Formal Education or Experience – What counts for Success?

(This post and the one below it were written for one of my cousins who was attending an interview. I never intended to write on these topics or never thought I would someday be writing on such topics. But anyway since I had written, I thought these also could be a part of my blog since they were also thoughts with me, thoughts with Viswasam.)

Gone are the days when business culture was inherited from ancestors wherein generations after generations were involved in the same line of business. Now are the days of getting oneself equipped with a swanky degree in management. Whether these qualifications form a passport to success in the entrepreneurial or managerial success in the corporate world, is a question for which it is tough to find an answer.

The good old days were on the lines of, ‘Like Father. Like Son.’ The progeny learnt the rules of the game in an informal manner through first hand observation and, on the field experience. Take a case of retailing, where one could see a typical baniya running the business of kirana stores on his own with little help from his family members. The business is later taken over by his offspring. The size of operations in such a business was also very low. But in these days of Globalization and Liberalization, there is always a threat from new competitors not only from within the country but also from outside the country. Taking again the case of retailing, the size of operations have grown; organized retail has been gaining importance; such situations call for thorough knowledge of the environment not only locally but globally which can be met only through formal training. So it becomes evident from the case above that experience cannot replace formal education.

But does formal education alone guarantee success is another tricky question. Now that also poses questions on the objective of the formal education offered by the schools of management. Traditionally management education has been seen as an education for the working people who want to advance in their careers (Literally speaking, it was for people looking for higher paycheques). It concentrated on only making them better equipped with knowledge which they could use in their areas of work. But lately, there has been a constant increase in the number of B School grads opting for entrepreneurship (This might be due to passion or recession, do not ask me). This has led the schools to launch specialized courses on entrepreneurship. But still the question remains unanswered. Does this education alone help? This could be answered by the number of start ups that have failed; the number of students signing up for entrepreneurship courses as opposed to the traditional businessmen of inheritance.

What could be said is that entrepreneurship requires passion, dedication and lots other adjectives to go with it. When this is coupled with a formal learning of management principles, them that would be the deadliest of combinations one could have.

Coming to success in the managerial career, it is often preferred to have graduates in management for the key positions, but do they alone fit the bill is an issue that needs consideration. Taking a sales profile as an example, the position at the bottom of the pyramid is often the ‘Sales Executive’ for which a basic degree in any discipline is considered. Over a period of time, this sales executive gets to climb the sales ladder through the number of years of experience that he puts in. This can even go on upto the top most position in the profile. There have been instances in some companies where the CEO started of as a sales executive in the same company. But the process takes considerable amount of time. But, if a basic graduate, instead of going ahead with the lowest level job in sales, goes on to pursue management education there are chances that he might get into a position directly after his education which originally might have cost him significant amount of time. Therefore it can be ruled out that only formal education helps in managerial success. But it might open a few doors early than the experience route. Ultimately it is the knowledge and skills which count but not the whether one acquired it in a closed room of four walls or in a big, open class room of the corporate world.