posted: June 19, 2021
tl;dr: Keep your eyes open in a small company, ask questions, dive in and do stuff, and you can learn a lot about business...
My kids are now at the stage where they are learning about the world of business through on-the-job training and real-world experiences in small companies. It’s satisfying for me to see them acquire business skills this way, because it is the same way that I did. Yes, there are plenty of colleges that teach business and award degrees, both at the undergraduate and graduate levels. I eventually went to one of them. But you can also get a thorough, practical business education while working, if you’re in the right environment and you take initiative.
The right environment for many people, in my opinion, is a small business, which is why I recommend starting off in a startup or established small company. In a small company, it is much easier to get exposed to all the different functional areas of the company, and, more importantly, the people in those areas. Those people can teach some valuable lessons.
For young people who want to learn how a business works, I recommend following the money. Where does the money come from? Where does it go? Talk to the accountants. They are usually thrilled to have someone come talk to them about something other than a specific accounting problem. Ask them to explain the latest financial statements or other financial reports. Talk to the people in the other areas of the business, and learn what they do. Try to meet with the salespeople and customers, to see what is important to them. Then see how the company delivers its solutions to those customers.
Small companies tend to have a tighter-knit, more personalized company culture. Quite often people have to perform multiple roles. The more experienced people will often be willing to train others to do aspects of their jobs, to free themselves up for other tasks, and to provide some redundancy for the business. In centuries past, formal apprenticeship programs were more common in the United States, and they are still prevalent, I’m told, in countries such as Germany. Today we tend to use the word “mentorship” rather than “apprenticeship”, and there’s not the same multi-year obligation as the apprenticeship programs of the past. Another more modern term that covers the same basic concept is “on-the-job training”.
What these terms all fundamentally mean is a more experienced person showing a less experienced person how to perform work tasks. It’s a great way to instill knowledge, and can be much more effective than a classroom environment. I’m at the stage in my career where I especially enjoy training younger folks how to do things. It gives me a sense of satisfaction to know that I am passing along knowledge and helping others learn. It also can offload me from being the only person who knows how to do certain tasks, which frees me up for other assignments.
Starting a new small company is another great way to learn about business. Many of these lessons will be learned the hard way, but because the stakes are smaller, it's easier and faster to recover from missteps. In any small business, it becomes quite apparent that the most important aspect of the business is customers. All businesses make money by delivering something of so much value to customers that they pay you more than the costs of the product or service you are delivering. Anyone who starts a new business will need to figure this out pretty quickly.
In mid-career, after I had already been in the professional workforce for 15 years and worked for several small companies, I had the opportunity to do an executive education program at the Harvard Business School (HBS). The HBS program felt much like finishing school to me. I had already worked in and alongside many of the subject areas we discussed in class: technology, operations, marketing, accounting, etc. Certainly I learned some new techniques and was exposed to new situations and problems, especially given that HBS uses the case method. But there was little that was brand new to me, or that I hadn’t at least heard of before. The other people in the program also were experienced businesspeople, and it felt like an academic framework was being applied to what we already, for the most part, knew.
Most of what I learned about business was learned in business. I still think that’s the best way.
Related post: Starting off in a startup