Out-of-the-box thinking is need of the hour

Innovation is the key to success, said Dr Vijay Govindarajan, professor at Tuck School of Business, Dartmouth, US, and chief innovation consultant at GE, exhorting Indian educationists to encourage out-of-the-box thinking among management students. “Our innovation gap is huge. As management educators, what are we doing to help youngsters close the gap? What are we waiting for,” he asked. Govindarajan was speaking at the 20th Annual Management Education Convention of Association of Indian Management Schools (AIMS) in collaboration with Welingkar Institute of Management Development and Research on Wednesday. “Nurturing Thought Leadership through Management Education” is the theme of the three-day convention (August 27-29) that will see luminaries like industrialist Kumar Mangalam Birla and entrepreneur Kishore Biyani of Pantaloon Retail address the gathering.

Govindarajan said that India has the ability to become the world leader and this can be achieved through lateral thinking. “We need to encourage our MBA students to come up with out-of-the box solutions,” he said.

Stressing upon the need to innovate instead of merely aping successful policies, Vijay said it is high time the country re-invented its curriculum. He advised MBA students to become entrepreneurs. “We need to look at ways to reinvent our management education and bring in new, innovative concepts,” he said. Citing the example of Tata Motor's small car project Nano, Govindarajan said, “By launching the Nano, Tata Motors has is trying to convert non-consumers, comprising those who currently use two-wheelers, into consumers. This is out-of-the-box thinking. This is how we must think if we want to establish ourselves as a global leader,” he said.

To attain this, he said, one must set unrealistic and ambitious goals. “Transformation begins with high ambition. Tata Group set before itself the uphill task of getting the two-wheeler users to switch to a four-wheeler, he said. While managing the present and selectively forgetting the past, “we need to create the future,” he said.

Uday Salunkhe, Welingkar director and AIMS president further reinforced the need to have an “innovation overdrive”.

K V Kamath, managing director and CEO of ICICI Bank Limited and president of
Confederation of Indian Industry (CII), stressed the need to constantly look back and forward in order to design the future.

“For our country to progress, we need foundation building in terms of people development and management schools have a huge role to play in this. The industry is rooted in the past, but the future beckons us. So, are we preparing a course for the young demographic cut? Have we geared ourselves for the 10% growth paradigm?”

Kamath said that the country’s booming job market will soon require 10-15 million. “Is our our education system is responding to that stimuli,” he asked. “Ten years from now there will be a dramatic change in the real world. Will there be a corresponding change in our education system?”

Saying that the country requires thought leaders and a “renaissance” in vocational education, Kamath said that he will push the agenda with CII for having active academia-industry collaboration. “This is the way forward. We need to have co-creation of curriculum along with academia right from the kindergarten to undergraduate to vocational to professional education,” said Kamath.

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IIMs see no slowdown in pre-placement offers

The premier Indian Institutes of Management (IIMs) expect a 25 to 50 per cent increase in pre-placement offers (PPOs) this academic year. This, even as other prominent B-schools anticipate a 25 to 30 per cent drop in placements this academic year.

The IIM PPO process begins every July and goes on till final placements conclude in February. This academic year, too, the offers came from prominent investment banks and consulting firms. IIM Calcutta (IIM-C), for instance, has received 33 pre-placement offers (including 15 international offers) so far, and expects the numbers to go up by 25 per cent over last year, when it received 90 PPOs. So far, most of the renowned global consulting giants including McKinsey & Co, Merrill Lynch, Morgan Stanley, Lehman Brothers, J P Morgan Chase, Goldman Sachs and Barclays Bank have offered PPOs to students at the institute.

“I don’t think the economic slowdown have any will impact on the best B-schools in the country. The final placements, too, will be smooth,” said Prafulla Agnihotri, professor in marketing, and chairman (career development and placement), IIM Calcutta.

IIM Indore has so far received 21 PPOs and expects the numbers to jump 50 per cent. Last year the institute received around 63 PPOs. “The 2009 batch, which underwent summer internship this year, is more experienced than the previous batch,” said a placement committee member at IIM Indore.

IIM Kozhikode, on the other hand, has received 17 PPOs so far and expects the offers to go up to around 90 this year. Consumer goods companies like HUL, Coke and ITC, and financial firms like Citibank and JP Morgan have already committed themselves to the institute.

IIM Bangalore did not disclose the number of PPOs it has received so far, but said it expected a good increase owing to the tremendous rise in the number of companies that visited its campus every year. IIM Ahmedabad, on the other hand, did not wish to disclose the number of PPOs it has received.

Compared to last year’s figures, though, the initial figures indicate a dip in the growth percentage. “Even if the PPOs remain at the same level as last year, we would be happy. Considering that most international recruiters are from the banking and financial sectors (hit by the US sub-prime crisis), we do not expect an enthusiastic response even at the final placement stage,” said a prominent IIM official, who did not wish to be identified.

Nevertheless, the IIMs have decided to pull up their socks and are looking at hosting new companies on campus. Many institutes have decided to invite more diverse firms such as smaller private equity players and wealth management firms. Unlike most years, the Banking and Financial Services (BFSI) sector is not expected to be the best performer on campus this year.

The FMCG, trading and services sectors might take the lead instead. “We know the US economy is going through a rough phase. We have told our students that consulting and investment banking is not the only option one should look at. They should also look at marketing,” adds Agnihotri of IIM-C.

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IIMs prefer students with work experience

KOLKATA: In line with what has long been a trend across global B-schools, the IIMs are looking at more experienced candidates for their MBA programmes. These students, the institutes claim, bring in important attributes like out-of-the-box thinking and communication skills to the table.

At IIM Lucknow (IIM-L), the total number of students with work experience in the 2008-10 batch is 274 out of the batch of 307 or 89.25% against 50.41% last year, when 122 out of 242 students came with some experience.

“Experienced students change the entire dynamics of learning,” IIM-L director Devi Singh told ET. This time around, at IIM-L, 16 students have experience of less than a year, 67 between one and two years, 82 students between two and three years and 83 of over three-and-half years. Only 33 students have no work experience.

In IIM Calcutta’s 2008-10 batch, 40% of the batch have work experience of up to two years and 23% above two years, aggregating 63% against 60% in the 2007-09 batch.

“We are paying increasing importance to people with work experience,” said IIM-C dean (programme initiatives) Saibal Chattopadhyay. “Ideally, only 15-20% of an MBA class should comprise freshers. Though we have no intention of cutting down drastically on the number of freshers, over time we intend to gradually move towards a far higher proportion of experienced people.” He added, “Feedback from recruiters suggest we should have more students with some degree of experience. However, more than three years of experience can be a problem, as those students are difficult to mould.”

At IIM Bangalore, it’s the same story. Experienced students account for about 75.3% of the 2008-10 batch compared to 71.8% in case of the 2007-09 batch.

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Change in IIM fee structure unlikely

NEW DELHI: The RC Bhargava committee, appointed by the government to look into the overall functioning of the Indian Institutes of Management, is unlikely to recommend lowering of fees in the institutes.

After visiting various IIMs, Bhargava said on Monday that the committee had finished its tasks about administrative system of these institutes as well as excellence.

There have been repeated demands that IIMs should lower their fee. Bhargava, however, said the committee is of the view that fees should be finalised by the boards of each IIM. "What is the use of the board if we have to decide on the fee structure," Bhargava said. "The basic thrust of the committee is to study and suggest the roadmap on how to create excellence and expand management education," he said.

He also said, "The IIMs are giving the required training to the people no doubt. But we will examine if they need to expand their activities and perform a larger role to impart required skill to people and enhance the human capital."

IIMs have already hiked their fees from this year. IIM-Ahmedabad had announced an increase of 175% in the fees of its first year post-graduate programme from Rs 2 lakh to Rs 5.5 lakh. Similarly, other IIMs have increased their fees.

The review committee would submit its report next month, Bhargava said. The panel is studying the functioning of IIMs and will recommend the changes required in view of the demands of the growing economy. The committee will make also make recommendations on how to attract funds from abroad. "IIMs have to raise funding from outside. In the US, the B-schools get funding from corporates. The IIMs can look for similar things here," he said.

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Private equity lures B-schools

Special lectures, courses planned for aspiring entrepreneurs.

Venture capital (VC) and private equity (PE) firms appear to have caught the fancy of business schools this year. Be it for creating awareness among aspiring entrepreneurs to raise funds, or merely understaning the operations of a VC/PE firm, management institutes have increasingly begun interacting with the industry.

While some have announced setting up of a PE club for aspiring entrepreneurs, others are planning courses, special lectures and seminars to create awareness about the booming sector.

Students of the Post Graduate Programme for Executives (PGPX) at Indian Institute of Management, Ahmedabad (IIM-A), will go through a course on PE in their last term between December and February.

The course, spanning 10 sessions, will be taken up by Arun Duggal, vice-chairman of International Asset Reconstruction Company.

Arvind Sahay, chairperson, PGPX, IIM-A, said: “Apart from number of venture capital and private equity fund companies queueing up during placements, the subject has also gathered interest in the wake of students opting for entrepreneurship.”

IIM Lucknow’s (IIM-L) Alumni Association, will organise India Private Equity Forum on September 19 at Mumbai. “This is for the first time that the institute has initiated such a forum. The forum will witness industry experts talk about VC/PE funds to alumni and aspiring entrepreneurs. If successful, we intend to continue conducting such forums in future,” said a member of Alumni Committe (Alcom) at IIM-L.

The Finance Club, a student run body at the Indian School of Business (ISB), is all set to come up with a Private Equity Conference on September 6. A unique PE event , it aims to provide the students an opportunity to gain greater understanding of the PE activities in India.

B-schools are also putting in effort to train students in raising funds. K J Somaiya Institute of Management Studies, which has been witnessing close to 10 per cent of students opting for entrepreneurship, has an e-cell which organises PE meets, workshops, VC colloquium, entrepreneurs meets (including some by the alumni), and guest lectures.

“The outside groups of VCs and PE managers and entrepreneurs have wholehearted and willingly supported the cause and in fact have become mentors to the new students. Students have the spirit of entrepreneurship, but they need the funding, mentoring and handholding for some time. The focus on PE/VC funds is important to give the necessary practical shape to the dreams and business plans,” says Suresh Ghai, director of K J Somaiya Institute of Management Studies.

Private equity and venture fund clubs function as the interface between students and financial institutions and regulatory bodies by organising various events.

Finance clubs across B-schools bring private equity players and industry leaders to the campus with an aim of lending a platform to students and faculty to interact and discuss the opportunities and challenges that lie ahead in the field of private equity and venture funds.

Recently, PGP students of IIM-A set up a Private Equity and Venture Capital club to help students get hands-on experience by involving PE/VC players from India and abroad.

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