Does a business owner need to understand business to manage and grow that business? I mean more than just their business, but business principles and foundations in general. Can you make a successful business and not really know business? I ask students this question every semester. Students are trained to answer “Of course not – education is critical to success” and “how can we build/run a business through ignorance” and such. How can anyone succeed without a degree? We have trained the students to respond to what the professors want to hear very well.
I am here to say that the need for business knowledge for business success is nonsense. There are plenty of examples of successful businesses run by people who know nothing of business. This may be due to a real special product or service, an opportune time and place in the market, or a really good advisor or collaborator. Oftentimes, success is just pure good luck – success by chance. Unfortunately, some of these “successful” people write successful advice books or even take academic positions to teach their war stories (I have been subjected to some of these).
Well, I don’t know about you, but I am uncomfortable operating at chance levels. And the chances of long-term survival (much less trans-generational succession) diminishes with each passing day. After all, the natural state of order is chaos, not continued operational success.
Do not take this to suggest that your success is due to chance or pure dumb luck. In fact, your success comes from a lot of hard work and intelligence (or street smarts). Many also have some form of advanced degree – including MBAs. Any many business owners just know some things, but do not have a framework to make sense of that knowledge.
Without knowing and understanding business, you may not know what is working for you and what may be putting you at risk. Ignorance is not bliss, and your stakeholders do not accept lack of knowledge as an acceptable excuse. Without knowing about and building a business foundation, any turn of any kind may throw you off and sink your business. And without an entrepreneurial mindset and related competencies, we may in fact be playing dice with our business.
This is why we emphasize the UNDERSTAND aspects at Impact Capitalist. Understanding business foundations will help you with strategic planning. But it can also help you create protective moats for when inevitable negative events occur. Critical thinking and understanding how to think about situations will offer new insights to solutions and consequences. Issues and crisis management/planning is critical. Knowing how to think in systems will help you explore potentially unintended consequences. Impact Capitalist strives to develop material to help you along your righteous path.