quality, but Kroc could not even duplicate these qualities in the first restaurant.
Kroc tried everything. Finally, frustrated and nearing the end of his patience, he contacted the experts at the Potato and Onion Association and explained his problem.
Through testing and rigorous problem solving, they finally discovered that in California, the McDonald brothers stored their potatoes in chicken-wire bins located within a shaded garage outside of their restaurant. Without knowing it, the McDonalds had created a natural curing process that allowed the desert breeze to blow over the potatoes, drying them out and transforming the sugars to starch. With the help of the people from the Potato and Onion Association, Kroc devised a curing system of his own.
The rest is fast food restaurant history. In just 22 years, from 1954 to 1976, McDonald's surpassed 1 billion dollars in total revenue.
While this story may sound simplistic - after all, it is about duplicating fries - it reflects this article's key idea: outstanding entrepreneurs are driven by compelling visions and learning, and the creative capacity to acquire and use information is instrumental to business success.
Kroc used problem solving, questioning, reading, thinking, listening, and experts to solve the french fry dilemma. It was a process of self-directed learning, or learning from experience, and team problem solving - clearly a best practice model in adult and organizational learning.
So what else can we learn about how entrepreneurs learn? After reviewing more than 30 autobiographies and biographies of world-class entrepreneurs and business leaders, I found that there are similar patterns to both what they learn and how they learn it. This article presents common themes in entrepreneurial learning, a key ingredient in the recipe for business success.
What entrepreneurs learn
Entrepreneurs exemplify nine common areas of learning content: acquiring business-specific knowledge; learning business mechanics; learning about context, customers, and the competition; studying people; studying leadership principles; reflecting on company values; and discovering how to create learning organizations.
1| Acquiring business-specific knowledge. Take a moment to think of a statement or word that describes your business: for example, aviation, coffee, computers, golf, diamonds, oil, insurance, or real estate. Now ask yourself if you know enough about the word. If you answer no, you have already pinpointed a gap in your business knowledge. Would you open a quilting store if you had never picked up a knitting needle or a golf store if you knew nothing about golf? All entrepreneurs know their "stuff" - their main content area.
One day, 12-year-old Henry Ford and his father were walking along a dusty road near their farm in Michigan when young Ford saw his first steam engine. He was captivated and developed what became a lifelong passion for engines and automobiles. Ford started a shop in a garage on his father's farm, studied for a machinist's trade, read everything pertaining to the emerging field of automobiles, and built his own prototypes from scratch. Through continuous learning, Ford acquired vast knowledge of engines and automobiles. This business-specific knowledge was instrumental in the success of his company.
2| Learning business mechanics. Surprising as it may seem, many entrepreneurs do not have business degrees. They are usually people who are passionate about something. For example, Berry Gordy transformed a passion for music into Motown Records, and Greg Norman used his love and commitment for the game of golf in the business of golf course design.
By developing their passions into viable businesses, entrepreneurs have to learn business fundamentals such as finance, marketing, infrastructure, operations, human resources, and corporate law and government. While entrepreneurs usually begin by following a passion, somewhere along the line they take conscious steps to learn the fundamentals of business.
3| Learning about context. Sam Walton was a great entrepreneur because of his ability to see the relationship between social context and his business. He also fostered this awareness in his associates and managers. He said that they had to pay attention to the fact that a product such as moon pies could sell like hot cakes in one part of the country, but not move at all in another part of the country.
4| Learning about customers. While successful entrepreneurs study the socioeconomic context of their businesses, they also take time to learn about their customers. Maybe they do this on a micro level, by being on the front lines and talking to customers as they come through the door. Perhaps they learn about customers on a macro level, as in the case of L.L. Bean, who had his people go to great lengths to discover who their customers were and what preferences they had for products.
5| Learning about competition. In the early days of Ford Motors, Ford and his people would buy one of each new car produced by competing companies and pull it apart to see if there was anything new to learn or duplicate. Similarly, Sam Walton made it a habit to visit every retail competitor possible to study their business. He was unabashed about taking notes or even using a hand-held tape recorder to interview clerks. Many of the best ideas instituted by Wal-Mart came from Sam's study of what other retailers were doing.
6| Studying people. Entrepreneurs study people both inside and outside of their companies. For example, Debbie Fields, president of Mrs. Fields' Cookies, says that while checking out at a PayLess drugstore, she encountered a cashier who was naturally engaging and friendly to customers. Fields offered the lady a job on the spot because she had the exact attitude Fields wanted in her employees. She said that if the woman could be that spontaneously friendly adding up items in a checkout line, Debbie could teach her all she needed to be successful in the cookie business. The woman became one of Debbie's first managers. Simply put, entrepreneurs study people to ensure they have the quality of knowledge, passion, commitment, and personality needed in their business.
7| Studying leadership principles. Business leaders study leadership books and articles, talk with others, and reflect on leadership and management practices. David Packard says that the concept of Management by Walking Around (MBWA) came from his experiences working on mercury-vapor rectifier tubes at General Electric prior to starting Hewlett Packard. He found that the instructions from engineers were not being communicated properly to the manufacturing department. He concluded that instructions and designs had to be followed up with regular visits with folks actually making the tubes. Consequently, MBWA became a key management practice at HP.
8| Reflecting on company values. Ron Joyce says that as he built up the Tim Hortons donut chain in Canada, he continually thought about what the company stood for. Eventually the concept of "freshness" stood out as the single core value of the company. The phrase, "Always fresh at Tim Hortons" represents the quality and freshness of products, the cleanliness of the individual restaurants and employees, the new ideas for products, and the overall tone in each store. Entrepreneurs think about what values their company stands for, a form of reflective learning.
9| Learning how to create learning systems. Finally, entrepreneurs learn how to create learning systems in their organizations. In other words, they become teachers. Tom Watson, Sr. was one of the first to master this aspect of corporate training and leadership development. He established the IBM schoolhouse on the IBM grounds in the 1920s and 1930s. He wanted to forge the future for sales officers of the company and spent time with each group. Watson talked a great deal about self-improvement and used stories from his own experiences to communicate important lessons. Engraved in the granite of the IBM corporate schoolhouse lobby were the words: "think," "observe," "discuss," "listen," and "read." Watson was passionate about learning, shaping his sales force, and teaching.
How entrepreneurs learn
Entrepreneurs break the mold of traditional learning and education. They create highly efficient ways to acquire the knowledge and information they need to develop their business and realize their compelling vision. In my study of 30 world-class entrepreneurs, I found seven common learning processes: learning through experience, learning from others, self-directed learning, reading, conversation, team learning, and critical self-reflection.
1| Learning through experience. Entrepreneurs have an orientation to both ideas and action: they are thinkers and doers. They take action, have experiences, and learn from those experiences.
Richard Branson in the early days of the Virgin Corporation provides a good example of experiential learning. Whether starting a magazine, record company, or airline, Branson had ideas, studied the playing field, took action, and learned from successes and failures along each step of the way.
2| Learning from others. Entrepreneurs also have the ability to be taught; that is, they learn from others, including mentors, models, and teachers. They can learn from formal teachers, as David Packard did by taking two masters-level courses in taxation and business law at Stanford University.
They also learn from less formal teachers. For example, after World War II, Tom Watson, Jr. decided to join the company his father had built, IBM. At the time, Watson, Sr. had a right-hand man named Charlie Kirk, who was basically running the operations of IBM. The plan was for the younger Watson to learn the business from Charlie. So, Tom pulled a chair up beside Charlie's massive desk, and for six months watched him run a multibillion dollar company.
3| Self-directed learning. In self-directed learning, the control of the learning is in the hands of the learner. A self-directed learner determines both the direction and design of his own learning.
Sam Walton is a prototypical self-directed learner. From 1943 to 1945, Walton was stationed with the U.S. Army in Utah. Having some previous experience as a J.C. Penney management trainee, Walton decided to immerse himself in a self-directed study of retail. He started going to the library, where he pored through magazines and checked out every book on retailing he could find. In his off-duty hours, he studied ZCMI, the Mormon Church's department store. From 1945 to 1950, Walton was able to apply this learning while running his first Ben Franklin store, and later he continued to be a self-directed lifelong learner while building Wal-Mart.
4| Reading. Entrepreneurs learn and acquire ideas through reading, including reviewing internal documents such as summary reports. Kevin Liles studied Broadcast Data System reports every morning in his early days at Def Jam records. The reports told him what artists were being played and by which radio stations.
Entrepreneurs also read magazines, trade journals, newspapers, government reports, books, and management literature. While internal reading provides a pulse of the organization, outside reading provides new ideas and relevant information.
5| Conversation. A fifth learning process exemplified by entrepreneurs is the ability to acquire and use information through conversation, or what I call QLT: questioning, listening, and talking.
During his days at GE, Jack Welch was an expert at learning through QLT. He and several members of his management team would visit places in the field and spend hours locked in a room, talking with managers. Welch referred to QLT as "peeling back the onion" to surface issues. As he continually talked with people and captured their thinking, he learned a great deal about the inner workings of the company.
6| Team learning. Entrepreneurs are creative and very independent. They have strong opinions and strong ideas about what they want to accomplish. Yet, at some point they realize that many things are best done in teams.
When Kroc enlisted the help of the Potato and Onion Association to reproduce the McDonald's brothers' french fries, that was a good example of team learning. We also see a classic example of team learning in the early days of HP, as David Packard and Bill Hewlett took numerous projects for which they did not have the expertise. What they did have, however, was an excellent network of people with a diversity of skill and knowledge sets that they could draw upon to complete projects.
7| Critical self-reflection. Critical self-reflection (CSR) is a process by which entrepreneurs learn about themselves. On one level, CSR has to do with simply recognizing one's strengths and weaknesses. On another level, it has to do with deeper self-reflection about our language, thinking, emotions, and how we have been shaped by early life experience.
CSR puts us in touch with those taken-for-granted ideas, habits, and behaviors we have acquired over the years that need to be put under the microscope. An example of CSR regarding words and language is seen in entrepreneurs like Andrew Carnegie and Benjamin Franklin. Both men explain how they learned to be cautious of using definitive terms such as "always" and "never," preferring instead terms such as "usually" and "seldom."
The nine learning "whats" and seven learning "hows" described in this article comprise a list of 16 strategies for entrepreneurial learning. Great entrepreneurs are highly efficient learners. They are models to be studied by others who are compelled to achieve an entrepreneurial vision. t+d