The MBA bubble bursting in India?

Around two years ago, I had blogged on whether the MBA placements would see a permanent downturn or not. While that post was aimed at the Tier I Bschools, it seems the general scenario has worsened since then. The original post is at  http://iimaexperiences.blogspot.in/2012/02/iim-placements-2012-summer-of.html

Since then, the debate has heated up locally http://www.firstpost.com/business/slowdown-bites-spend-rs-9-lakh-on-an-mba-earn-only-rs-4-lakh-981611.html and globally ( http://management.fortune.cnn.com/2013/11/08/mba-remorse-business-school/) . While placements do seem better at IIMs, that is at the cost of Tier II/III/IV Bschools which struggle to place even 50% of their batch. In this context, the welcome address to the IIM Ranchi Batch of 2013-15 http://iimranchi.ac.in/wp-content/uploads/2013/06/Directors_speech.pdf was interesting, in the sense that it highlighted the declining MBA prospects, and implicitly conveyed the message that 'Don't be complacent'.

While the traditional 'MBA only' fields of investment banking and management consulting are picking up in recruitment, that does not offset the increased batch size, and competition from 1year MBA students in India and abroad, especially the Ivy league types who now try for jobs in India.

So bottomline to those deciding whether to go for or pursue MBA in 2014-16, think thrice.

Management lessons from Madagascar 3

Yesterday, I watched the third part of the animated film franchise Madagascar, and it was clean wholesome 3D entertainment totally worth the price of admission. Just having finished 2yrs in bschool at IIM Ahmedabad, my mind was still on MBA mode in the background, trying to dissect and glean management lessons from all and sundry! I did not watch the first two parts of the movie but that did not detract from my understanding. A brief review of the film as on the blog http://vagabondmind.blogspot.in/2012/06/madagascar-3-europes-most-wanted-review.html states Our famous quartet(of circus animals who have escaped from the New York Zoo)-, Alex the Lion (Ben Stiller), Marty the Zebra (Chris Rock), Melman the Giraffe (David Schwimmer), and Gloria the Hippo (Jada Pinkett-Smith) are in Africa. The penguins have left them and taken off in a plane to engage in some gambling. The heroes swim their way to Europe to get to the penguins and fly back home. Plans fail and events start unfolding at a frenetic pace. Animal control chief Chantel DuBois wants Alex’s head on her wall. The New Yorkers somehow manage to convince – Circus Zaragoza who is touring Europe in a train. We meet a few new characters - Vitaly the Tiger, Gia the Jaguar, Stefano the Sea-lion and others.  The story moves forward with the train moving to Rome and then to London. The action at London is a treat to watch in 3D with excellent pyrotechnics and some breathtaking acts. Finally, the New Yorkers get back home. But are they happy? For a more complete review, read http://en.wikipedia.org/wiki/Madagascar_3:_Europe%27s_Most_Wanted

The background now set, the lessons in brief are

1. Fake it till you make it! The escaped quartet had taken refuge with the circus under the pretense of being circus animals. Leveraging that credibility, they persuade the other (real) circus animals to try the often risky acts that they conjured up.
2. The power of passion:-As Alex talks about later in the film, the famous Canadian circus Cirque do Soleil that uses humans instead of animals in their performances, cannot compete with the real animals when it comes to passion. Hence, he inspires the animals to give their 101%.
3. Getting buy in for change:-Vitaly the tiger represents the old guard-trusty, competent yet resistent to change the way things have been done! However, Stefano and Gia the Jaguar reassure him of his importance in the scheme of things, stating that they will not move ahead without him. This makes him agree to try out his old act(jumping through loops again!)
4. Business process reengineering! This is quite evident in the new way the circus acts were reengineered. After all, if one keeps on doing what does not work, that is insanity. Having Vitaly use non flamable hair conditioner instead of the inflamable hair oil to jump through flaming loops, is another example of the same. 
5. The importance of integrity:-Though the penguins are able to foil DuBois' plan to capture Alex, the latter is forced to confess that the four of them are just zoo animals trying to get home, disappointing the others who feel used and lied to, as they had blindly trusted the four and done risky and new acts. While the film ends on a good note, in real life often, one lapse of integrity proves expensive in the zero tolerance envt of organizations. So 'fake it till you make it' is fine for internal use, but not necessarily for external use, as the Yahoo CEO Scott Thompson found out to his expense after being fired for inventing a non existent credential.

I am sure that academics with much more time for research/thinking than I do, will come out with a case study/session on this, but this is all I could do! Adios! 

Why we need border-less interdisciplinary thinking

In a speech at IIM Calcutta, Dr Mashlekar(ex DG, CSIR) made some interesting points that triggered some further thinking. While I reproduce those salient points below for the sake of brevity, I would suggest reading that entire speech in full there(http://nif.org.in/Mahatma_Gandhi_Memorial_Oration). His points were

1.  Explosive advances in adjacent sciences are shaping up the future of core disciplines. New paradigms of “seamless sciences” and even “seamless engineering” are emerging. 
2. We work and think in isolation. The examples are
•  Mixing is a challenge in diverse disciplines. In the case of astrophysics, one is concerned about the mixing of the interior of stars. In mechanical engineering, it is combustion. In environmental sciences, we are concerned with mixing and dispersion in the atmosphere. Oceanography deals with mixing and dispersion in oceans. Chemical engineers are concerned with mixing in chemical reactors. Physiologists look at mixing in blood vessels. Bioengineers are interested in mixing & aeration in bioreactors. Geologists deal with mixing in the mantle of the earth. All these diverse mixing phenomena occur on diverse time and length scales, differing by several orders of magnitude. However, these disciplines rarely benefit from each other, and discovery & rediscovery of concepts and ideas is common place.
• Scientists from different disciplines have turned to the study of the human mind.  These days one meets engineers who work on speech perception, biologists who investigate the mental representation of spatial relations, and physicists who want to understand consciousness. And, of course, psychologists continue to study perception, memory, thought and action. However, I have not seen a meeting of these computer scientists, linguists, neurophysiologists, anthropologists, engineers, and so on! Understanding of mind cannot be made possible without meeting of minds of all of them.
3. We need to ensure that our mind moves through diverse disciplines in a borderless way. The ability to correlate and link the non-obvious can lead to major breakthroughs. In the management context, an example is creation of  flexible management structures by using the concepts of self-organisation in chemical and biological systems- van der Waals model of Management

Prof JR Varma made a similar point in his Mar-11 IIM Ahmedabad working paper on improving MBA(Finance) education, where he sought the integration of conventional investing theory with neurology, economic history and other relevant disciplines. 

And in fact, the oft-cited fact of 'MBA broadening one's horizons/perspectives' can be attributed to the exposure to cross disciplinary functions and hearing those diverse perspectives during class discussions. But these are incremental innovations so as to say. 

The biomimicry(adapting insights from Nature to create business models) is in its infancy in India, with a few salient exceptions like Prof Anil Gupta, who devised and named an entire organization inspired by the honeybee behaviour. And in the field of organizational dynamics, this has ample potential, given that there is ample debate today about the role of and purpose for existence of corporates.

Where familiarity breeds contempt-the case of IT engineers

At the outset, let me clarify my immense respect for those engineers/other graduates who have helped India's ITES companies become world beater. As someone said, success is not an accident, and the ITES industry success is due to excellent skills in management, control, quality, knowledge management etc. While these functions are often siloed, the professionals working in those companies, if having done the work sincerely, do pickup those skills especially disciplined approach, domain expertise etc.

Then why is the apparent bias against them, when it comes to MBA admissions? Read any interview of the Admissions Director/faculty of Bschools, and they all stress on the need for diversity. Now, diversity can be viewed through many lenses(education, gender, experience)-but it is usually boiled down to rejecting male engineers who have worked in ITES. Granted that they make up a large chunk of the applicant pool, but it may be too much of a logical stress to argue that consequentially they think alike, and so should be weaned out.

I must confess to an initial bias that engineers in ITES switching to MBA, were self selecting themselves out of the rat race there, and so 'were not the cream'. This is true for freshers(especially IIT/NITians) where the 'creme de lae' often study abroad or pick up plum jobs post engineering. However, despite that, the ITES guys and IIT/NIT freshers often 'kick ass' the collective derrieres of the others. Is this a reflection of their quality or indictment of the education system is hard to say, but needs some thinking.

Still, I conclude this rant by stating that before passing value judgements on a 'typical' IT guy turned MBA aspirant's CV, we should understand the person's work domain(support/coding/sales..), client work(which sectors), work appraisals(awards, promotions) and quality(say 1yr+). It is difficult because appreciation letters are dime a dozen,something like some army medals/service awards in the USA. But that does not deprive us of the responsibility of taking the time to understand the 80:20 rule to shortlist CVs etc.

Few Business systems see genuine goal subordination

Today, I opened a systems textbook and noticed the idealistic definition of system where a set of interrelated and interdependent sub systems, work together to achieve a common goal. And perchance if the sub system's individual goal(s) conflict with the overall goal, then the overall goal takes precedence. For instance, if the company's goal is to achieve maximum profitability, then it may conflict with an Operations Goal of 100% stock-in/Sales goal of 100% client coverage/Production goal of 100% capacity utilization. But it is naive to expect the respective functional heads to bend over and take it, just because of an idealistic sense of honour. After all, if their function underperforms, they can kiss their bonuses/promotions good bye, specially in the pay for performance mindset of today. Hence, controls and systems are set in place to ensure that sub units act as per the invisible hand to achieve overall goals. For instance

• Top Down Planning:- This ensures that sub units can only plan and execute within the overall boundaries laid down by management, consistent with superior goals
• Profit Centre and Transfer Pricing:-Profit Centre approach can ensure individual sub unit optimization, but may affect overall margins. That is why transfer pricing sets ground rules and dispute resolution for interactions between units, to ensure that the squabbles do not harm the organization too much.
• Cross Selling:- An acid test of the extent of integration between sub units, is the extent of cross selling done by SBUs. This metric is important especially for banks. Hence, encouraging cross selling will improve peer interaction, and boost overall profitability.
• 360 degree appraisal:- If peers have a role in appraisal, then atleast more civil behaviour and bother for overall goals will ensure.

But the best laid plans often fail. Top down planning without a strong internal audit function, often remains a paper tiger. Transfer pricing can be tweaked by smart management accountants, or rendered useless by faulty data/analysis. And cross selling is not always in the SBUs control, and may lead to misselling/fracturing the primary unit client relationships. These things are a reality of life in organizations, and how they are handled often determines 

Why politicans should make good managers

Those who have studied organization structure(right from Robbins onwards) agree on the pivotal role of organizational politics. To rise to the top level, besides competence and luck, one does need a very good ability to navigate organization politics. In both India & USA, several politicians have strong business interests/affiliations, which often predate their entry in politics. Indian examples are the Reddy brothers of Karnataka, Maharashtra sugar barons, Dhanbad coal mafia, Goa ministers, Jindals etc, while USA examples would cover a large chunk of the House of Republicans. So why does this happen? Below are some ideas

• Sociologists hold that where people need to divide limited resources among themselves, they start politicking to maximize their share. Whether the arguments be rational('economics'), spiritual('religion'), social('democracy') or by force('muscle power')-politics is the common strain. This limited resources fight is true for organizations as well. 
• The trend in India is to build a coalition of friends(and a few enemies) to keep out the common foe. These coalitions navigate several minefields, but are the way ahead in India atleast. Even in organizations, the manager needs to coordinate various functions, and have them work in harmony, or atleast work on the coalition model of acting on common minimum program(organization goals). Even outside the organization, the tendency to form alliances is now growing beyond the technological world, and entering areas like auto(Renault-Nissan) and pharma.
• By playing the divisive politics card of caste/region/creed etc, politicians instinctively know how to divide and rule. This skill would serve them well in organizations, where under the pretext of 'segregation of duties/maker checker concept', different sub units are designed to check and neutralize each other's over reach.