The Hindu Business Line : `ISB has set many global benchmarks'

The cool of the morning at the Indian School of Business' sprawling and verdant campus at Gachibowli in Hyderabad gives no inkling of the searing heat that will come later in the day, made sharper by the terrain where rocks radiate the heat. The campus is all that one has read and imagined it to be, lush lawns and well-wooded pathways greet the visitor. The massive main block of the school, with its play of light in the main atrium, meant to impress and inspire awe, does. The facilities... the library, classrooms, cafeteria, recreation centre, well-appointed guest rooms are all top-notch. It's a big day on campus as the Class of 2007 is graduating; the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, is giving away the certificates. A huge air-conditioned tent is set up for the occasion. There is bonhomie around as students, already in the first flush of nostalgia after their one-year MBA programme, are readying to go back to corporate life. Dean Rammohan Rao is busy as after the graduation he has to attend a meeting of the ISB board. Following a presentation to a media team present at the graduation, The New Manager put forth several questions to Dean Rao. Excerpts from his mailed reply:

Are you close to achieving the vision of the founders of the ISB? It has been mentioned that the school has not been able to attract a good number of international students and it is not panning out to be as `international' as envisaged. So, is this a matter of regret or are you comfortable with the response the school is seeing from top-notch Indian talent. How are you planning to induce more foreign students to the ISB? Is there any tweaking of the ISB model followed so far?

Firstly let me say this, that in a short span of five years, the ISB has been able to set many global benchmarks for management education in India. Over the years we have been successful in attracting high quality students, both from India as well as abroad, even as we have been steadily increasing our student intake. In fact, the GMAT scores have been going up with each year and this year the average GMAT score is 707, which is on par with some of the top B- Schools in the world.

India is on its way to becoming a destination of choice for education and the number of applications we get at the ISB seems to corroborate this fact. The number of international applicants at the ISB has more than doubled since last year. In fact, 50 per cent of the international students who applied to us have joined the ISB this year, which is quite a remarkable success for us.

Why are international students important for us? Because we believe that they carry with them the much needed diverse experience to the classroom. Keeping this in mind, we are focusing our efforts on increasing the international pool of students at the ISB. To tell you about what we are doing: We have increased the number of countries, where we participate in the world MBA tour; we are in the process of tying up with international education funding agencies, to support their students to come and study at the ISB; we have entered into an agreement with AIESEC. As a part of this agreement, we have several professionals who will work as interns at the ISB and in the process know the school better. We hope that they will act as ambassadors for us and help increase awareness about the ISB amongst students in different countries.

Another factor which is helping us get more international participation in class are the international students who come from 26 B-schools across 11 countries. We have been able to attract several such students and their numbers are increasing every year.

Yet another factor is that about 25 per cent of the students in the present class have international experience. We believe that through all these efforts, the number of international students will go up further in the next few years.

An awe-inspiring campus for budding managers

The first couple of years of the ISB, the school had top-notch visiting faculty, especially those of Indian origin like C.K. Prahalad, Seenu Srinivasan, Bala Balachandran and their ilk — pretty much the best from the top US B-schools - do you have the same top drawer talent coming to teach at the ISB? Are you widening the canvas by drawing on visiting faculty from other schools / corporates?

I am proud to say that the ISB continues to attract the best of minds from across the top B-schools in the world. We have deliberately chosen the portfolio model for faculty, which has worked very well for us. Since our entire faculty is highly research-focused, the students gain by learning from cutting edge global practices. They know what's happening right now, not from research material that was published some years ago. Currently, we are getting over 100 faculty members from top B-schools across the world, both for our PG programme as well as our executive education programmes. At the same time, we have been steadily increasing the number of resident faculty members.

At present, we have 19 resident faculty members. The faculty consists of two tenured professors, four clinical professors, and 13 tenure track professors. Additionally, four new faculty are joining us this academic year. In addition, we have two long-term visiting professors. We will also have four long-term visiting faculty this year. While we increase our resident faculty numbers, we will continue to have an equal percentage of visiting faculty, so that the teaching at the school is truly global.

We have a rigorous selection procedure and insist on good academic performance with a strong research inclination. Our faculty is required to publish research work in top, globally recognised, research publications.

As a corollary to the above question, now that ISB is six years old, and gained in reputation, you had indicated that you will look to increase resident faculty — how do you propose to do that, especially since you yourself had pointed out that city states like Singapore are proving to be a good draw for top drawer faculty and management education?

We are steadily increasing the number of our resident faulty. We are trying to reach out to faculty in different ways. Many professors, who are of Indian origin and are teaching abroad, are interested in coming back to India and we are trying to talk to such people. We are also in touch with research faculty in various B-schools and invite them to spend their sabbaticals at the ISB. We are in touch with the top 40 schools in each area of specialisation and ask them to recommend their PhD students to apply to the ISB. We also go to global conferences and meet prospective candidates. To attract more senior faculty, we extend support to their research activities. We understand that this is an intense process and are fully committed to attracting the best. It is true that Singapore is becoming a competitor for us in attracting more faculty. We welcome competition and will increase our efforts to attract high quality faculty.

Since the ISB is a wholly privately-run institution, if we were to look at the school as a business entity, how are you faring? Has the school recouped the `investment' made in the assets? Has it broken even? You had indicated that you are able to meet all running expenses and interest costs but would need further funding for expansion?

The ISB has been able to not only break even operationally, but also is able to cover the interest charges and normal capital expenses. The ISB is based on the endowment and services model, modelled on the likes of top global B-schools. In fact, we have been registered as a not-for-profit company under Section 25 of the Indian Companies Act. Whatever surplus funds that we might be able to generate will be used to further research and expansion activities. Since research needs constant funding, we are focusing our efforts in talking to individuals and companies who can partner us in our research activities in different possible ways. Most of our research activities have been funded by the industry, e.g. Romesh Wadhwani for WCED, Goldman Sachs and Citigroup for CAF, Hero Group and TAFE for GLAMS.

Our further plans for expansion include setting up two more Centres for Research, increasing the number of resident faculty, increasing the student intake, increasing scholarships, building one more student village, introducing new programmes, and various others. We will need funding support for all these future plans.

What will this expansion entail? What facilities is it for? For the two new practices you are starting — leadership and change and strategic marketing? How much will this expansion entail. I think you mentioned that so far about Rs 200 crore has been invested in creating the present infrastructure - how much will expansion cost and how will this funding be raised?

Setting up the next two research centres is a part of this expansion plans. Since we are looking at these expansion plans over the next two to three years, it is too early for me to give any details. Again, as I have said earlier, we will be looking at industry support to fund our expansion plans. There are various ways in which our patrons can associate themselves with us — funding a research chair, sponsoring students for PGP and executives for short duration programmes, instituting scholarships, contributing to the corpus, sponsoring live case studies, leveraging the ISB-ready manpower etc.

Over the six years since the school was founded, are you seeing a change in the pattern of the jobs that your students are opting for? While a certain percentage are opting for MNC jobs, one can see that more are opting to take on the challenges of working for Indian-owned companies or even choosing to be entrepreneurs like your students opting for an NIIT-funded project. Will this trend gain pace?

Over the years, we have witnessed several interesting trends in our placements. Some of them are: industry accepting our students at lateral positions — typically companies used to recruit B-school students as management trainees. We were the first to pioneer this trend in India.

It is refreshing to see that companies are now increasingly recruiting women for senior positions and women are also going into fields which have been traditionally dominated by men — for example real estate consulting. Several women are also being recruited for global leadership positions, which means they will be working across locations and departments.

While there are students who wish to work at international locations, the number of students who wish to come back to India and remain in India has been steadily increasing. The younger lot might wish to go abroad and work there, but even they are negotiating with companies to come back to India after some time.

While IT continues to be the largest recruiting sector, many students with IT backgrounds are now moving into different fields. Sectors, such as media, real estate, manufacturing, pharma are becoming increasingly sought after. I believe that with the increasing strength of the Indian economy, our students have become more confident of the opportunities that it offers and I feel that they are now making much more mature and long-term decisions. Companies and students will continue to experiment with newer options, which will make it a win- win situation for all.

Is there any proposal to hike fees? The top-notch facilities created at the ISB, I guess, are to give students a senior manager feeling and pretty much mimic what they would enjoy/experience in corporate life - what has your feedback been on the fees charged by the ISB, from your students and the corporate sector. Benchmarked internationally, of course, it would be the cheapest - but benchmarked against other top Indian B-schools it is much higher, isn't it?

The school is founded with a vision of becoming a world-class institution in all aspects. Keeping this in mind in whatever we do, we strive to make it world class, be it our students, faculty, or the infrastructure. We are proud to say that our facilities are comparable and in many cases, even better than what some other global schools have to offer. The reason being that we want to achieve excellence in whatever we do.

The ISB fee structure is very competitively priced, when you consider what we offer. The major USP of the ISB is our world-class faculty. We have got the best of faculty, whichever field they may be specialising in. The students as well as the school stand to gain from their expertise. If we are to get the best of minds, then we are prepared to spend to get them to teach at the ISB. In fact, the fees and the boarding and lodging costs at the ISB are a fraction of the costs at top global B-Schools. On another note, even Indian schools, that have started the one-year programme, are also charging very close to what we are charging. Our charges are not extraordinarily different from the others.

The corporate sector has been quite dynamic these past few years - Indian groups too are increasingly going global - so, in that context what do you see as the key managerial challenges that young managers will face as they go back to the corporate world and how is the ISB equipping them to face these challenges?

With Indian companies going global and also acquiring companies in other countries and with foreign countries coming to India, the biggest challenge that I see will be to groom leaders who will be able to lead multi-cultural teams. They will need to understand the way business is conducted in different countries.

Yet another challenge will be to be able to understand how to apply global best practices in the local context. I believe that with the prior work experience that our students have along with the diverse peer learning and interaction with the best minds, both among faculty as well as the industry leaders, they will be better equipped to handle such challenges.

I don't think the ISB has got the `official' recognition, I refer to the AICTE affiliation. Of course, the corporate sector recognition is already there; but has the lack of the former recognition been an impediment in any way?

I believe that the ISB has gained a lot of recognition both in India and abroad. We have been established with the vision to be a world-class institution, and we are focusing our efforts to meet all international standards. In recognition of this endeavour, we have had several important people visit us to be part of many prestigious events at the ISB - the then PM of India, and later the President-Elect of India, and more recently our Prime Minister and President George Bush, have all visited the ISB. We believe that this has been possible because they recognise our worth.

The ISB offers a 51-week PGP for experienced professionals and we believe we do not fall under the ambit of the AICTE. On the issue of recognition of the ISB's PGP, we have not sought recognition from the AICTE so far and are in discussions with them on the issues they have raised. We are keen to maintain our standards and independence on curriculum, faculty recruitment, student selection, etc. On a separate note, the ISB is currently in the process of seeking international accreditation through AACSB, a reputed international body that accredits business schools world wide, after following a rigorous benchmarking exercise. Leading global schools like Harvard, Stanford, Wharton and Kellogg are all AACSB accredited.

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`ISB has set many global benchmarks'