Often two questions posed by students in higher education, about to embark upon a corporate career, are these: “Why do blue-chip companies never/rarely consider Tier 2 institutions for recruitment?” And, “Are graduates from the top B-schools really much better than us (Tier 2 schools)?” Important questions both.

Blue-chip companies going to only Tier 1 institutions could be attributed to two primary reasons: first, matching external branding of the blue-chip recruiting organisation with the stock pool of recruits in equally well-known and pedigreed institutions. And, second, rigour. The first level of rigour is the scores obtained by the top ranked institutions’ students in a very tough entrance examination followed by an equally demanding personal interview. The second level is the extremely demanding work and study schedules at such institutions. Tier 2 schools shy away from both rigours.

But are they really better? This is trickier. There are examples of students from Tier 1 B-schools not always being great leaders and there have been great business leaders from lesser known schools too. However, pro-rata, the incidence of CEOs from B-schools is skewed in favour of the top schools.

Tier 1 B-schools are able to enhance the emotionally mature attitude of students better than non-Tier 1 schools through specific courses and a range of out-of-class activities. The responsibility of emotionally developing individuals has rarely been embraced by Tier 2 B-schools leading to long-term negative effects.

Technical and hard skills development are their professed goals. But high performing, culturally developed organisations are increasingly demanding such skills.

Robert Kelley and Janet Caplan’s Bell Labs experiment in the early 1990s discovered that “star performers” have strong ratings on three important networks required for superlative leadership — communications, expertise and trust.

In addition, the star performers were also very good with teamwork coordination, consensus building, seeing things from the perspective of others, persuasiveness, promoting cooperation and minimising conflict. Neither academic talent nor IQ is a good predictor of on-the-job productivity but emotional intelligence is. All these are “soft” skills that build “soul factor”.

“As you become more senior, all you do is relationships.” With senior positions being increasingly filled by younger people, it is essential that these relationship skills are built in before they leave the education phase of their lives. In an article in the Financial Times , Prof Adam Grant states that B-schools need to teach soft skills to MBAs.

Long lasting soft skills can only be built on the bedrock of self-awareness. This is where aspiring B-schools need to broaden their vision.

Self aware leaders

After the collapse of the US economy in 2008-09, there was a serious rethink at Ivy League institutions about the social and ethical implications of their management curriculum which was churning out superbly capable business leaders but without a soul. The soul factor is often missing from B-schools. There is a growing demand for self-aware leader-managers. But where are they?

The soul factor comes from a deep sense of self-awareness. However, often in tightly scheduled business management programmes focussing on hard skills, this finds little favour. The consequent loss is being felt across corporations, industry, the nation and beyond.

We posit SF = IQ x EQ x SQ where IQ is Intelligence Quotient (verbal comprehension, perceptual reasoning, working memory and processing speed), EQ is Emotional Quotient (self-awareness, self-regulation, motivation, empathy, and social skills) and SQ is Societal Quotient (encompassing concern for intra- and inter-society harmony, foundational value systems, and active environmental defence).

We propose a multiplicative equation to explain SF as it prevents a low score on one element being offset by a high score on another and helps in equally focussing on all three aspects of a student’s development.

In India, EQ and SQ are where we have fallen short. These are two factors which are critical for an individual’s long-term success. A growing number of businesses now realise that they are mere trustees of the earth’s resources. They also realise that profit-making is pointless if it is not underpinned by a sustainability-seeking world view. Educational institutions which build individuals in this direction would be the preferred destination for blue-chip companies and society.

Future leader-managers must develop sensitivity to multicultural groups, concern for the environment, and foundational values. To speed ahead, an organisation must have high emotional maturity in its human resources.

Everything else will become commoditised except the soul factor of employees. This quality will flow from what these employees experienced as students.

Ultimately, the soul factor will matter more than all the hard skills one possesses. This is possible only when B-schools blend the hard and the soft.

“We have a responsibility to teach the skills that matter the most”. Business schools’ original purpose, according to Jennifer Petriglieri, was to “professionalise management for the good of society”. Courses on self-awareness encourage students to reflect. Reflection is a skill most often not well-developed in managers. The process of reflection, introspection, developing insights and learning is a four-step mantra, often overlooked.

“Thinking of emotions is like learning a new language”, according to Animesh Agarwal, alumnus of Stanford University where a “touchy feely” course called “Interpersonal Dynamics” has been running for the last four decades and is the only course which is recommended by most alumni to prospective students in helping them decide on Stanford.

The way forward

In modern higher education, there has been a marked departure away from the integration of ethics, social sciences and self-awareness toward an overwhelming focus on the hard skills. Analytics, finance, marketing, operations and strategy excellence form one-half of the story.

Future business leaders must pursue the other half comprising humility, humanity, empathy, humour and hope, all of which need a high degree of self-awareness and soul. B-schools are doing rather fine in one and not so well in the other.

Kalra and Mathew are Professors at Great Lakes Institute of Management, Gurgaon