Business Monday: Book Smarts vs Street Smarts – Bob Salvas

by Bob Salvas, contributing writer

Which is better: practical intelligence or academic intelligence?  Or, as we sometimes like to put it: book smarts vs street smarts?

According to Google: Book smarts give you deep theoretical knowledge and credentials, while street smarts give you practical problem-solving skills and real-world adaptability.

That seems like a reasonable comparison, and while both have their benefits, when it comes to business, I think the scales lean just a bit towards the street smarts side.  For some evidence of this, just look at a list of some of the most successful businesspeople in the last 50 years and you will see the names Bill Gates, Steve Jobs, Mark Zuckerberg and Richard Branson.  None of those four even had a traditional college degree.  All of them dropped out of school at some point.

I believe one of the reasons why business favors street smarts is due to the pace of change.  Things that don’t really change much (or change slowly)- math, chemistry, and others align well with academics as an important way to learn those things.  Business, on the other hand, can be a rapidly changing environment.  New products, new technologies, new market demand, new ways of doing old things- all this and more runs rapidly through the ever-changing world of business.  Also, academics can be conservative and risk averse whereas the rapid changes associated with business almost always involve some risk.

“An entrepreneur is someone who jumps off a cliff and builds an airplane on the way down.”  -Reid Hoffman

Now, obviously there are some areas of business where academics can help.  Accounting or anything related to math, for example, are important skills for the success of every business.  Conversely, if you look at something like marketing or sales skills, real world experience is probably going to benefit you a lot more than what you learned in school.

For example, when I was taking marketing in college, we learned about AIDA (attention, interest, desire, action).  That was the model you were supposed to use in marketing whatever it was you were trying to sell.  The problem with that old model is that the consumers of today are way different from the consumers of yesterday.  Today’s consumers do their own research, and each person is not going to conform to those “one size fits all” types of ads.

In fact, many of the old ideas in marketing no longer work today.  Recent studies have shown that small businesses (83% of them) indicate their number one source of new business is referrals.  This is significant because the year before, in the exact same study, the numbers were much lower at 65%.  A big jump for one year and something that as a business owner, you should pay attention to.

In looking at this new data, as a business owner, I would consider spending more money on things that can best drive the referrals equation.  I would engage in more consistent networking.  I would have ongoing communication with those in my sphere of influence.  And I would try to offer my existing customers an exceptional experience that would inspire them to talk about my business.

I would also look deeper.  Why is referral marketing on the rise?  The underlying reason may be that people have a growing distrust with businesses they do not know or have not done business with yet.  This may lead to more consumers asking others for recommendations.  This kind of social proof can also show up on social media and on your Google Business Profile so you might want to put some attention there as well.

What is the bottom line in all this?  Both book smarts and street smarts can be important to the success of your business.  It is not really an EITHER OR but rather a BOTH AND.  However, you must keep in mind the areas where each is strong and each is weak.  When it comes to marketing (which is stronger on the street-smarts side) you want to make sure you are staying on top of the many changes.  Here are 3 things you can do when it comes to figuring out the marketing for your small business:

1. Read current articles and books from marketing and business development experts (the book Relationship Advantage by Barb Betts published this year is a great choice).
2. Attending classes and conferences featuring people who are doing marketing for others right now to see what is working for them (attending The Marketing Camp, which is an annual local event, is a great choice).
3. Sometimes you must just take some action and try something to see what works for your business-but NOT without a way to measure your success. This is one of those ideas that does not change over time- knowing where your sales come from.  Measure your successes and failures- for failures, stop doing it and for successes, do more of it!

“You can’t manage what you can’t measure.”  –Peter Drucker

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Bob Salvas is a Professional Development Manager for the RI Builders Assn, a marketing consultant, the founder of Momentum Networking, and the co-founder of THE MARKETING CAMP, a yearly conference to help small businesses achieve success.  For more information about THE MARKETING CAMP, go to themarketingcamp.com.  Bob can be reached at 401-359-1602 or at [email protected].