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Where Is The Best Place To Learn How To Become A Successful Entrepreneur?

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This article is more than 7 years old.

What do Meg Whitman (former CEO of eBay), James McNerny (former CEO 3M and Boeing), Scott Cook (founder Intuit), Jeff Immelt (CEO of GE), Steve Case (cofounder of AOL), and Steve Ballmer (former CEO of Microsoft) all have in common? Besides transforming entrepreneurial enterprises into some of the world’s biggest companies, they all spent their formative careers at Procter and Gamble. Tell this to a business school student and they will likely be shocked. For many, the assumption is that to become a great entrepreneur, one must start at a small company; large blue-chip companies represent the opposite of fast, lean, innovative, and entrepreneurial. At face value, any company that has successfully survived for over 100 years must have the ability to adapt, but yet, the perception is that one can’t possibly learn entrepreneurship (just another word for successful business building) from a big company. As Steve Case says in his book, Third Wave: “The people I worked with (at P&G) were experts in understanding consumer preferences, doggedly pursuing R&D, and seeking breakthroughs that could give their products an edge against the competition.”

I recently had a conversation with a former research assistant who is now in brand management at a leading consumer packaged goods (CPG) firm (because of her firm's policies, her name can't be disclosed). She argued, in a quite convincing manner, why MBA students and prospective employees should rethink the type of companies that can best prepare them to be a successful entrepreneur. She suggested that if you consider any firm that survives beyond the startup moniker to become a successful, enduring enterprise, you typically find former CPG employees in the upper echelons. As we talked, I captured six key reasons why CPG firms shouldn't be ignored when considering a future in entrepreneurship.

Six Reasons To Learn Entrepreneurship At A CPG firm

1. The best place to learn how to create, build, evolve, and maintain a business …. is at one that is really good at doing it. It’s a bit of a non-sequitur to think that going to a startup should provide a better opportunity to learn how to create a business than at a company that has done this for decades. At a General Mills or Johnson and Johnson or E&J Gallo or Campbell’s, these companies have recorded case studies of successes and failures. They have data and experience and knowledge and skill associated with starting new businesses, building them, and yes, failing. People tend to think that small firms are strikingly different than big firms. They forget that big companies were once small and in fact, perhaps the best place to learn how to become big is from one that has had success doing it.

2. CPG companies provide the perfect training environment that develops an entrepreneur’s ability to develop and pitch ideas. In order to sustain a competitive edge in the marketplace, marketers are constantly innovating new ideas and pitching them to the organization. In CPG firms, marketers pitch to a wide range of stakeholders, including leadership teams, cross-functional teams, customers, agencies, etc. Importantly, these pitches are made to very experienced and talented individuals. One day, you may be sharing an idea with a plant manager who has been at the company for 30 years. The next, you are pitching to an executive from a leading ad agency who has worked on 25 award-winning campaigns. You become better not just because you get to practice—but because you are pitching to the best of the best who are challenging, and honing, your thinking. This is a tremendous learning opportunity that teaches the brand owner to understand the different priorities of stakeholders while mastering the power of persuasion and influence.

3. CPG companies encourage and reward smart risk taking. Despite being misperceived as risk averse and conservative, CPG firms, having developed a competency in being able to assess the risk-reward payoff, often do take many calculated risks. The key here is that they take calculated, reasoned, and considered risk. They don't emotionally follow an exciting idea down the rabbit hole. Rather, they thoughtfully choose the risks that they take. Additionally, these companies are adept at mitigating risks when encountered and moving on from failures quickly. Developing an ability to identify risks, assess whether they are worth taking, plan for the downside, and mitigate damage when failure occurs helps prepare those who start firms in the future for success.

4. CPG firms are innovative in ways beyond creating a new product. Many CPG firms have survived for over a century (e.g., General Mills, Unilever, Colgate-Palmolive, Coca-Cola, Pepsico, etc.); a critical competency these firms have mastered, which has enabled them to thrive over a long period of time, is the ability to innovate across a number of dimensions —engineer new processes (e.g., how to get to market faster), optimize structure (e.g., new organizational structures that streamline decision making), create new ways to enhance the customer’s experience, design new packaging (e.g., deliver a more pourable bottle while reducing cost and increasing shelf presence), create new ways of selling product (e.g., scratch and sniff print ads), create new ways for measuring employee performance, create new methods for establishing trial (e.g., in-store demonstrations), etc. In comparison to startups, where the focus is on a single business idea, CPG firms have had to invent an agile environment where marketers are constantly stepping up to identify innovative solutions across a number of business problems that extend far beyond just the product. And successful businesses require a much broader ability to engineer and apply innovative thinking.

5. CPG companies offer an extensive network of talented leaders from around the world. Working at large companies with talent across every function enables employees to establish a strong network that becomes an extremely valuable asset once an individual leaves a large company. Having a well-connected CPG network is as good as having a strong business unit that follows you. What better way to create your own startup than to start with a strong business network?

6. What if your first job doesn't work out? I recently received a call from a student who had graduated a few years ago. She wanted to be an entrepreneur upon graduation and went down that path. She had worked for a few, startup companies, and was unhappy. She now realized that she wanted to go to an established, stable, academy-training company that could help her gain the skills to be a future C-level leader. The problem was that you only leave your MBA program once. Your first job sets you on a trajectory. Some career paths provide more options down the road (and some less). The general rule is that you go from big to small companies, public to private, etc. It is very difficult to have chosen an entrepreneurial path out of school and then be hired later at an established, academy-like company. Because respected CPG firms (and financial services, retail, etc.) have a reputation for developing terrific leaders, training from these firms opens more doors. If you begin your career at a very small, startup, it defines your launching pad. On one hand, you could be the 6th employee of eBay. However, on the other hand, if you choose one of the 96% of businesses that fail within the first 10 years, how does that choice impact your future options?

Look at the recently published list that ranks the companies that produce the best leaders. They are filled with CPG firms. Because of the superior training that has been refined over decades, leaders from these companies have unparalleled knowledge and experience that enable aspiring business owners to learn not just about marketing and general management, but how to engineer the systems and processes that are the backbone of a successful company. What is the methodology that enables you to discern which candidate is best for a particular role? How do you create a reward structure that motivates people to develop—rather than stifle—subordinate growth? How do you engineer a system where people working on Pampers around the globe all understand what the brand stands for—and consistently deliver it? Building a great company requires a lot more than a great product.

While there are many different paths to entrepreneurial success, one path that often seems to be overlooked is through a company that has historically been great at creating, building, evolving, and managing successful businesses and brands. The benefit is that you get to work in a training academy that enables you to fully experience how a once small enterprise became successful--and continues to succeed. What better learning experience can you ask for?

Join the Discussion: @KimWhitler

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