More on the IIMs

The Economic Times - July 2002

The articles on the Government 'take over' of the IIM directors' appointment and on why alumni and corporate leaders are merely watching this retrograde step without comment, suggested that the reason for this apathy is that neither group believes that autonomy has done too much" for the IIMs -so why bother, if they are going down the tube any way. As someone who has been closely involved since with one of the IIMs as an alumna, a visiting professor and a member of the last Committee for Future Direction, I would like to discuss some of these issues further.

But first, why on earth is the fate of the IIMs such an important topic? Because they are one of the flagships of Indian education, and at some time maybe education from/in India will be as big a business as software; because they have been nurtured with tax payers money; because a swift and silent take over of anything by the Government for reasons of power games must be resisted by Corporate India, because of the old adage "I did not speak up for anybody, and when they came for me, there was no one left to speak for me"; because they have and continue to contribute significantly to the pool of corporate leaders in India; because they help propogate the 'made in India' brand through a sprinkling of successful alumni in senior positions in the overseas corporate world, and their strong presence amongst opinion leaders of leading business schools in the US. As for the alumni, the reason they should get involved in preventing the decline of the alma mater is simply because they all carry the institutions' brand and have benefited from it in terms of personal brand value. A brand is, after all, a short hand for communicating some kind of quality and performance potential, the same way grades are.

Now to deal with Narender Pani's hypothesis that the reasons why the corporate world at large and the alumni are unconcerned is because the IIMs have not proven themselves worthy of it. It is true that much ails the IIMs and I will come to it in a minute. But the reason for alumni and corporate world apathy has nothing to do with that. The answer lies in the realm of the big issue that we have been debating on this page for several months - what does business see as the 'business of business'? Speaking up against a violence inducing chief minister? Agitating over the poor 'India perception' management? Participating actively with Governments in development projects? Helping shape public opinion within the country? Activist or bystander?

The point however is taken that the IIMs have not done much to make themselves a force to reckon with. Of late, they have done little more than hold GMAT type tests for large numbers of people and taught a small number of already bright people. They have not done very much in terms of the other two parts of what a management school should do - research and consulting. There has been very sporadic truly high quality research or knowledge building that has come out of the IIMs. The consulting is very low key and addresses lower order problems. What is perhaps the worst is that during a decade when Indian business and public institutions and Government policy relating to business have gone through paradigm shifts, sea changes, turbulent times, and there has been a lot of groping for solutions, the IIM voice has not been heard at all. As the premier management institutions in the country, and as recipients of years of considerable Government funding, there has been no significant contribution on important and contentious issues like the exit policy or macro economic policy, or consumer market behaviour or privatisation processes. I would have expected the IIMs to have been the natural owners of the Government consulting market, at the very least, and significant partners in policy making. It would have been entirely appropriate and natural for them to play the role of being the bridge between industry and government. Of defining what the new Indian business paradigms are, what the new "made for India" models should be, in a variety of areas. Of contributing rich case material to the rest of the academic world.

So why has this not happened? Because the IIMs, like the average public sector unit is uncompetitive and not punished for not delivering shareholder value. In the case of educational institutions shareholder value is not even defined. It is the usual set of issues of how being a Government of India enterprise constrains operating freedom in a hundred different ways. The obvious solution as the previous articles pointed out, is to privatize these institutions and /or make them autonomous. The fact is that the Government is reluctant to let go. Its answer, whenever the topic has been broached, has been that it has an "emotional stake" in the institution and does not see any reason why it should let go. Can the minister in charge of privatisation be persuaded to put IIMs also on his agenda? And can the board of governors with illustrious chairmen make this happen?

However merely cutting the umbilical chord will not do. It is finding a new set of owners and putting in new governance mechanisms which is the hard part. My suggestion would be for the board of Governors to set up an alumni council at each institute and jointly to work out a robust strategy for each IIM, and a negotiation program with the Government asking for autonomy in exchange for certain obligations of the "shram daan" kind that will be fulfilled.

Coming back to the Government 'takeover' of the IIM director's appointment. I always did think it was a bit of an excess that this appointment had to be cleared by the prime minister himself. I thought he would be a busy man, far too busy to decide who the principal should be of an elitist institution churning out a mere 180 students a year and coaching maybe three times that number of practicing executives. But then, it has almost always, at least in the case of IIMA, been a 'nice touch' formality and the faculty and Board of Governors usually got one of the three people they had themselves short listed as the leader they wanted. Now, however, the formality has become a 'take over'. While both the earlier articles talked about the danger of this, neither mentioned the worst danger. Integrity of the admissions process is the key factor for success of the IIMs. The real fear is that this priceless value of meritocracy, in an otherwise corrupt and nepotism driven country, now is in real danger, if the director is more beholden and accountable to his masters in Delhi than to his colleagues who elected him. Surely we owe it to our children to speak up against this?