Challenges facing IIMs

The change of government at the Centre may have freed the IIMs from the clutches of Murli Manohar Joshi, but they would be unwise to uncork the bubbly.

The fact is the current HRD minister's actions look liberal only in the context of his predecessor's retrograde moves. Politicians being politicians, there is no guarantee that there will be no further encroachments on institutional autonomy.

It's worth noting that while Arjun Singh may have emerged smelling of roses on the issue of reducing IIM fees, his government is threatening to impose private sector job quotas. Not exactly a demonstration of governmental restraint. No IIM board should, therefore, be under any illusion that Joshi was an aberration.

Given this reality, the IIMs would do well to strategise on how they can steadily expand their economic independence. This means weighing several options.

Among them: building Harvard-style endowments, obtaining greater industry funding for research projects and consultancy assignments, increasing the intake of higher fee-paying foreign students, and hosting more campuses abroad. The funds will come if the will is there.

While economic independence is important, the IIMs also have to rethink their missions. There are three priorities that need addressing. One is the quality of faculty. The IIMs may have the best faculty among Indian B-schools, but they are not quite there when benchmarked against the Top 10 US or European schools.

The current pay scales are just not enough to bring people with real industry experience to teach on campus. The second issue is the quality of industry interaction. With a few exceptions, Indian business just does not think much of the quality of research and intellectual capital generated at our B-schools.

One pointer: when CEOs seek advice on strategy and globalisation, they either go to the McKinseys and Accentures of the world, or to academics from Harvard and Wharton. Barring small-time stuff like running training programmes for salesmen or refresher courses for middle managers, even the IIMs are not quite there.

The third issue is seeking diversity in the student population. Today, getting into an IIM means cracking the CAT exam; this, in turn, usually boils down to selecting people who are willing to invest in CAT-oriented coaching classes.

In effect, the IIMs get students with higher-than-average IQs and/or those with the ability to invest in intensive coaching. There is little diversity in terms of ethnic mix, experience or skill sets. For example, anyone who wants to be a top manager or leader should be strong on soft skills.

But most Indian businessmen who recruit MBAs from campuses feel that the IIMs produce self-centred careerists who don't have the innate humility to lead people by the power of persuasion and example. Thanks to CAT, the IIMs are actually pre-selecting students from a small group of high IQ individuals.

Today's workplace, however, needs a diverse pool of managerial talent that is high not only on IQ, but also EQ (emotional quotient).

Moreover, it is not only corporate India that needs MBAs. NGOs and the social sector also need strong managerial talent. There is no sign at all that the IIMs are looking at meeting these needs of society at all.

The IIMs need to see how they can ensure greater diversity in student selection. This problem is not going to be solved by merely offering more scholarships to students with limited means.