Wednesday, March 04, 2015

On Business Education in India

In my various conversations in India, I get to hear that business education is in crisis. The applications and enrollments are falling, and the MBAs from most institutions are not getting jobs that justify the effort, and investment, in an MBA. Several schools are up for sale, and everyone is generally pondering about the future. Most conversations are focused on the Quality Crisis - they point to the three or four top-ranking and extremely selective Indian Institutes of Management (IIMs) still maintaining their value proposition - and most new institutions are desperately trying to replicate their strategies around them, often hiring people who leave or retire from IIMs.

However, what gets missed is that this is not just a quality problem. There is a whole lot more here, though it is difficult to analyse this appropriately in a country like India where innovation and courage are not really associated with education. However, a good place to provoke a discussion is indeed to look at the models such as the IIMs (A, B, C and L - as the four old IIMs in Ahmedabad, Bangalore, Calcutta and Lucknow are now categorised separately from the newer IIMs) and see what a medium-ranking institution can do a salvage their business model.

To start with, quality is a vacuous term, which gets used without explanation in education. If quality means rankings, it may make some sense - though, if the whole field of comparison is sub-par, which indeed it seems to be in India, a Higher Ranking may not necessarily mean Good Education. Quality may mean selectivity, and indeed, this may be what it really means, but again, that does not automatically mean Good Education. It may just be good inputs going out as good output, without any process excellence. If quality means the credentials of people who teach in these institutions, again that may not necessarily mean good education - because we already know many of them are good teachers and some of those credentials themselves are earned in an education system which seems to be failing. And, finally, if quality means prestige, then we may be in an infinite loop of sorts, until someone starts questioning whether the King has any clothes on. We may actually be at such a moment.

Notwithstanding the prestige of the IIMs, even the number of people applying for IIMs are failing. This is surprising in a country like India, where the student numbers are swelling, middle management jobs are going vacant and the fees at IIMs are kept quite low and covered by adequate bank financing. The worldwide trends of falling business school applications (which has since turned a corner) were related to the Global Downturn, but it may not be so in India, where the swelling numbers and the fact that MBA is treated as completion of education (rather than something to be done post-experience, which involves leaving jobs) cancel out any effects of global recession. The only conclusion to draw from the falling numbers who are taking Combined Admission Tests (CAT) is that the IIM model is not delivering as well.

One must admit that students coming out of top four IIMs still get jobs, and with good salaries. But this is more due to IIM prestige, and relative scarcity of alternatives - something that, by definition, can not be replicated. The mid-ranked Business Schools, as well as the newbies, are always in a mad rush for this Prestige factor, seeking out Brand Ambassadors, Advisory Boards, Ph Ds etc. And, all this, which invariably leads to failure because prestige only exists as a scarce thing. It is not surprising, therefore, that B-Schools are failing in India despite the swelling student population and unmet demand for Middle Managers all across the Indian Industry.

India, however, may be reaching a threshold of an Enterprise Revolution. The entrepreneurial energies of Indian youth was quite visible over the last two decades, and now the Government is, belatedly as governments do, attempting to create the basic legal and financial infrastructure for the same. The banking system is expanding, there is talk of tax relief for investment in small businesses, a bankruptcy system is being discussed and the policy directed to easy and cheap credit. The only missing thing is people, as it is always in India, and this should shape the agenda for B-Schools, or at least those among them who are capable of thinking, to get their act together.

Any such reinvention of the business schools perhaps need to attend to four key priorities

First, the focus must shift from prestige to pedagogy and outcome, from blindly following what there is - and acknowledge that it is failing - and try to re-imagine the student value proposition.

Second, the two unaddressed elephants in the room, Globalisation and Automation, need to be addressed. So far, globalisation is confined to one corner of International Management and Technology sparsely went beyond Google and Powerpoint. A serious look at how these two forces are changing business - and indeed, Indian businesses - and preparing students for a seriously disruptive future needs to come to the core of B-School proposition.

Third, one needs to acknowledge the days of formulaic Business Education - learning theory and doing calculations - is over. The more uncertain the world becomes, the art of business, rather than the science of it, takes the centre-stage. As one of the leading Education Innovators who I follow closely argues all the time, an art should be taught as all arts are taught - in the studio, by doing the stuff. The whole business school curriculum should be predisposed to doing, rather than sitting passively in the classroom.

Fourth, as one of my correspondents from India pointed out, such education should have dual focus on competence and character. Not just the competencies B-Schools develop are often outdated, they completely miss the point about character. And, this is not about a paper on Business Ethics, but rather a grounding of Business Education with ideas about self, social engagement and citizenship commitments. These are not soft subjects to be ignored, but real differentiators a new generation B-School can offer.

That, in short, my take on Indian Business Education. I remain passionately interested, and therefore, often disappointed about the state of thinking in the sector. Innovation usually happens on the fringe, and it is the state of the fringe players, their lack of thinking and sometimes, plain deviousness, that is the most worrying. I remain interested to connect with anyone who are thinking seriously about Business Education - this post is perhaps just one attempt to start that conversation.

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