Entrepreneurship

One of the FT columnists I enjoy reading is Luke Johnson, who writes on entrepreneurship. It's an indication of my own ignorance of the world he inhabits that I know him mostly as an FT columnist and as one of the partners in Pizza Express and that he's chairman of Channel 4, one of the UK's independent TV channels. So, this morning I decided to Google him, and discovered on the Wikipedia site http://en.wikipedia.org/wiki/Luke_Johnson_(businessman) that there is more to the history of this serial entrepreneur than I realized. Apparently, he took part in a BBC TV programme, 'Back to the Floor', in which executives go back to the shop floor to remind themselves of what it's like to work at operations level. Evidently, Johnson didn't distinguish himself in this role reversal, proving to be humourless, no good at any of the jobs (as waiter, receptionist, kitchen hand) and being pretty hopeless at listening to his staff's many problems.

Well, it could be argued (and no doubt Johnson would do so) that entrepreneurs don't need to have domain knowledge or be good at listening to staff or be skilled at operations management, since the role of and expertise required by an entrepreneur are of a different order. What, then, are the characteristics of an entrepreneur? Well, according to Johnson, they aren't those outlined by New Yorker magazine journalist, Malcolm Gladwell (he of The Tipping Point).

[http://www.ft.com/cms/s/0/b1b8c3d8-1035-11df-841f-00144feab49a.html]

Counter intuitively, Gladwell asserts that entrepreneurs are risk averse. According to Johnson, this is rubbish. He points out that 'The launch of BSkyB, perhaps the most lucrative media project of our time, was fraught with danger and almost bankrupted News Corp. Similarly, the launches of the iPod and iPhone by Apple were both high-risk strategies and might have flopped.' And he goes on to say that 'We remember the winners but forget the hundreds of losers – they all appeared to be “sure things” at the time.'

Johnson especially takes to task Gladwell's touting of John Paulson as the archetypal entrepreneur who only bets when he can[t lose. (Paulson is the massively successful hedge fund manager who in essence shorted US housing mortgages.) However, Johnson points out that Paulson 's not an entrepreneur: ‘he is a Wall Street financier who takes short-term speculations, mainly, it seems, using derivatives – gambling with paper on paper'. Johnson goes on to make the point that 'Entrepreneurs, on the other hand, build real companies that employ people and generate value for an economy. They do not amass riches through the misery of others; they create wealth and jobs, and make the capitalist system work.' In fact, Johnson believes that the distinction between the kind of gambler represented by Paulson and the values represented by the entrepreneur is both a moral as well as a philosophical issue. 'To me, Mr Paulson and others like him are the opposite of heroic – they are in essence parasitical'.

It is difficult not to agree with this last point, particularly in the light of the 'business as usual' practices of the banks in the wake of the economic melt down and bail out by governments and, ultimately, the tax payer. The failure of the banks to mend their ways, and the 'poverty of action' to reform the banking system is the subject of a pretty swingeing article by Will Hutton in Sunday's 'Observer': [http://www.guardian.co.uk/commentisfree/2010/jun/13/will-hutton-banks-crash-refuse-reform]
Basically, 'our banking system is as disconnected from real wealth generation as ever'.

Now, where does this connect with ELT? Firstly, I wonder how many real entrepreneurs there are in the sector. Historically, there are some, such as John Haycraft, who, with his wife, founded IH and who, importantly, recognized the need for initial teacher training. And there will be others -- Frank Bell comes to mind and his status as founder of the Bell Educational Trust is given prominence on their web site, in great contrast to Pilgrims and CfBT, who, in neither case, refer to the individuals instrumental in their foundation . In fact, it would be interesting to try to make a list of ELT entrepreneurs. I suspect that few contemporary ones will actually be found in ELT as such, but are more likely to be discovered in educational enterprises, such as Navitas, whose founders, Rod Jones and Peter Larsen, 'identified a need for a different kind of pathway into university in Australia', developing an educational business which, in 2009, had 'had over 30,000 students a year studying in its network of colleges and campuses across seven countries. It had cemented its place as Australia’s largest private education provider.' [ http://www.navitas.com/company_history.html]

Much of the management carried out in the typical LTO doesn't involve entrepreneurship, and it calls for a range of skills which don't appear to be part of the skill set of the entrepreneur. Even so, any sector needs its entrepreneurs if it is to develop and avoid becoming moribund. When one surveys what is on offer by the majority of Language Teaching Organizations (LTOs), there seems to be little indication of significant innovation or of significant entrepreneurship, both of which may be critical in the economically challenging times which now confront us. Or maybe I'm wrong?