We learnt that placements did not equal job satisfaction. There was a major problem of attrition among recent graduates, even among the top earners. Many didn’t last six months.
While there are undoubtedly several factors at play here, a significant factor in this problem are the B-schools themselves. Their outsized focus on placements rather than learning; jobs and salaries rather than careers. And while the system is far from ideal, nobody wants to change it. Students have loans to pay, companies have hiring targets to meet, and business schools have a reputation to take care of. A reputation based on salary packages and placements.
So we went back to experts and questioned them about possible solutions to the problems—some if not all—that ail the Indian business school setup.
The general consensus was that just blindly adopting the Western models wouldn’t work in a country as unique and diverse as India. “India is a huge country with very different demographics compared with many nations in Europe or even the US,” says Deepak Chandra. An independent advisor in the learning space today, Chandra was the deputy dean at Indian School of Business, Hyderabad, until 2015, a position he held for 12 years.
Chandra and many others, however, believe that many Western solutions could be tailored to work in the Indian business school ecosystem.
No time to waste
The B-school model that has evolved in India is completely different from how it works in more evolved markets such as the US or Europe. And a large part of this has to do with the motivations behind opting for a business school.
Overseas, students in B-schools tend to already have about five years of work experience, opting to attend business schools once they’ve understood what they want in their careers. As such, one-year programmes which allow for brisk upskilling before plunging back into the job pool are increasingly preferred.
This is hardly ever the case in India, where the two-year programmes have traditionally been preferred over the shorter one. The reason? Students with a three-year undergrad degree or an engineering degree sign up directly for MBA courses without any prior work experience or idea about what they want careerwise.
So, while the shorter courses are meant to build incremental skills on top of work experience, the longer courses instil business fundamentals that many without experience may not have.
Experts The Ken spoke with identified this as one of the biggest issues with the Indian system. “If you have close to five years of professional experience, a one-year MBA course is enough. However, it is not adequate when students are not quite mature and enter the programme straight from undergraduate studies or with just one or two years of work experience,” says Devanath Tirupati. Currently the dean at Ahmedabad University’s Amrut Mody School of Management, Tirupati has had long teaching stints at IIM Ahmedabad and IIM Bangalore.
For many fresh out of undergraduate courses or without much work experience, says one IIM professor, even two-year courses are not enough. He asked to remain anonymous as he isn’t authorised to speak to the media.
ISB is one of the few institutions in India that offers a one-year postgraduate programme (PGP). The majority of B-schools have a two-year programme, though most also have a one-year executive programme. As we move towards a more mature business school infrastructure, however, the duration of the course will have to shrink.
“People don’t want to spend two years of opportunity costs to go back to school,” says Chirantan Chatterjee over the phone from California. Chatterjee is an associate professor in economics and business policy and the ICICI Bank Chair in Strategic Management at IIM Ahmedabad. He is also the 2018-2019 Campbell and Edward Teller National Fellow at Hoover Institution, Stanford University.
An ISB graduate The Ken spoke to echoed Chatterjee’s sentiment. He said that while ISB’s course was a little rushed, he’d choose it every time as it allowed him to re-enter the job pool faster. He didn’t want to comment publicly on his alma mater.
Over the last few years, especially after France-headquartered INSEAD topped the Financial Times Global MBA Rankings for the first time in 2016, the one-year programme has caught everyone’s attention. INSEAD’s full-time MBA course is 10 months long. According to the Prospective Students Survey 2019 by the Graduate Management Admission Council, which conducts the GMAT exams, “Overall consideration of one-year MBA programs (47%) surpassed two-year MBA programs (45%) in 2018 for only the second time in the last decade of survey data.”
“It is already a trend in the West. I see it becoming more of a norm in India too,” Chatterjee says.
Location, location, location
And if time is precious, location is pivotal. But you wouldn’t know this if you look at where many of India’s business schools are situated. Most sit independently, like little islands cut off from the mainland. Apart from being far from industries in general, they also operate in silos.
Look at the IIMs, for example. None of the 20 IIM campuses are in either Delhi or Mumbai, which are home to over 20 million people and some of the biggest companies. Instead, of the 20 IIM branches, some are in smaller cities such as Kozhikode, Jammu, Shillong and even Kashipur, a city in Uttarakhand with a population of ~121,000.
“Like many other things in India, it is also about the business of appeasement,” says the IIM professor quoted earlier. “A business school’s biggest asset is the core faculty, and the more distant you are from the main industries and cities, the more difficult it is to get good faculties. How many faculties will move full-time, with their families, to smaller cities like Kashipur where other opportunities are very limited?”
To be sure, some of the best private B-schools are in or close to the biggest Indian cities or industries, but experts point to a lack of direction on the part of the government when it comes to the expansion of IIMs.
It goes beyond just recruiting faculty, and into exposure. As Premchand Palety makes clear, proximity to industries gives students a chance to work with business leaders. Palety is the founder and CEO of C fore, a Gurugram-based multi-disciplinary research organisation. “The farther these institutes are from industries, the harder it will make such interactions,” he adds.
Beyond the walls
Adding to this lack of exposure is the fact that most of India’s premier educational institutes exist in silos. The various Indian Institutes of Technology, National Law School, IIMs. Even with B-schools that exist within larger institutions, they function within invisible walls. Take the situation at Jawaharlal Nehru University, for example. Despite having one of the best humanities programmes in the country, none of the courses—either core or elective—in its two-year MBA programme are inter-disciplinary.
Meanwhile, if you look at some of the most successful B-schools in the US, they have benefited from being a part of a larger education ecosystem. “If you take the example of the Wharton School or Stanford GSB, they are part of a large ecosystem like the University of Pennsylvania and Stanford University, respectively, which have different departments from medicine to political science to engineering,” says Anirudh Suri, Founding Partner at India Internet Fund and a Wharton School graduate. “Students learn from each other in such diverse multi-disciplinary teaching environment. But when you look at the premier business schools in India, they are like separate islands.”
The IIM professor quoted above concurs. “Interaction with students in other streams is important in the evolution of the business leader of the future,” he says, suggesting that premier institutes, say, the IIMs and the Indian Law School, should look to collaborate.
This is the case overseas, Sunder Kekre says over the phone from Pittsburgh, Pennsylvania. Kekre is the Vasantrao Dempo Professor of Operations Management at Carnegie Mellon University’s Tepper School of Business. “There are programmes that are bringing computer science, architecture, entertainment, public policy, etc., closer to each other. The deans are trying to craft programmes that tie these things together to meet the needs of the students,” he says. “Such cross-disciplinary programmes foster creative thinking and blend both technical and soft skills to manage the enterprises of the future,” he adds
This last point Kekre makes is pivotal because technology and automation are reshaping the workplace as we know it. And the changing equations between man and machine will generate new opportunities for managers. For example, while machines and algorithms will kill 75 million existing jobs, it will also create 122 million new roles by 2022, according to the World Economic Forum’s The Future of Jobs 2018 report.
Multiple professors The Ken spoke to, however, said that Indian B-schools simply do not take this into account. The curriculum at many top B-schools, they say, hasn’t evolved to keep pace with real-world change.
“The future of work is less of labour and more of non-labour-oriented, technology-driven processes. What is required is the ability to manage ideas and technology that change the way firms produce, and also the adjustment process,” says Chatterjee. “The role of tomorrow’s manager will be to first adopt these new technologies and then to reorganise the firm towards enhanced productivity while adopting to newer technology,” he explains.
Robert Simons, Charles M. Williams Professor of Business Administration at Harvard Business School, said in his 2013 paper that “The business of business schools is teaching business”. But with business evolving, so must business schools. The standard subdivisions within a business school—finance, HR, marketing, and operations—are not adequate going forward. The curricula at business schools need to be supplemented by courses on Internet of Things, insights and analytics, law and ethics, etc.
It isn’t simply about adding new courses either, but also about revamping existing ones. An example Chatterjee offers is the role of the ethics department. “The ethics department’s job has to evolve from the handling of crony capitalism or regulatory capture to dealing with the new use cases that will emerge as tech transforms the future of businesses,” he says.
Schools in the West are already implementing these changes. All the way back in 2013, Columbia Business School junked its compulsory course in decision models and replaced it with an emphasis on statistics and “big data”.
Leading the way
To implement such changes in the current model, however, will require strong leadership. But change is difficult even if it is essential. Falling into a behavioural trap, creating a formulaic structure, is far easier. Even if a system is broken, as we argued in the previous story. Changemakers, therefore, come few and far between. They also stick out like a sore thumb, feel cornered in a powerful system, and eventually leave.
“I am not sure if people who want to bring about change are supported deeply enough or long enough,” says Chatterjee. “There is always some kind of petty politics between the incumbent system and the successive leader. One just grows tired of it and throws in the towel.”
Part of the problem is the lack of global aspirations. There are hardly any global industry leaders in the governing councils of even the IIMs. Mark Zuckerberg, for example, sits on the board of China’s Tsinghua University School of Economics and Management. Meanwhile, says one B-school professor, the governing boards of Indian B-schools are led by strong local industrialists. “They are local monoliths who aren’t global leaders in their own industry. You need leaders from outside India to bring in a larger world view to drive the aspirations,” he says.
Private institutes like ISB, on the other hand, have exactly this. CEOs of global corporations such as Michael S. Dell of Dell, Lloyd Blankfein of the Goldman Sachs Group and Bernard Arnault of Louis Vuitton sit on its board.
Roadblocks to progress
Leadership alone won’t cut it though. All these changes come at a cost. One many B-schools simply can’t afford. If you look at a Harvard or a Stanford, for example, they are big, have a rich legacy and economies of scale when it comes to resources. Indian schools, in comparison, don’t have that luxury despite having raised their course fees multiple times in the last decade.
For the year ending 30 June 2018, Harvard had a budget of $5 billion (Rs 35,000 crore). In comparison, the Union government allocated Rs 415.41 crore ($59 million) for IIMs for the year ending March 2020. This was 60% less than last year’s allocation of Rs 1,036 crore ($148 million). Even if we assume just 1% of Harvard’s budget goes to its business school, that’s almost as much as all of the IIMs combined.
In addition, American schools also have a vast, successful alumni network who keep supporting their alma mater. According to the HBS website, 80% of all living alumni have contributed at least once. “If you look at India though, this is not such a common practice. And very often these donations, too, go to the American schools rather than those in India,” says Suri.
Most Indian B-schools are also fairly young and, therefore, their alumni base is limited. Only three-four of them actually have some history. As such, fundraising by Indian B-schools is still in its nascent stage, though an Economic Times report states that it is picking up.
While funding will remain an issue, the reluctance to change is a bigger challenge that needs to be addressed. “The biggest problem in implementing change is the resistance from faculty members themselves,” says a B-school professor, who asked not to be named as he isn’t authorised to speak to the media. “Things are working alright for them. Every year, an increased number of students are applying, so they (institutes) become ever more exclusive. They are showing good placement records and good packages. That is what everyone else seems to care for.” This, he concludes, is detrimental to learning.
“The point is that you have to be mission-driven,” says Chatterjee. “As you go along addressing these larger issues, I think it is possible to create business schools in India that can become global models tomorrow.” To start on that path, however, India’s B-schools will need to reassess their priorities.