IIM, the accidental brand

This is an interesting perspective...


http://in.rediff.com/money/2004/mar/23iim.htm
March 23, 2004


Which side are you on in the IIMs versus Murli Manohar Joshi battle?

Personally, I am on the side of the spectators, who are getting their money's worth of action and drama, despite competition from cricket and politics. I find it difficult to root for one side or the other because neither has earned it.

In any controversy of this kind, the easy thing to do is to let the combatants define the issues and then allow ourselves to be persuaded by one argument or the other. But the real issue is different.

Ask yourself: which side has actually done something to further the cause of management education? That is the side worth backing. Arguments about fees and autonomy are red herrings.

If I may oversimplify things for a moment, the broad objectives of management education should be to develop competent managers to run various kinds of institutions (profit-oriented corporations, non-profits, government and social sector organisations) and create intellectual capital through cutting-edge research that can influence practice. There can be several other objectives, too, but these are certainly the most important.

In these two crucial tests, the IIMs -- and other B-schools in India -- have flunked. As their financial backer, the government shares the blame in equal measure.

True, we have corporates willing to pay IIM-brand MBAs lakhs of rupees merely for passing out of these institutions. But is that success? Contrary to popular impression, the IIMs do not produce great managers; it is cut-throat competition for IIM seats that ensures high-quality MBAs.

On the other hand, given the amount of government funding received by them, the IIMs have been complete failures: they have not produced the kind of managers we need to run government or social sector organisations. Nor have they produced a single piece of research that can be called cutting-edge.

My argument is that the reputation of the IIMs has been built on the quality of its students and alumni -- not the other way around. This fact can be easily checked out: Indians with means would anyday opt for a Harvard or Wharton -- and they would even find it easier to get admissions.

If at all the IIMs need to be complimented on anything, it is the huge entry barrier they have put up to prevent average students from getting in.

So, if I were Murli Manohar Joshi, I would cut off all IIMs from any government grants for failing to do what they are supposed to. And if I was on the other side -- a dean or chairman of an IIM board -- I would say that the objectives of management education cannot be met within the limits set by government babus -- and would walk away to set up fully private or charitable institutions that would train the right kind of managers for different kinds of institutions -- for-profit or non-profit.

And if I were a corporate, I wouldn't look beyond the CAT preparatory schools for recruits. If you merely want candidates who have the right mental skills for success, a CAT ranker is as good as an MBA -- and without the arrogance.

Why wait two years for him to earn an MBA, spend another year teaching him business realities, and live all the time with the fear that he may abandon ship at the slightest opportunity?

Groups as big as the Tatas or Birlas may actually find it cheaper to put candidates through simple IQ tests, organise customised learning on the job and create an internal campus where the faculty would be a mix of in-house managers and academics who understand the Tata or Birla ethos.

Such students would also come cheaper, since they would not have wasted two years trying to acquire an MBA that's far removed from reality. I wouldn't be surprised if many corporates start thinking along those lines shortly. The growing popularity of executive MBA programmes is a foretaste of things to come.

Quite clearly, if the IIMs and other B-schools are to be relevant at all in the Indian context, they have to reinvent themselves. They are succeeding today only because the people who buy their products -- corporates, primarily -- are too lazy to do the job themselves.

Seen in this perspective, it matters little whether the IIMs charge Rs 30,000 per annum or Rs 1.5 lakh. Either way they don't produce the kind of managers India needs.

Equally, it matters little whether the IIMs are autonomous or not. They have done little with whatever autonomy they had so far. The unvarnished truth is that the IIM brand was not the creation of a far-sighted government or of the people managing these institutions.

It was an accident resulting from the sheer quality of students getting in. The issue before both the government and the faculty is simple: accident or otherwise, they have a good brand on their hands. Should they acknowledge their undeserved good fortune and make joint efforts to make the IIMs really worthy of their reputation or should they destroy it, since they did little to create it anyway?