Are Entrepreneurs Born or Made?
As entrepreneurial education programs proliferate, one question has taken on some urgency: Are entrepreneurs a special breed, born with a drive that most people lack, or can they be created through education, training, and mentoring?
Are entrepreneurs a special breed, born with a drive that most people lack, or can they be created through education, training, and mentoring?
Thomas Bouchard, professor emeritus at the University of Minnesota, is perhaps best known for his studies of twins, particularly those reared apart. Bouchard’s work has spawned numerous studies of twins focused on various medical and psychological characteristics. The collective results of these studies were a bit of a surprise: Genetics play a larger role in personality than previously thought.
Brian Bullock was the eldest teenage child of a dad who owned his own drugstore. His father gave him the encouragement and opportunity to “own” a couple of product lines. He recalls a spinner rack of picture postcards that he managed by himself.
At his father’s suggestion, Bullock joined the Boy Scouts and attained the rank of Eagle Scout. The scoutmasters provided ample chances to develop his leadership skills. He has continued to serve in leadership on the local scout council and his son also became an Eagle Scout.
Bullock went to pharmacy school and took the risk of running for the Student National Pharmaceutical Association (he was elected president). His small team was involved in planning for a time horizon well beyond their terms in office. These experiences opened him to learning skills for the future. Even though he decided not to become a traditional pharmacist, he went back to his father’s pharmacies to gain experience. After earning his MBA, he was recruited for a new franchise concept being launched by FoxMeyer Drug. The concept was cancelled and he was moved to marketing, first in generic pharmaceuticals and later pharmacy benefit management.
Recruited for a senior position, he came to the Twin Cities. The pharmacy benefit landscape was rapidly changing, and he ran across an emerging opportunity in pharmacy benefit administrative services. That was the start of Burchfield Group.
Initially, he worked alone. With the increasing confidence in the business model, he took on employees and related obligations. The first big client, Kraft Foods, was final proof of the model but also brought stiff competition from multinational consulting firms.
Another pivotal moment came in 2006 when the federal government introduced new drug benefits under Medicare Part D. Blue Cross Blue Shield of North Carolina called seeking Burchfield’s expertise. The suite of services Burchfield offered BCBS was the rocket fuel that more than doubled their client base.
Rapid expansion is gratifying, but also creates organizational stress points. Myriad decisions had to be made rapidly: hiring new staff, standardizing work processes, filling leadership gaps, meeting customer challenges, etc. As an entrepreneur, Bullock had difficulty understanding his employees; they preferred the predictable and stable, and often waited for his direction. “Bringing them in alignment was like herding cats,” Bullock recalls.
With insufficient experience, he made poor hires, underestimated the effort required to coach people, and had misalignment between strategy and organizational structure. His ambitious growth goals did not materialize. The decline in revenue and profitability led to a cash and liquidity crisis that required layoffs and a personal loan with guarantees.
A fellow Scout board member, who is also a process guru, helped Bullock zero in on critical management concepts of transformation from an entrepreneurial organization to a well-managed growth firm. He hired a proficient CFO and brought in an outside consulting firm that specializes in implementing and supporting a management system known as EOS, which helps entrepreneurs manage their business. Burchfield brought in an outside facilitator to support implementation and adoption of proven processes and hired a proficient CFO. All the pruning and the new management team led to a 2017 with record-setting revenue and profitability. Progress did not go unnoticed by outsiders, and the company was sold to AON in January. Years of hard work and overcoming challenges had paid off.
Can Bullock’s success be attributed to genetics or personality development in early childhood, or to his innate abilities that were honed by training, work, and life experiences? What about psychological characteristics such as willingness to take a risk, as well as resilience and perseverance when things go sour? The answer is somewhere in the middle. Virtually every reputable scientist sees life as an interaction of heredity and environment.
We can provide a more satisfactory answer to my initial question if I break it into two parts. First: For a person’s propensity to start a business and to have the requisite personality traits, entrepreneurs are more often born. Second: When it comes to successful outcomes, entrepreneurs are more often made. That is how the complex interplay between nature and nurture works out.
This article first appeared in Twin City Business Magazine August, 2018.
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Dr. Rajiv Tandon is Executive Director of the Institute for Innovators and Entrepreneurs and an advocate for the future of entrepreneurship in Minnesota. He facilitates peer groups of Minnesota CEOs. He can be reached at firstname.lastname@example.org