The other day I posted 5 Entrepreneurship Basics B-Schools Can Teach. It’s natural to follow that list here with the exact opposite: 5 other entrepreneurship basics the business schools can’t teach. But I couldn’t quite do it. I had to change can’t to don’t. That, to me, is a significant difference. So here they are  (things they don’t teach, not necessarily things they can’t teach):

1. Dealing with people

Sure, you can teach organizational management, and there are rules for employees, lots of advice on selling, buying, leadership, and all that. But can anybody really teach empathy? Do you learn how other people feel by sitting in a classroom, or by working with (and living with) them. I like the new network television show (Lie to Me — pictured here to the right) where they read physical signs like facial expressions to know who’s telling the truth and who’s lying. The rest of us need a lifetime to figure that out, and, let’s face it, we probably never do.

How about the basics of self interest, like starting every business communication with “you” and the benefits for the reader or listener? Or figuring out who’s likely to be a long-term ally, and who isn’t? Or figuring out that selling right is listening first, and solving people’s problems? Some business schools try to teach that stuff. Most fail.

2. Right and wrong

I know business schools are trying to teach business ethics, but it’s so hard because there are so many different views, and social and political constraints; and ethics means different things to different people.

My bias on this point is that businesses that act in ways that help the community, and their employees, and their customers, and the earth and the environment, and all that jazz, will do better over the long term. Things like fair play and, at the very least, doing no harm, are critical to long-term success.

Fairness is so important. No business deal or alliance will work over any useful time frame unless it offers benefits to both sides. Screwing people is not a successful business model. But can that be taught? I can’t even prove it, let alone teach it.

3. Having a life

With all the baloney we spread about entrepreneurship passion and perseverance and persistence and all, where in the curriculum do we teach putting business in the right order of priorities? Who teaches that it’s easier to find a new job, or build a new business, than a new spouse? Which class is that?

Business schools and business academics undervalue life as they (we) teach starting a business as the classic high-end getting financed and getting an exit. There’s way too little attention to what we (with a sneer, usually) call a “lifestyle” business, or, for that matter, starting up via bootstrapping instead of outside investment. And nobody teaches how to decide what to do when a crucial business meeting interferes with a kid’s soccer practice.

Every class in entrepreneurship should have at least one session with somebody who got so obsessed with the business that they lost the rest of their life. It happens a lot. It needs to show up in the classroom too.

4. Managing risk

I don’t mean the technical side of risk management. Business schools are generally excellent at teaching the numbers and analysis of risk, mathematical tools to evaluate the time value of money, for example, and formulas to compare technical investment risk like the internal rate of return (IRR).

I do mean living with risk. Not betting things you can’t afford to lose. How to sleep at night when your customers owe you enough to destroy you simply by failing to pay what they owe. How to figure out which spend is a reasonable risk for generating a future payback, and which isn’t. How it feels to take a second mortgage, or how it feels to tell a graduating high-school senior with a great record that there isn’t enough money for the college he or she has earned.

Don’t take risks if you can’t live with the downside consequences.

5. When to hold and when to fold

One of the hardest thing we do, in startups and small business, is figuring out when to stick to the plan and when to back up and try something else. There are no magic formulas, no software that can do that for us. It wraps up a combination of guessing the future, projecting different possible scenarios, understanding what’s at stake, and figuring out where assumptions were wrong, where sticking to the plan makes sense, and where it’s going to be like running your head against a brick wall over and over.

Reflection: teaching with stories

How do we teach any of this? The best hope, I think, is by telling stories: Stories of failures, stories of problems, challenges met, situations, and so on. We do deal with business cases in business schools, and cases, when done well, are a lot like stories. Of course the value depends on a couple of important factors, like the case itself (real business, or big business?) and the teacher. True stories, told by the people who lived them, can be better than business cases.

Final thought:

Am I wrong on this? Maybe my experience is out of date. If the business schools are getting better on this, I’d like to know. I’d be very happy to be proven wrong.