You may have hired the biggest brains from the best B-schools this year too. But you won't be able to retain them until even next year----unless you know how MBAs tick. For the first time, the secrets of managing the MBA lie revealed in this seminal study of the professional life and personal times of India's MBAs. BT presents the New Millennium MBA Guide.

A BT Gallup MBA Study

His resignation came as a bolt. Only a fortnight earlier, Rajan Krishnan, the Vice-President (HR) of the management consultancy company, had thought that he had solved the problem of 27-year-old Shailendra Singh, the brightest of the MBAs that the company had hired 18 months earlier, with annual pay-packet of Rs 3 lakh--20 per cent more than the average that year. The personality tests that Krishnan administered to all new recruits had identified Singh as a restless achiever, who constantly needed new challenges to excite him. So, two weeks earlier, when his CEO, Amar Patil, had told him about his plans to open a new branch-office in Bangalore, Krishnan had persuaded him to assign Singh the job of setting it up as its head, arguing that this was the only way to retain the high-flying MBA.

But now, Singh had quit to join a foreign bank in a process management function. His candid resignation letter was a revelation to Krishnan, who had been under the impression that he knew what made Singh, and his other B-school recruits, tick. But, as he read the letter, he realised that, contrary to his own belief, he hadn't really been able to tap the B-school grad's aspirations. What Singh really wanted, it appeared, was not money, but marketability. He wanted his first job to be a process of continuous learning, which would open up a world of opportunities for him thereafter. Being part of the organisational machinery, or forging a career within the company, or even facing challenges for the sake of overcoming them were secondary considerations for him. What Krishnan--and the company--was offering Singh was too far removed from his personal priorities for him to stay with them any longer than he had.

It's time to maximise your MBA ROI. Year after year, corporates invest increasingly stiffer sums in hiring hot MBAs off the campuses of India's best B-schools. A now-ritual war, this time for The Class of 99, has already been waged--and won or lost--on the B-attlegrounds. Talented trophies are in the bag for corporates that deployed their entire array of weapons: dollar-parity pay-packets, shining corporate reputations, fast-track career-growth, and headroom for innovation. And yet, if history is any indicator, these companies are destined to lose all their prized picks in 5 years flat. Worse, the exodus will begin in just two-and-half years.

That's why it is time for companies to start thinking about the returns on the investments they make in their MBA-hires. It starts, of course, with the salary: the median compensation-package at the 4 IIMs in 1999 was between 32.44 and 134.38 per cent higher than last year. At IIM-A, the figure for 1999 (recession? what recession?) stood at Rs 7.50 lakh compared to Rs 3.20 lakh in 1998. In fact, the average annual growth-rates in the last 3 years at these 4 B-schools have been between 15 and 40 per cent.

And the largest pay-packet--a quick indicator of just how highly an IIM grad is valued as a human asset--in Placements 99 stood at $115,000 (Rs 48.30 lakh) per annum, commanded for a global posting with Mitchell Madison by an IIM-A grad, which was 53 per cent higher than last year. The largest rupee pay-packet of Rs 8.90 lakh per annum offered by GE Capital and Boston Consulting Group to 1 grad each from IIM-A was also 20 per cent higher than Placement 98's peak of Rs 7.50 lakh.

Stratospheric starting-salaries--spurred by foreign companies parachuting in to trawl for MBAs for their global operations--are only the first tranche of the investments that corporates make in their MBAs. Then follow the orientation- and training-costs, along with the costs of creating specialised slots for the best brains to ensure sufficient scope for their abilities to be showcased. Estimates Raju Bhinge, 41, CEO, Tata Strategic Management Group: "A company invests nearly twice the compensation-package on an MBA in the initial two years." Sooner or later, payback time must arrive.

Only, that's when yesterday's campus star reveals herself to be far tougher to manage than she was to hire. Her needs never seem to match those of the company she works for. Her methods alienate the traditionalists in the organisation. Her demands force the company to stretch its resources. And, in the process, the organisation loses out on the opportunity of capitalising on the potential for brilliance that the MBA brings into the company. Analyses Leonard D' Costa, 48, Group President (Corporate Development), Piramal Enterprises: "One major reason why MBAs get disillusioned with most companies, forcing them to look for options elsewhere, is the dichotomy they see at two levels: between what the company projects to the outside world and what it really is. And between their personal value systems and the values of the company."

What's missing? A secret that can make the chemistry between the B-school grad and your company work--and the relationship sizzle. Which can only be unlocked by tracking the career of the quintessential MBA, starting with the moment the ragged jeans are exchanged for a formal suit in honour of the placement interviews, and covering every subsequent step: the first job as well as all subsequent shifts across functions, departments, companies, sectors, and even countries.

For, within these migratory patterns lie the specialities of the species that CEOs and their hr managers must understand in order to get the best out of the MBAs in their ranks. What are the factors that motivate the MBA? How does she make her job-choices? What aspirations does she seek to fulfil through her career? What kind of a person is she? And, most important, how can corporates leverage their understanding of the MBA for mutual benefit?

It was to answer these questions that BT launched India's first-ever tracking study of the corporate career of the MBA, commissioning the Bangalore-based market research firm, Gallup-MBA, to conduct the national survey last year. It placed under the microscope the careers of 340 graduates from the 4 IIMs: Ahmedabad (71), Bangalore (75), Calcutta (135), and Lucknow (34). And the sample was chosen to ensure representation from 3 time-periods of graduation: the pre-1980 period (a.k.a. The 70s MBA; 122); between 1980 and 1989 (a.k.a. The 80s MBA; 92); and between 1990 and 1995 (a.k.a. The 90s MBA; 126).

The 4 objectives of the survey, whose scope spans 33 years of corporate India's experience with MBAs, starting with the Class of 65 at IIM-A:

• Identify the different stages in the career of the MBA.
• Understand the motivational factors behind each career move of the MBA.
• Perceive the extraneous factors prompting all the career moves of the MBA.
• Construct a psychographic profile of the MBA as employee.

Created, in the process, was a complete picture of the B-school grad as represented by the crème de la crème among its ranks. Then, to create an action plan for corporates to use this information so as to manage their MBAs for the greatest mutual benefit, we opened 2 additional lines of enquiry. The first was the writings of John Kotter, the Konosuke Matsushita Professor of Leadership at the Harvard Business School, who is, arguably, the greatest authority on MBA careers today, and whose wisdom is parcelled in his 1995 book, The New Rules.

The second source of insight was a series of extensive interviews with Human Resource (HR) specialists in companies that hire extensively from B-school campuses, delving into their strategies for retaining and rewarding MBAs. Combining the learnings, BT presents the definitive guide to mapping--and managing--MBAs in the New Millennium.

Tracking MBA Choices
KOTTER'S RULE. Never stop trying to grow. Lifelong learning is increasingly necessary for success.

Twenty years ago, job-content was the most important issue for the MBA in search of a job. Ten years ago, it was still job-content that mattered the most. Today, the MBA career has been redefined dramatically. It's companies who chase the MBA--not the other way round. And the MBA forges her own future; she doesn't depend on an organisation to do it for her. Yet, job-content remains the single-most important parameter when choosing between competing offers.

And, in a one-two display of continuity, the reputation of the company takes next place in the hierarchy. As for the redundant USPs, they display a sense of deja vu too. No matter which period they come from, the 4 least important factors for the job-seeking MBA are the lifestyle packaged with the job, identification with organisational culture, the extent of the employer's globalisation, and family-related issues--although not in the same order for every segment. Does this mean that the MBA's priorities haven't changed over three decades?

Far from it. For, the sea-change in the context of campus employment between the 1970s and the 1990s implies that the same factor carries a different significance. In the 1970s, even if job-content was crucial, it couldn't be a decider for most MBAs simply because there were 22 times fewer job-offers to choose from. As a result, it contributed more to post-choice satisfaction--or the lack of it--than to the decision-making process itself.

In the 1980s, the choice had widened eight-fold, which truly elevated job-content to a crucial criterion of choice. Because recruiters did not have too many other weapons--other than their name and pedigree--in what was beginning to turn into a battle for talent, they began using this factor aggressively. In the 1990s, however, companies have been trying to woo the MBA with an entire package of benefits--starting, of course, with seven-digit salaries. So, job-content can now be used as a USP to attract the hi-flyer instead of loading the bases with other carrots.

Changed too are the implications of corporate reputation as the second-most important factor. When campus-recruitment was low-key, it was axiomatic that only long corporate pedigrees went a-hiring at the IIMs. With top-dollar compensation and fast-track careers--CEO at 40!--even newbies on the corporate firmament are making their pitches today. Not surprisingly, the reputation of the company--which could be global--is a powerful competitive advantage even though it can't be grown.

Even greater change in the priorities of the first job-seeker is evident in the parameters whose ranks have changed in the hierarchy of must-haves. The most prominent: the opportunity for learning. An increasing number of MBAs now view knowledge- and skills-upgradation as the most important benefits to be derived from their early jobs. Thus, the learning potential of the job and of the company rate 3rd and 4th, respectively, for The 90s MBA. That's a sharp shift from the 7th rank that her 70s' counterpart gave, and the 5th rank that even The 80s MBA accorded. Likewise, greater mobility, thanks to the sociological loosening of family bonds, has pushed location down the priority-list: from 4th through 6th to 9th.

Contributing to the change is the fact that the MBA skills-set is shifting. The commonest specialisation that The 70s MBA brought was marketing, with 25 per cent opting for that subject in B-school. Only 22 per cent offered recruiters a dual-specialisation while 32 per cent were content to be potential general managers. But 38 per cent of The 80s MBAs brought 2 specialisations to the table.

However, The 90s MBA provided a different profile. Accounting for 25 per cent, finance-plus-marketing was the commonest combination, followed by stand-alone finance. But 22 per cent stayed with general management skills. Given the different bag of abilities they entered corporate life with, the career-choices of the different genres imply different priorities.

Moreover, changes in personal and political beliefs also play a role. Elaborates S.P. Agarwal, 52, Director & Head (Organisational Development Practice), A.F. Ferguson, who taught at IIM-A between 1974 and 1983: "In the 1970s, many students were guided by idealism. In 1975, for instance, Bharat Heavy Electricals picked up 15 trainees from IIM-A, all of whom had offers from the private sector. One of our 1976 toppers now works in the Prime Minister's Office. In the 1980s and 1990s, however, social status--and, with it, money--has become a key determinant." Despite the superficial similarities, therefore, the package that the recruiter must bring to the table to hire the hottest brains on campus has changed considerably.

MANAGING YOUR MBA. Make speed and flexibility the key requirements of the job. Provide the recruit with the opportunity to develop the most wanted skills in the world, which assures her that her market value will remain high. The paradox that you must turn into a principle: the more your MBA feels that she is employable elsewhere, because of the competencies she is amassing at your company, the more likely is she to stay.

Explains Ashit Sarkar, 66, Vice-President (HR), Britannia Industries: "Most MBAs are looking for divergent knowledge and experiences so that there are more career opportunities in future." Remember, you invest so much in a fresh MBA--in terms of compensation, training, mentoring et al--that unless she stays on your rolls for at least 3 years, there is little hope of a payback. Adds Pradip Kar, 40, CEO, Microland: "You have to keep your MBA with you long enough. So, make sure she earns, learns, and has fun."

Tracking MBA Careers
KOTTER'S RULE. Move towards the small and entrepreneurial, and away from the big and bureaucratic.

The myth of the migrant MBA has been blown. Contrary to perception, B-school grads are not an undifferentiated mass of join-today-resign-tomorrow job-hoppers. Close to half--47 per cent--The 90s MBAs are still working for the first company that they joined. Not only is that number high, it also represents a significant trend: less than 1 in 5--19 per cent--of The 70s MBAs is still with her original company while just over a quarter--27 per cent--of The 80s MBAs can make the same claim. Sure, the sheer lengths of their respective careers put that figure in perspective: the fewer the number of years spent at work, the lower, obviously, are the chances of moving.

However, what the steady gradient really implies is that the proclivity for switching jobs may not have deepened over the decades. What has shortened, though, is the longevity of the first job for those who do move: from four-and-a-half years for The 70s MBA, through three-and-a-half years for The 80s MBA, to just 2 years for The 90s MBA. Once--or if--she overcomes the 2-year-itch, the contemporary MBA is ready for a long innings.

To understand how she's likely to play it unless you're proactive about meeting her aspirational needs, turn to the track-record of her predecessor who's put in the largest number of years: The 70s MBA. Twenty years, or more, after clutching a briefcase for the first time, 21 per cent worked for the companies that they had started out with--only a little less than the 24 per cent who stayed on with their second employers. If this trend were to continue, a company can expect about 1 out of every 5 hires to spend at least 20 years--long enough to climb from entry-level to the senior-management grade--with them.

Considering that half those who had joined from B-school left in the first 5 years, this implies that 2 out of every 5 MBAs who stay beyond that period will spend at least another 15 years with the company. But this applies to the stayers, not the shifters. The half that were to be found in other companies 5 years into their careers tended to keep moving. So, 20 years on, only 1 in 4 still worked for their second companies. What's more, in less than 20 years after starting out, 5 per cent of The 70s MBAs were in their fifth job, having moved at least once every 5 years.

How closely does this job-track match that of the later editions of the MBA? Naturally, B-school grads, who started their careers in the 1970s, have only worked for an average of 15 years, making comparisons beyond that point impossible. But the striking convergence between MBAs who graduated a decade or more apart reveals that, despite the external changes, the trajectory of their movement across, and up, the ladder is similar. Thus, like their seniors, close to half of The 80s MBAs also switched jobs within 5 years of starting out. Moreover, 35 per cent of both generations stayed with their original companies for 10 years. And 31 per cent of The 80s MBAs could be found in their first companies 15 years later--fairly close to the 27 per cent figure for the 1970s.

The similarities show up among the job-hoppers too. For instance, 30 per cent of The 80s MBAs who switched within 5 years were still with their second companies 10 years into their career. The corresponding proportion among their predecessors? A close 27 per cent. But the picture had changed another 5 years later: while 28 per cent of The 80s MBAs continued with their companies, only 17 per cent of The 70s MBAs had stayed on.

The big question: does The 90s MBA fit this mould too? Since their careers are no more than 10 years old, the scope for superimposing career-tracks is limited. But the half-who-stayed and half-who-went feature of the first 5 years remains intact. So, the MBA's momentum for movement may, primarily, be internally-driven--which also implies that, no matter what companies do, a certain migration of their B-school recruits is inevitable.

Particularly since a common destination is entrepreneurship. History shows that the longer a B-school grad spends as an employee, the greater are her chances of breaking off to set up her own company. In the 1970s, 29 per cent switched to an entrepreneurial track. While the level for The 80s MBA is 24 per cent, 8 per cent of The 90s MBA renounced the managerial role for that of an entrepreneur. Suggests P. Dwarakanath, 51, Director (hr), SmithKline Beecham Consumer Healthcare: "MBAs in the 1990s have become quite comfortable about unconventional career-moves, which is a major change from the 1970s." Unless your company can meet your MBA's entrepreneurial aspirations--not just with challenges and freedom, but also with rewards--you run a high risk of losing her.

MANAGING YOUR MBA. Do not bind your MBA to a traditional progress-path. Collaborate with her to customise a track through the organisation. Most of the restlessness that sends her in search of another company stems from the desire to widen her activity-arena and, thus, move quicker up the experience-curve. Sure, it will mean risks. As G.S. Balakrishnan, 55, Corporate Advisor, GSL, puts it: "It's the company--not the individual--that takes the risks by offering features like job-rotation."

But they have to be taken. Moreover, large corporations, often, have hierarchies that choke the innovative and creative instincts of MBAs, forcing them to look for smaller companies. Re-evaluate traditional structures, and apply concepts like role-based, as opposed to grade-based, competencies. In practical terms, augmenting responsibilities for line-management with those for new initiatives--a critical need for companies--can offer just the motivation that is needed for both retention and high-level performance. Sums up K.V. Rajendran, 46, Head (Personnel), ABB: "One of the biggest strengths of the MBAs is the ability to manage change. Exploit it."

Tracking MBA Movements
KOTTER'S RULE. Do not rely on convention. Career-paths that were winners for most of this century are no longer producing much success to them.

The average mustn't be confused with the individual. Within this broad framework, the MBA who joins your company can be slotted into one of 3 categories in terms of her job-shift strategy. The first--there's 1 in every 6--is the Chronic Job-Hopper: moving compulsively from one company to the next every 4 years or so. While 4 out of 5 MBAs in this genre will be in their fourth or fifth job 15 years after they graduated, the rest will become entrepreneurs.

The second type is the Sedentary Manager--the complete antithesis--comprising the one-fourth who prefer to move vertically up the company they started out with. Crucially, this MBA has stayed on because she has made it to the top, including, in many cases, the corner-room. The third, and largest, section comprises the Settler, who makes a couple of quick moves before spending a long sojourn in a single company.

Want to understand the movement-motivators for MBAs? Remember that they change as the raw recruit progressively becomes a junior, middle, and senior manager--a progression that is matched by changes in her family life too. No matter when they started work, all MBAs look for job-content, career-growth opportunities, and compensation--the last-named is, however, particularly important for The 90s MBA--in the first 10 years.

After that, the job-location and the extent of responsibility both play a major role in determining job-shifts as the learning-curve flattens out, and personal need-fulfilment takes over. Adds S. Chandrasekhar, 41, Vice-President (hr), NIIT: "MBAs crave freedom, decision-making responsibilities, and strategising skills from Day One. They are far less concerned about operational experience. One reason is that the star recruiters on B-school campuses are the consulting firms, which offer astronomical salaries for these abilities."

Your must learn to recognise the impact of their personal lives on their career-choices too. To tap the unique talents of the female B-school grad, for instance, companies must be prepared to accommodate an average of 2 breaks in the early years. Averaging 8 months, these are the periods she uses to bring up a family. Moreover, family-related factors and location play a much more important role in her choice of job than they do for her male counterpart. Thus, companies that are flexible in terms of locations and schedules will be able to capitalise on the abilities of the woman MBA.

MANAGING YOUR MBA. Focus on optimising her career achievements, not on maximising the gains--either for the MBA or for the company--from a single assignment. The latter might offer greater short-term results, but the price may be higher since this strategy won't extend her sojourn at your company, forcing you to make a more expensive replacement. Design your organisational goals in a way that do not require your MBAs to sacrifice personal development for the sake of corporate strategy. Offer opportunities for renewal, through postings across different functions, specialisations, locations, and markets.

Points out Daljit Singh, 44, Executive Vice-President (HR), ICI: "What companies need to do is to provide clarity about career-paths, whereby MBAs can see themselves in expanded roles after pre-determined periods." And harness your MBA's entrepreneurial energy by creating pockets within the company where they are needed. Declares Raman Madhok, 41, Group Vice-President (Human Resources & Organisational Development), Jindal Iron & Steel Co.: "Every company must create opportunities for MBAs to take charge of profit-centres, no matter how small, so as to become intrapreneurs."

Tracking MBA Values
KOTTER'S RULE. Increase your competitive drive. High standards and a desire to win are essential today, and in the future.

You may not know it yet, but the personality of your hot-off-the-B-school recruit slots her into one of 3 value-segments, as defined by the classic Rokeach Value Survey, whose objective is to conduct an inventory of the values of an individual in order to identify her personal goals and the basic approaches she might take in order to achieve them. Understanding the differences can actually help ensure a fit at the hiring-stage, and in offering the MBA what she needs in personal terms in order to retain her.

The classification begins with The Achievers. Accounting for 37 per cent of the MBA universe, they're strongly identified with self-centred values: self-respect, a comfortable and exciting life, a sense of accomplishment, and social recognition. The values that matter: ambition, courage, independence, capability, and broadmindedness. Their lifestyles are centred around social activity, such as frequent eating-out, visits to clubs, and fitness. Dominated by people below 35--who account for 53 per cent--The Achievers are driven by learning opportunities to fulfil their goals.

Less concerned with material success, and more with intangible values like peace, equality, security, and friendship--both within themselves and in the world at large--The Soulful, accounting for 24 per cent of the MBAs surveyed, put a premium on happiness, wisdom, good cheer, love, humour, courtesy, and imagination. Their activities are inward-directed too, such as listening to music and practising yoga.

Tellingly, 60 per cent of the category are over 35, implying that they're closer to their destination than their younger counterparts. Equally significantly, 31 per cent are entrepreneurs or self-employed, and, thus, do not have personal career-goals within a corporate context as one of their drivers. Their priorities are family-oriented, with location and other family-related factors being a major influencer in the choice of job.

The last of the categories, accounting for 39 per cent of the universe, is The Moderates, whose members value self-restraint, co-operation, honesty, logic, obedience, and responsibility over everything else. They spend much of their spare time on hobbies--such as gardening or reading--and are not averse to taking time off from work, perhaps in the form of sabbaticals, to pursue their interests.

With 65 per cent of their numbers coming from the post-35 age-group--and 60 per cent from salary-earners--they clearly find self-development as fulfilling as workplace success. And, like The Soulful, they too accord priority to family-related issues when choosing between jobs. Precisely because the external differentiation between the 3 genres are minimal--and not reflected in career-tracks--understanding which of them a particular MBA belongs to can enable companies to comprehend their motivations, and respond accordingly.

MANAGING YOUR MBA. She is, first and foremost, an individual in search of personal fulfilment. Understand and meet those needs to keep her with you--always. So, appealing to the sense of individual achievement will be more useful than trying to have the MBA meet organisational goals only. Advises Santrupt Mishra, 37, Group Vice-President (HR), Aditya Vikram Birla Group: "It is important to excite your MBAs, and appeal to their sense of challenge by continuously providing them with new stimuli and objectives."

Given the increasing focus of the successful career-person on balancing the home with the office, ignoring the existence of the former will prove short-sighted. Flexitime, infrastructural support, and the accommodation of the individual's imperatives in a dual-career family are systemic solutions that must be provided, but that isn't enough. To captivate the MBA, turn your company into a custodian not just of the individual, but of the family. Suggests Harsh Mariwala, 48, CEO, Marico Industries: "TQM is a good model. It has provisions for improving the quality of personal life as an integral part of improving business results."

Ask not, then, what your MBA can do for you, but what you can do for your MBA. That your IIM grad, whether she's 25 or 45, packs the potential power to deliver the results you want is not in doubt. Your ability to turn that potential into reality, however, will be called into play repeatedly. But, just as performance cannot be made to flow from a spigot, instructions, directions, and orders cannot convert even the best mind into a dynamo of goal-achievement. So, understand your MBA's matrix of needs so as to create the appropriate environment for her to perform.

That's why it is imperative to map the mind, the motivations, and, most of all, the mobility of the MBA. Turn this understanding into a package of challenges and compensation that meet her needs--for stimulation and rewards, for targets and honours, for professional satisfaction and personal fulfilment--and your IIM grad will mesh her internal goals with your organisational objectives with nary a conflict. After all, if your people are the customers of your hr processes, your MBA is the most demanding of them all. You'd better meet your MBA's needs--or someone else will.

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