By | Abhijit Bhaduri | Founder, Abhijit Bhaduri & Associates
The MBA degree was created for a different world. It was the mid-sixties when having an MBA first began to catch the imagination of the middle class aspirants. It was the guarantee of a good life. But that was also when the average tenure of companies on the S&P 500 was 33 years. By 1990, organization’s lifespans had shrunk to 20 years. By 2026 the lifespan of a company would be down to 14 years.
About 50 percent of the S&P 500 will be replaced over the next 10 years. Already yesterday’s aspirational employers like US Steel, Dell, and the New York Times have been replaced by Facebook, Under Armor and Netflix.
Meanwhile in the Business Schools…
The employers have to rely on shortcuts to decide which degree best prepares someone for a career in business. The MBA program was the perfect answer. XLRI – India’s oldest business management school was founded in 1949. IIM Calcutta was the first of the IIMs to be set up in 1961. Ahmedabad, Bangalore and Calcutta were the three cities which had IIMs. As industries flourished, so did the B-Schools.
The two years of business education shot up the worth of any graduate in the job market. Employers could not hire enough of the MBAs. The B Schools started to “ration” out the MBAs. The students would choose which firms would be given the Day One status to come to offer jobs to the graduating MBAs. Soon a pecking order would emerge in the early nineties. It was the Big 4 consulting companies or the Investment Banks that would get the pick of the lot. Heads of HR would declare achieving Day 1 status on Campus as their biggest achievement. The students got more ambitious. Some campus offered Day Zero a day before Day One for campus placements.
There just were not enough B-Schools that stamped the three magical alphabets – MBA on to eager students. There are at least 5,500 B-schools in the country in 2016. The entrance examination became so skewed in favor of analytical thinking that 99% of the MBAs in most B-schools were Engineers (some B-Schools do admit students with a more diverse background). There was only one problem.
The MBA program is still teaching students to draw still life whereas the world outside is moving at 24 frames per second. It is time to transform the MBA offering.
The world is changing – rapidly
The curriculum of the B-Schools has remained painfully slow to adapt. While some professors do have prior work experience, it is hard to stay current without engaging deeply with the industry. The industry-academic link has to be an active one. The professors have to run several consulting projects where they can involve the students.
The Assocham report finds only 7% of the MBAs employable. The B & C category B-schools are doing the industry and the students disservice. Around 220 B-schools have shut down in 2014-15 years in Delhi-NCR (National Capital Region), Mumbai, Kolkata, Bangalore, Ahmedabad, Lucknow, Hyderabad, Dehradun etc. and at least 120 more closed shop in 2016. “Barring a handful of top Business schools like the government run IIMs and other few, most of 5,500 B schools in the country are producing sub-par graduates who are largely un-employable resulting in these pass-outs earning less than Rs 10,000 a month, if at all they find placements.”, says the report.
The market forces are telling people that the B-Schools are having their “Kodak Moment”.
What can be done
Here is what needs to happen.
- Admission process: In a global world where a lot of work gets done in virtual teams, being able to communicate and influence others is a large part of the job. Screening stringently for language skills is a good start.
- Professors: Every professor will not make a great industry consultant. Every practicing manager does not make a great professor. Creating a buddy system between industry practitioners and academics will help in skill transfer. Think of open talent systems. Invite those with 2-3 years of post MBA experience to teach.
- Soft skills: Most of the rule based work will get rapidly automated. The B-Schools have to prepare the students to succeed in a world where the Knowledge Worker has to become a Relationship Worker. Amazon has a job for Alexa (its voice controlled AI based system). It is called Lead Alexa Personality Writer.
- Interdisciplinary teaching: The professors zealously guard their academic silos. The professor teaching Human Resources cannot teach digital tech or finance or strategy. It would be seen as stepping into someone else’s territory. The world outside is totally interdisciplinary. The finance professional has to understand the implications of the salary hikes on morale and retention. Google has teams of coders and anthropologists and psychologists working together to create products that are adopted better. Time for academics to go boundaryless.
- Continuous Learning: The shelf life of a degree used to be five years according to the Deloitte shift index. It is closer to 3 years today. The MBA program should become more like a license that must be renewed after 3 years based on a rigorous examination that must be designed by practitioners across industries. The team that designs the examination must work with the professors to update the curriculum. The alumni network can be leveraged for this.
When we buy a car, we have no problem in going to the petrol pump when the tank goes dry. We have to have the same mindset when it comes to business education. We have to rethink the MBA offering. It must stand for what it claims to be – Master of Business Administration and not Mediocre But Arrogant.