COVER STORY
Restructuring IIM-A
Continuted...

A BLUNTED CUTTING EDGE. What is the IIM-A? In December, 1961, under the noted scientist and industrialist Vikram Sarabhai, the IIM-A took shape as a socialism-driven institute, committed to creating professionals to manage the vital sectors of the Indian economy: agriculture, education, health, transportation, population control, energy, public administration, and, of course, industry. However, a couple of decades later, as students seemed more inclined to join the private sector, the IIM-A took on the mantle of an academic establishment rather than a centre for training managers. In fact, Khandwalla pooh-poohs the notion of its being a B-school: ''We are not a business school, but an institute of management.''

This, however, has diluted corporate orientation. Today, the vital differential between the IIM-A and a host of new institutes is the quality of students. While that has helped the institute to establish itself as the preferred destination of corporates seeking fresh minds, it has done little to improve the IIM-A's far-from-hot research and consulting record. ''No world-class academic institution can afford to dissociate itself from world-class research,'' warns A.H. Kalro, 56, professor (production and quantitative methods), IIM-A. For instance, 1996-97 saw the completion of just two large research projects: competitiveness in the textile industry, and computerisation in materials management.

Weighed down by its socialist moorings, the IIM-A's policy on consulting isn't exactly designed to motivate either. Admits a professor with a Ph.D from Stanford University: ''Half of what we earn through consulting goes back to the institute. Add to that the taxes we pay, and we're left with very little.'' And, handicapped by a government directive restricting consultancy assignments to a maximum of 53 days a year, instructors are content to spend time on training. Compare that to institutions like the Harvard Business School (HBS), where teachers get to keep their entire consulting fees, and one can see why most of the IIM-A's faculty isn't inspired to stretch themselves. The consequence: while teachers at global B-schools like C.K. Prahalad of the University of Michigan and Robert Caplan of the HBS can lay claim to contemporary management concepts like core competence and the balanced scorecard, teachers at the IIM-A cannot.

PEDAGOGY OF THE PAST. It is probably the most glaring paradox of management education in India: instructors groom young managers whose starting salaries, very often, exceed their own. All professors at the IIM-A are paid according to the recommendations of the University Grants Commission. For instance, a full-fledged professor's annual pay ranges between Rs 1.60 lakh and Rs 2.20 lakh (excluding earnings from consultancy). Compare that to the average starting salary for the iim-a's Class of 98 of Rs 3.20 lakh (excluding foreign placements), and the reason for academia's holding no attraction for MBAs is not difficult to comprehend.

With an ageing faculty -- 62 per cent of the 74-strong faculty is over 45 years old -- the IIM-A's initiatives of the past seem to have run dry. With as many as 20 of the old guard trained at the HBS in the case-study method -- which seeks to provide a simulated situational framework for decision-making -- due to retire in five years, the IIM-A will have to contend with a transitional void. Worse, its former practitioner-oriented faculty composition has tilted towards academics. Little of the country's best managerial talent gets back to the lecterns. According to a survey of 340 alumni from the four IIMs conducted by Gallup-MBA, less than 5 per cent of the MBAs who graduated before 1979 are in the business of instruction; post-1980, there are none. Clearly, the glamour of the institute, which, even two decades ago, boasted of charismatic teachers like I.G. Patel, (former director of the London School of Economics and former Reserve Bank of India (RBI) governor), Prahalad, and C. Rangarajan (Governor of Andhra Pradesh and former RBI governor) has eroded over time. Perhaps it is its recent problems in attracting top talent en masse to its faculty that has forced the IIM-a to be far less rigorous than its global counterparts when offering tenures to teachers. At US B-schools like Wharton or Stanford, for instance, professors are put on contract for six years. At the HBS, it's an even longer ten years. And only after a review thereafter does he or she get a tenure. By contrast, the probation period at the IIM-A is only a year. Adds Arvind Nair, 42, the CEO of the Rs 107-crore Amtrex Appliances (Class of 79): ''Academically, the faculty is excellent and very committed. But their understanding of industry skills is not world-class.'' And that is not conducive to producing world-class managers.

A CASE STUDY IN ANACHRONISM. The IIM-A's desire to adopt a distinctive teaching methodology -- the case study -- influenced its decision to collaborate with the HBS in its formative years. But although the HBS has changed, the IIM-A still professes total faith in the case study. Insists R.L. Reddy, 24, a second year Post Graduate Programme (PGP) student: ''A case study class implies that you go well prepared for it, which means that learning the theory beforehand is a must. It adds greater rigour, interest, and involvement in the learning process.''

Some former students like Ajay Kumar, 43, CEO, General de Confeteria (Class of 77), swear by the case study too: ''It applies knowledge to real-life issues.'' True, a case study is far more interesting than a lecture. But what if the alternative happens to be a three-month simulated game on marketing in which students are divided into teams, and instructors keep shifting the variables? Indeed, that's just what Sunil Handa, 42, the CEO of the Rs 2.50-crore Ahmedabad-based, Core Emballage (Class of 79), uses in the course on entrepreneurship which he conducts at the IIM-A: ''It is possible to simulate real-life conditions through a business game, which puts more pressure to perform within the given time-frame.'' Warns Pritam Singh, 56, director, Management Development Institute, Gurgaon: ''Business is not just about problem-solving. It needs lateral thinking to generate more efficient ways of doing things.''

And while business still believes that an MBA from the IIM-A is a class apart, it does have some reservations on the curriculum. Explains Ganesh Shermon, 37, the president of the Rs 982-crore Arvind Mills: ''The IIM-A's MBA programme prepares students for the rigours of industry. However, since the institute uses time-tested techniques, there is less of innovation and more of structured thinking.'' Conspicuous by its absence from the IIM-A grad's skill-set, as a result: out-of-the-box-thinking.

CHAMPIONING CHANGE. A think-tank named the Committee on Future Directions (CFD) spearheads change at the IIM-A. The CFD is instituted once every decade to examine existing practices, identify new thrust areas, and propel change. The IIM-A's focus on entrepreneurship in the 1980s and on international management in the 1990s can be attributed to the CFD. But 10 years is a long hiatus between changes on the eve of the millennium. And the CFD hasn't addressed issues related to teaching methodology and research. K.R.S. Murthy, 60, BOC chair professor, IIM-B, who left the IIM-A in 1991 after 17 years to become the director of the IIM-B, believes that his former employers' systems could be the cause of its strategic inertia. ''Its strong systems are a source of weakness as new people find it difficult to bring about any major change,'' he avers.

As a consequence of that rigidity, changes in curriculum are largely internally generated. ''The IIM-A believes that freedom and empowerment are the true drivers of performance and responsibility,'' says Mukund Dixit, 46, professor (business policy), IIM-A. Typically, a faculty member creates the course outline and designs the sequence of topics. The responsibility for ensuring that core topics are kept intact, and that the cases and nature of assignments are a holistic mix of the classic and the contemporary, devolves on the instructor. Trilochan Shastri, 37, professor (production and quantitative methods), IIM-A, believes that this freedom ensures that the institute's curriculum stays abreast of changes in the corporate world: ''Harnessing contemporary issues -- say, corporate governance, divestment, and M&A -- even before they become burning topics in industry is a constant endeavour.'' But can a faculty that does not interact with industry on a regular basis achieve such an objective? A comparison of the electives offered by the IIM-A with those offered by the HBS indicates that the two are fundamentally different. Most of the 25 electives introduced in the last five years by the IIM-A -- such as Derivatives and Current Account Convertibility -- are concept-heavy. Those offered by the HBS -- such as Family-Managed Businesses and Business & The Net -- are skills-oriented. While conceptual soundness is vital, hands-on expertise is imperative in the real world of business.

HOLDING OFF THE CHALLENGERS. Fortunately, the IIM-A recognises the need to change. In 1996, the institute established, under the stewardship of Dixit, the-then chairman of the PGP at the IIM-A, a committee to steer the MBA curriculum through a series of complex changes, de-emphasising the traditional, functionally discrete approach to management, and focusing on a more cross-functional approach. Ashok Korwar, 42, chairman, PGP, IIM-A, expects to eventually get around to doing just that: ''It will need a lot of change internally. Some areas will become less important. And the hierarchy is so flat that implementation will not be a problem.''

But can the IIM-A change in time to face competition from existing schools that have embarked on a voyage of rapid improvement, and new schools like the one management consultancy firm McKinsey & Co. is keen on setting up in association with several Indian and transnational companies by 2000? McKinsey's B-school, after all, is spearheaded by committed change leaders: the Rs 3,771-crore Bajaj Group's Rahul Bajaj, 60; the Rs 32,351-crore Tata Group's Ratan Tata, 61; the Rs 9,004-crore Reliance Group's Anil Ambani, 39; and the Rs 1,872-crore Godrej Group's Adi Godrej, 56. The people developing the curriculum for the school have formidable track-records too: the deans of the Wharton Business School, J.L. Kellogg Graduate School of Management, the HBS, the Chicago University Business School, and the Stanford Graduate School of Business.

The IIM-A's only real response has been an articulated desire to set up an International Management Centre by 2000, which will host a programme on international management. It is trying to rope in faculty from US and European B-schools for the one-year programme. It is also negotiating with B-schools in Spain, Germany, Portugal, Italy, and Chicago (US) for alliances and exchange programmes for students. The globalisation drive is certain to address the issues being raised by critics like Sujit Bakshi, 46, the president (HRD) of the Rs 1,700-crore HCL Corp., who says: ''The intellectual content of an IIM-A student is very high. But all B-schools in India need to provide students with more exposure to a global environment.'' The IIM-A has plenty of models to choose from: for instance, the Northwestern University's J.L. Kellogg Graduate School of Management has a programme titled Global Initiatives in Management (GIM). Every year, students travel to various countries to learn about their business conditions. In 1997, Kellogg students visited 23 countries as part of this programme. Since 1996, Bala V. Balachandran, 60, professor of accounting, J.L. Kellogg School of Management, has been leading a team of students on a 15-day 'Explore India' trip. The field visit comes as the climax to a two-and-a-half month course titled GIM (India). During the visit, students get to meet policy-makers and CEOs, and also study specific industries like pharma and textiles. Points out Balachandran, coincidentally a member of McKinsey's action group for establishing an internationally-oriented Indian B-school: ''We are looking to create a school which is world class.''

Lateral, and not merely incremental, improvements are essential for the IIM-A to not only stave off the challenge from competitors but also to understand and meet its customers' needs. For that, it must first cross the divide between an academics-driven management institute and a business-driven B-school, morphing its mindset to become the latter from the former. It can then adopt, and adapt, the successful strategies of B-schools around the world to pick up a new positioning.

Form an alliance with one or more leading B-schools from the West, such as the Wharton Business School, the Sloan School of Management, the J.L. Kellogg School of Management, or, of course, the HBS. The alliance will give it access to teachers at these institutes, state-of-the-art teaching methodologies, and even the courses offered by those schools, which would be a potent USP.

Take up a stream of short-, medium-, and long-term consultancy projects for corporates in the country, using the knowledge and the learning not only to build up a bank of expertise, but also to modify its course content and bring it in-synch with the practical concerns of business. In addition, these consultancy projects will bring the IIM-A much-needed additional revenues.

Establish strict productivity norms for teachers, quantified in the form of a specified number of publications in national and international journals, research work, and consulting projects. This enforced form of ideating will keep the B-school at the cutting edge of management thought, which is crucial for establishing a reputation that will cascade down to include the students it turns out.

Establish more B-schools under its franchise across the country, which will provide a handy tool for combating competition. By leveraging its brand equity, the IIM-A can eliminate the problem of accessibility and limited supply that currently forces many potential customers to patronise other B-schools instead. Of course, it must secure permission from the government.

Market its expertise in setting up and managing B-schools, especially in emerging economies with a large appetite for MBAs. Its standing as Asia's best B-school will serve the IIM-A in good stead. So far, its efforts in this direction have only resulted in setting up institutes like the Indian Institute of Forest Management, Bhopal, and the Rural University, Jawaja (Rajasthan), fulfilling social obligations.

Start regular MDPs for junior-, middle-, and senior-level managers, including CEOs. This will enable the IIM-A to become a continuous source of learning for corporate India, rather than just a hunting ground for management trainees. Only then will is uniqueness and unsubstitutability be established firmly.

Reorganise itself into a business organisation by, ideally, corporatising itself. That, in turn, will involve appointing a CEO and senior managers -- rather than an academics-oriented dean only -- and diversifying its product line to cater to wider range of customers. For instance, a bachelor of business administration course can be added. A classic model: Wharton's four-year undergraduate programme of business and management education, which is integrated with the arts and sciences, while offering specialised courses in functional fields.

Above all, the IIM-A must position itself as a B-school with global standards, catering to a global market -- the best-in-class strategy for any business seeking to survive against international competition today. Unfortunately, the change process, strangely isolated from the almost frenetic transformations in the management education firmament, is still at the thinking-aloud stage.Like India's business families, the IIM-A has been insulated from change for too long. And while business has been transformed ever since India took the path of reforms, India's best B-school continues to soldier on only thanks to its past reputation. Predicts Kellogg's Balachandran: ''The IIM-A will not be on the world map five years later. It's moving in the right direction, but other schools around the globe are improving at a much faster rate.'' That is just the threat that the IIM-A cannot ignore if it desires to retain its reputation. And stay on top of India's Best B-Schools, 2000.

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