So how will Placements 2015 look like: Assuming CAT takers of 2012

Each year, over 200,000 aspirants in India take up the Common-entrance-test or CAT to be eligible for applying to some of the best management institutions in the country.

What have been the trends that are important and related to the growth of management education in India?

- More IIMs: there are 13 of them and probably more would open soon

- All IITs, NITs, and FMS - institutions that were taking other/own entrance tests are now taking scores from CAT for selection purposes

- Multiple campuses of other private institutions (IMT, NMIMS, IMI, etc) and increase in the intake of other b-schools like S.P Jain

- Maturity of the market forces, wherein MBA is now a more focused and proper decision and not any longer the natural step after engineering or graduation

I would like to separately mention another factor adding to the above list - that of the economic conditions and its relevant effects in businesses and organizations who used to be the star recruiters in many b-school campuses.

A sound mind will always ask a question - Is there something wrong with management education model as a whole, and how can we look at forecasting whats probably going to happen for all the passing-out grads in the coming years?

The answer to whether the MBA education model is passe now is - NO. Definitely it no longer represents the growth story of education sector in India any more, but it still re-produces some good talent into the corporate sphere, contributing to the sustainable growth in various sectors. There has been a obvious change of perception and people taking up management education have now accepted the hard realities - that one doesn't come out of an MBA college and buy a Ferrari. Is there a better option other than MBA for creating industry ready professionals? I don't think the outdated undergrad programs are anywhere near to answer that question/problem.

So can we forecast atleast, to ensure that we know what would happen to the grads passing out of MBA/management institutions in the coming years? How will placements 2015 be if we consider profile of people taking up CAT 2012? The following math attempts to answer these questions

Let us consider that in the present economic scenario, it will take more than 8-10 years to see brilliant growth across the world economies (even that's a big Bet and being nonsensically bullish), not much will change in the next 5-7 years, in terms of job opportunities and job-designs available for MBA grads (I am not only taking the top 10 or 20 b-schools, but also the major chunk of good b-schools in India)

To calculate the probabilities, I will be using the Bayes theorem (for multiple probabilities attached in this case)

Formula:
P(A1 | B) = [P(A1)* P(B|A1)]/[[P(A1)*P(B|A1)] x [P(A2)*P(B|A2)]]

Let's define each probability:

P(A1) - Probability of more freshers getting offers

P(A2) - Probability of more work-exp people getting offers

P(B|A1) - Probability of Economic Slowdown/Job-Market Slowdown when there is a probability of more freshers getting jobs

P(B|A2) - Probability of Eco-slowdown when there is a probability of more job offers for people with prior work-ex

The rough segmentation of Freshers:Work-ex for CAT 2011 was about 30:70

Which also would be the representation across the better b-schools around the country.

Let us consider the batch-composition as the ultimate factor to calculate the probabilities of more freshers or work-ex people getting offers.

Therefore,

P(A1) for people who took CAT 2011 will be - 30%

P(A2) will be - 70%

Let us assume that when there are more freshers who get offers, the probability of economic slowdown will be less, and more for the situation wherein the work-ex population get more offers.

Which means,

P(B|A1) - 20%

P(B|A2) - 80%

So, the probability of more freshers jobs when there is a consistent probability of economic slowdown expected over the next 4-5 years, will be denoted by P(A1|B)

Therefore,

P(A1|B) = (0.3*0.2)/[(0.3*0.2) + (0.7*0.8)]

= 9.6%

Case 2:
Let's now consider that for CAT 2011, there were 70% freshers and 30% work-ex aspirants, thereby changing the P(A1) and P(A2) respectively, keeping the probabilities of "B" for A1 and A2 consistent.

So the new P(A1|B) = (0.7*0.2)/[(0.7*0.2)+(0.3*0.8)]

= 38.8%

So the math tells us that there wont be good amount of jobs designed for freshers available to MBA grads in the coming years (About 10% probability), considering that about 70% of CAT applicants will have prior work ex.

The above is only an indicator. There is bound to be argument that this calculation at best throws out only the probability, and hasn't considered other factors like - industry requirements, innovations across certain industry and the speed of the same, technological advancement and its affect on irreversible losses of various job designs, etc. The good thing is that the scope to calculate proper trends and probabilities for this can only improve from here.

The top IIMs - Are they suffering from ELOC?

The IIMs are the high watermark of management/professional education in our country and each year thousands of aspiring applicants (with aspirations to join some of the best organizations in the world) try to get a seat into these coveted institutions, to join the illustrious list of alumnus who have represented Indian Inc across the world.

Amongst the early IIMs, the 3 well established ones are located in Ahmedabad, Bangalore, and Kolkata. Three more were built - Lucknow, Indore and Kozhikode.

Now are you hit with an idea I was - that the first 3 are better than the next 3? Has your brain started to already compartmentalize the institutions into two different categories already based on some bias and perception, which is introduced by means of mere grouping of these into two different sentences?

The IIMs were an initiative by the Govt of India (Min of HRD) to produce professional talent required for the industry and to support the growth of this country in sectors other than agriculture.

Similar requirements also gave birth to the IITs - the respected brand across the whole world. Alumnus of IITs are present in some of the top leadership positions in organizations the world over.

The perceptual issues that have plagued the IIMs since the time there was a huge rush amongst Indian students to get an MBA/PGDM qualification, has (according to me) kind of rubbed into the establishment themselves.

In the last couple of years, the number of IIMs have grown to 13 (7 more added to the already existing 6), and somehow there was well documented resentment and doubts across-the-board when these new ones were launched.

Questions like - "will the IIM 'brand' now fade away?" or "what will be the quality of the person passing out of No1 and No13 when compared by an employer?" started doing the rounds and were lapped up by everyone. Even the applicants who want to get into an "IIM" for a better life (money, status, etc) started magnifying the same issues through discussions, blogging, etc.

So have the first batch IIMs (the first 6) become a victim of "external locus of control" by being forced to compare themselves within their own franchise?

Over the last few decades, B-school Ranking systems have always ranked the fist 3 IIMs (Ahd, Blore, Kol) as Nos.1,2,3 respectively. The rest of the 3 IIMs came in the top ten at most time but not necessarily in the first 6 positions. There were other b-schools that made applicants wonder whether really some magic happens at the top-3 IIMs thats missing in the next 3.

No one asked "why?" is there such a thing existing.

Similarly, when the new IIMs came in, a very similar story unfolded. Various private institutions were ranked way above the new IIMs and these new ones were placed much lower than the first 6.

Which meant two things:
- Perception of these IIMs suffered as they were new and therefore definitely couldn't produce the same pedagogical strength of the first 6
- There is nothing called as the IIM brand as there are clear divisions amongst the early 6 and the latest 7 institutions

I believe that the ELOC is something that has hurt the IIMs badly and definitely the governing bodies of these places are responsible for the same. A system like the IIMs exist in a place like India and not the US, that has representations from IIM faculty or research collaborations at all times. In those Universities (like Harvard, Univ of Penn, etc), there is a clear sense of belonging to the top school, which isn't present for the very stakeholders at the top IIMs. They actually represent a system or a franchise, and that's something that creates a dissonance.

The whole system of ranking IIMs against each other, perceptual difference amongst alumnus and students, etc have created the kind of environment wherein this identity-crisis has flourished. Over the next decade, this can worsen if left to the whims and fancies of people who would love to have the status-quo maintained.

There is no reason for IIMs to be ranked or be worried about who is No.2 or No.10. The trouble is that the current selection procedures also point towards bias in selection of the IIMs by applicants through the present system. What's the future for the new IIMs? Will they be always branded as the also-rans who didn't have the might and power to be counted amongst the established elite? Are the first 6 IIMs elite and not to be touched? Why can't they look at making this a collaborative system and make "IIM" an actual brand (and not "IIMA" or "IIMC" as separate brand names)?

It has to begin with breaking away from the status-quo that's been forced upon them by us (who else?), and then they need to figure out ways to collaborate so that the same pedagogy, the same kind of standards, the same kind of research, faculty, and value is added to each student who joins any IIM. Even the 14th one, if and when its inaugurated.

The Curious case of bad-spiral in B-school's existence

Ever wondered why so many b-schools who are languishing will not be able to become better anytime soon?

I keep interacting with most of them (obviously alongside the best in the domain) in order to figure out whether any of these struggling schools have any thought or understanding of the reasons as to why they are in a downward spiral and if there is a remedy for such a sorry state.

One of the major issues that these b-schools probably have never thought of - is the negative word-of-mouth publicity that is implemented by their own students, which snowballs into very strong negative perception affecting their admission numbers, placements etc each year.

Let us understand what really happens:

1. B-school starts operations and pushes the Marketing/Admission team to get applications for the MBA/PGDM program

2. Marketing/Admission team resorts to tried and tested and failed methodologies right away (these are not some of the best talents in India anyways). They buy databases, call people without permissions, visit cities for education tours and flash GD-PI selection processes, dole out "discounts" in the name of scholarships to "non-scholars", and care a damn while trying to get the seats filled

3. Since the failed methods are used, the perception of the b-school starts on a negative as some of the better students (or students aspiring for a good program) view this as another program started by some X person , thereby quality applications never show up on the radar.

4. While application numbers from the entrance tests databases don't show up, the b-school gets restless and then goes to some of the most remotest areas in India (places like the North-eastern states, Bihar, J&K, Jharkhand, East UP, etc). The "rags to riches" story through something called as MBA is doled out with additional spice. These places generally have dormant decision making kids, and more active parents. So somehow parents are convinced that their sons and daughters will do good (with "city" jobs).

5. These students are then the representation of majority in such b-schools and somehow the fees are collected and batch begins


Other than external ecological factors that will take the wind off the sail for such b-schools in due time, the following happens in the 2 years after these students get admission:

A) They are trained by the B-school in "written" and "spoken" English. Special classes dedicated to personality development are conducted (sometimes in regional languages so that these kids understand)

B) They are trained on using Internet and all technological advancements that are related to the Internet. At the end of these sessions and (armed with the Laptop) at the end two years, these kids are now empowered to use Social network, identify forums for MBA, etc.

C) When placements season arrives, these kids don't get placed through the internal process (mostly due to them being un-employable in any good starting role available to other grads from other MBA programs), and all of a sudden these kids realize that they will never have that dream life which was told to them during the "Admission Seminar" at their respective places

D) Armed with access to internet and filled with disgust, these kids then take on the cyber world, writing some of the most demeaning things about their b-school- the lies, the vacant promises, the bad faculty, no placements, etc. across social networking websites, MBA forums, chat sites, and wherever they feel they can vent their anger

Due to this, in the next admission season, the college again fails to get any response through the normal procedure (through notifications, etc) and resorts to visiting some new places for "fishing".
Since the cyber-world will be filled with amazing negative feedback about the college, people with access to broadband will definitely get to read those while they Google the college. So the only hope will rest on people who don't have broadband access and have no understanding of a career etc.

Thanks to "India Shining!" (sarcasm), there are still areas that fit the description for a good market for such b-schools. Areas that are still pretty backward, and will give anything for a career in the cities.

However, the same story plays out post the admission of this batch as well.

The b-school has now successfully invested and contributed to their very own, home-grown army of students and alumni who are proactively bad-mouthing the college across every possible medium.


What happens in the corresponding year?

The enrolments drop. All of a sudden I get to hear b-schools running a batch of 120 with about 20
enrolments. Given that their yearly budgets on admission activities/scholarships will be driven by the numbers of previous year (again a huge mistake, but will take this topic later), one doesn't need to be a rocket scientist to figure out the way things will go from here. Downward Spiral!!

Two years back, I had predicted that over 1500 b-schools will close in India. To a certain extent, they have. The others have still survived due to the way they got admissions from rural India and kept on the working capital intact. But things are changing faster. Accessibility of broadband and usage of mobile internet will be comparatively growing faster in the coming 3-5 years. With that being the premise, where will these b-schools go??

Is there a way out for them?

Definitely. But that includes things that they wont listen to or even do. They will need to close down their current programs. Re-establish everything from scratch. Get large funding, excellent faculty, use the best mediums available to communicate and interact with the best applicants in India, select only the best, get accreditation that matters, design pedagogy that will be world-class, and then see magic happen in about 5-7 years. Every b-school has gone through stages in their growth process.

Imagine a Hit Bollywood movie. Do we go for a 3rd category production house, with no stars, amazing music, and no special effects? We don't. Because we know that the quality of everything in a movie matters, and therefore people are ready to pay a premium and watch these movies in Multiplexes (and spend more on pop-corns than the movie tickets).

So if 3 hour movie experience needs to be world-class, then what about a 2yr program that will lead to someone start an excellent career??

Don't b-schools think anything on this line? Is surviving another day a part of their DNA now? How do they feel to know that their very investments are their biggest detractors and enemies?

WAKE-UP, and CHANGE.

The Case of inertia and insolvent b-schools in Management Education

There are many concerns of MBA/Management institutions in India who are classified under the 2nd or 3rd categories - going by the way they fail to measure up to any standard of perceived quality or their inability to get students for their programs.

The Biggest problem for these institutions is - PERCEPTION.

It's something like a shadow for these colleges - they can't shake it off anytime easily and it will always stick around.

So how is it even possible to help these institutions get better or top-grade themselves??

In the past 2-3 years that I have been interacting with these institutions, there are a few things that I have noticed as the bottlenecks which stopped them to do anything "good":

- Lack of vision: The top team or the owner have no vision to become better, while missing out the point that only by being better will they survive and earn more money/revenues

- Blindly copying others: This is the "herd" behavior that keeps things like "education tours" alive. Surprisingly, they are yet to figure out that by copying activities that others do, they "place" themselves into the same herd or group as others, and run into the same cliches every year

- Underestimating the ecology: Cocooned inside their own institutions and geographies, they have this self-defeating idea that everything will work out if they manage to get more local students interested in their college, and sometimes they believe that like some other bschools, they will easily get to convince people with less knowledge on MBA, jobs after MBA, life after MBA, etc.

- No measurement of what works for them and what not: There is a very famous saying by a person which goes as - "I know that I have wasted half my money this year that I invested in marketing, but the trouble is I don't know which half". This is the exact situation for these b-schools. They don't know what really worked and what didn't. They don't know if 10 visits to a city yielded anything in the short-term as well as long-term. Will the visits-to-be-made be lesser next year since they made 10 visits; or will that remain the same?

- They don't have a plan for their batch improvement: Every year, their batch needs to be profiled like every other b-school. The trouble is that the profiling never happens correctly. There are no answers to questions like - What are the contribution %ages of CAT/MAT/XAT/Other exams in your batch, and what are the ranges of each of these scores? Also, what are the new regional representations in your batch this year, and have you lost out on any specific representation from last year?(Diversity)

It is a fact that the ecology of the domain and the trends in related fields will affect the survival of the b-schools.

Some questions that these b-schools need to seriously attempt to answer are:

What happens if CAT is conducted for more than 2 months? What happens if CMAT is conducted all round the year?

What happens if the state gets more broadband access in home PCs, mobiles, and internet cafes?

What will be the impact of the usage improvement amongst local population who can now search and find better colleges and information of life after MBA?

What will happen to the kids who would join you and then don't get jobs after 2 years? Will you not train them properly enough to empower them for using Internet/social media? Will they then not have the power and the intentions to bad-mouth you everywhere they can? How will you ever stop from that happening? Will that kid be not responsible for making your college lose applications even before they applied?

What will happen to your college's local population when local population start applying to other colleges outside your city and state? How will you handle newer colleges with more money power coming to your state, or worse, multiple campuses of established names in your city/state?

What will happen if there is a steady decline of the representation from CAT/MAT and other exams in your batch along with the %ile scores and you are not aware of it? How will you feel when you will get companies to come and they will go back empty handed without recruiting?


After trying to answer the above, they should then ponder upon the following:

How will you feel if you can place all your students into excellent profiles in good companies through your placements process? Will that not be something great?

How will you like it, when your own students/alumni will contribute to getting more quality admissions and placements? Wont that be a dream come true?

How will you like it, when your college can increase fee to accommodate better faculty, infra, corporate programs, and still you get some of the best people to apply to you year on year?

Over 140,000 applicants in CAT this year will again be of people with work-exp and the availability of seats for them are less - when you compare the number of institutions that they feel are available to them to apply.

Can't they be one of those (perceived) better quality institution for these applicants?