Current management models are losing their relevance. A decade ago, a management degree was the golden passport — a ticket to the job of your choice, but the Wall Street collapse has forced society to question the analytical approaches prevalent in today’s business programmes. The writing on the wall is ‘innovate or die’. Where chief executives of the past were sensible and required to sell things proficiently, business leader today must touch lives and change paradigms.
Management study is not just about theory. In fact, this is one field where practice creates the theory. The 2013 ASSOCHAM paper on ‘B-schools and Engineering colleges shut down-Big Business Struggles’ reveals that campus recruitment in 2012 was down 40 per cent since 2009. As a result, B-schools and engineering colleges are not able to attract students. More than 180 B-schools have already closed down. Only 10 per cent of graduates from Tier-II business get a job immediately after graduating, compared to 54 per cent in 2008, says the report. “The main criticism of business schools is that they produce students for consulting and finance industries. Business schools must be relevant to the society. This can happen when business schools tackle social problems, and graduates work for real companies solving real problems,” says Vijay Govindarajan (VG), professor at Tuck School of Business, Dartmouth, USA and author of NYT Bestseller, Reverse Innovation.
The rules of the game have changed. A dynamic global economy demands leaders who think and act entrepreneurial, transform opportunity into reality, and create social and economic values for themselves and others. Management programmes need to offer students a strong foundation along with an entrepreneurial mindset. Ali Khwaja, founder and head, Banjara Academy, agrees, “Not all of them are doing so. Innumerable engineering colleges that started management courses are finding themselves out of sync, and since their core competency is technology, they are not able to compete and keep up. Other innovative B-schools have moved away from affiliation to university MBA degrees and are closing the gap by offering industry-friendly courses. This trend will continue, and there will be a shake up in the coming years.”
Students need to develop in-depth understanding of management fundamentals in the context of local and global businesses. Shalini R Urs, founder and chairperson, MYRA School of Business, Mysore, says, “The curriculum is being specifically developed to enhance managerial and analytical skills that are required for high-level strategic decisions in a fast-changing and expanding business scenario. The focus is on teaching the science of management and the art of leadership.”
The future belongs to entrepreneurship and technical innovations but have the basic concepts of marketing, finance and human resource lost relevance? “Technical skills are still relevant. Employers want graduates who have mastered the basic tools of marketing, finance, and operation, but those skills are not enough by themselves anymore. B-school grads will not simply be asked to run spreadsheets. They will have to interpret what they find and then sell their analysis to the top management. They will have to be entrepreneurial in how they deal with corporate problems and opportunities,” says VK Menon, senior director, Indian School of Business (ISB), Hyderabad.
The era of big data is here, and business schools must expose graduates to the skills that today’s analytics-based organisations demand. Satej Sirur, an ISB alumnus says, “At ISB, we had students study the most in-depth concepts in financial investing while also taking courses in business law and contemporary filmmaking. There were others who took IT courses that taught how to crunch large amounts of data and reach decisions based on analysis rather than hunches.”
Lead, innovate, reflect
Salvador López, a marketing and research professor at Spain’s Esade Business School believes the business world has much to learn from rock stars — their ability to stand out in a congested marketplace, the knack of establishing a loyal following with their audiences and learning how to embrace innovation. Great musicians are like social innovators and companies and their leaders must be the same, he argues. The innovation strategies demonstrated by musicians is when they mix things that were not linked before. Black Sabbath is a perfect example of creativity and innovative strategy as they were one of the first bands to mix music with the emotion of fear, and helped to create heavy metal. Shalini says, “Business schools have focused a great deal on imparting knowledge, but not enough on the last two parts of the equation — providing students with opportunities to ‘do’ (apply what they learn), and ‘be’ (develop an understanding of their own values and impact on the world).”
Tarun Anand, co-founder, Universal Business School, Maharashtra, adds, “We have built a trading room on campus, which allows students to take positions across the world in real-time and see how their global portfolios react to market changes. We have an incubation cell, where students bring their innovative ideas and put them to the real-market test, with the focus of learning from doing.”
Entrepreneurship, leadership, as well as ethics, that were once considered an introductory chapter in a management programme have gained prominence. Such infusion is critical if schools want ethical leadership to be part of a student’s DNA. VG says, “The past 10 years have exposed a leadership deficit, especially in ethics and authenticity. Leadership is ever more prominent in tackling the many critical problems faced by humanity. We need responsible leaders.”
Sustainability is another area. The green economy is about 3Ps or 3Es — Planet, People and Profit or Economic, Equity and Environment. No one would run a business without accounting for its capital outlays. Yet most companies overlook one key capital component — the value of the Earth’s services. It is a staggering omission, especially if we go by Harvard Business Review’s calculation, which places the value of Earth — water storage, atmosphere regulation, climate control, and so on — at $33 trillion a year.
Universal Business School offers a ‘green’ MBA. “We focus on green finance, green IT and green marketing designed by educationists from UCLA and Stanford. Each specialisation requires a project in their focus area with a core green aspect like cost-effective measures, problem-solving and implementing green processes into long-term planning,” says Tarun. “India is likely to create about 1 million green jobs in two years.”
Whether a review of syllabus in many B-schools is in response to a changing job market — fewer opportunities in banking and finance due to the economic crisis — or a general move away from large organisations is unclear. However, among MBAs, entrepreneurship is popular suggesting that the skills of enterprise are valuable as much when setting up a business as they can be within an existing business. Tarun states, “During one of the sessions, a student came up with a unique credit card retail banking solutions, which is relevant to the real world. When I pitched the idea to three banks, they suggested a new profile needs to be created for such compelling initiatives.” Ali adds, “The dividing line between an employer and self-employed is slowly but steadily getting bleak. The term for such class of workers is ‘intra-prenuer’, an entrepreneur within the enterprise, who gets the support of the parent organisation to work on their own ideas.”
B-schools are also offering industry-specific programmes to help students get immediate career traction and to prepare them for leadership roles in their organisations. In collaboration with academic and industry partners, schools have developed specialised degree programmes in risk management and insurance, finance, accounting, pharmaceuticals and healthcare marketing, and food marketing.
Business schools are also responding to a surge in demand for education that equips students to become social entrepreneurs. “Students are interested in setting up for-profit rather than non-profit social enterprises,” says Shalini. “We have a paper on social entrepreneurship. Out of five projects, two should be socially meaningful.”
In the future
The corporate environment is more dynamic, and change is the rule rather than exception. Tarun says, “There is room for new B-Schools who have an innovative mindset and are willing to challenge the status quo by experimenting with their curriculum, pedagogy, delivery and assessment models. Global alliances and building bridges between nations will be a critical aspect of survival. Another aspect of what we are keen to see in India is to have global campuses with a multicultural and multinational student and faculty body.” Specialisation will be the keyword for Ali. “The ‘generalist’ MBA will slowly be replaced by professionals who command core competencies in their domain. Management learning will more and more be on real-life ‘case studies’ and experiential learning, including serious internship programmes,” he says. “The dividing line between an employee and a self-employed person will become hazier, with the advent of intra-preneurship.”
Has the financial crisis dimmed the prospects for MBA graduates? VG says, “MBA education is about building a network and developing character. It is a transformational experience. Such transformational experience can happen only in full-time residential programmes. They will, therefore, continue to be prominent.” Tarun argues, “I also believe that B-schools delivering the two-year model will be less relevant in a decade from now. The European and UK business schools have learnt this and the US are still wondering how to adopt the new model of being efficient with one’s time. If one can achieve the same result in half the time and with intensity, then it is ridiculous to spend more time on a campus, rather than getting into the real world.”
Full or part-time — this is debatable, but change is surely the new school of thought. “Successful future managers will be those who can learn, unlearn and relearn continuously. There will be more certification and licensing programmes with international accreditation in the future. For instance, Project Management Institute certifies Project Management Professionals (See Pg 12),” says Ali. “The next phase of India’s growth will depend on innovating for Indian consumers,” adds VG.