First day address to management students @ ASB

Value of Management Education

Till fifteen years back, I held the view that management education is not a value adding endeavor.   I have changed since then and today find the question quite redundant. However I will share some ideas on what adds value to management education. I am making an assumption that management education’s aim is to equip its students to become effective problem-solvers.

How would you approach the following problems?

Which car should I buy – a Mitsubishi Lancer or a Honda City?

How can we prevent events such as the Wisconsin gurudwara killing?

Should a new dam be constructed at Mullaperiyar?

Should the interest rates be lowered to boost production at the cost of incurring inflation?

How do I double the enrolment % at universities?

As a Project Leader how do I handle schedule pressure?

How do I compete with Walmart in my retail business?

You will note that the problems span a variety of domains – business, governance, family, society, economy, education and so on. However, traditionally management and management education got associated only with business. Success in every domain is governed by management and leadership imperatives. Hence I use the term “management” to encompass all of society and its ecosystem.

Value-add # 1: Enlarge the scope of applicability of management principles.

Challenges facing society, government, technology, environment and business change with every generation, say, every twenty-five years. Coping with these changes requires that development of leaders should co-evolve with the changes. This, in turn, translates into management education co-evolving with changes in societal behavior patterns. The current challenge can be described as the strong interrelatedness of the above institutions. When we say that life is getting more and more complex, we mean that life has become a web of interconnections rather than remaining as discrete disjoint entities. Look at the way the internet has changed our banking habits, our travel habits, and our reading habits. In such a scenario, problems do not arise in silos and problems do not appear with headings proclaiming to be an HR problem or manufacturing quality problem or customer retention problem.  There are just problems. Hence problem-solvers have to be first trained in the art of problem discovery and diagnosis. The solution part then is simple, mostly available in commoditized form. There are time tested system archetypes to guide solutions.

Value-add # 2: Look for interconnectedness and go behind the front-facing layer

Answers to the questions posed above can not be black and white statements. They are complex because there are multiple stakeholders each with his individual needs which may conflict with those of others. There could be constraints such as cost ceiling or governmental regulations. The relationship among the elements may not be linear. Many elements can not be quantified and yet they play a vital part in arriving at an optimal solution. Management education has a course titled quantitative modeling but I have not come across a course titled “qualitative modeling”.  We are all trained to be rational and logical while real life problems contain feelings and emotions. Look at consumer behavior – while buying a cupboard do we ask for sheet metal thickness and surface finish of spray painting? We decide to buy a brand by the look and feel of it. A marketing strategy that does not factor in the emotional aspects is bound to be incomplete and not produce the desired results. Even the best numerical simulation software needs a model of the problem as input. The model has to be as close to reality as possible. The best model in the world can not equal reality. Qualitative methods help in building a realistic model incorporating all stakeholders’ needs and constraints.

Value-add # 3: Don’t get obsessed with quantification, qualitative factors are equally important

Behavior is dynamic and context dependent; population control methods applicable to Kochi will not work in Lucknow. What worked in 1970 may not work in 2012.  Solutions are context dependent. I learnt that measures to make a private school in Trivandrum as the best school in the district will not work for a government school in  Mumbai. In this connection the case study method of management education is useful in providing a context. Management education should aim to prepare the students find an optimal solution for the given context. There is no unique solution to any problem in the world. Design of a solution is nothing but choosing the optimum solution from among a set of solutions. Good leaders, unlike mathematicians, do not look for global optimum solutions valid for all time. Good leaders also know when to exit from a chosen line of solution and make mid course corrections instead of being bogged down by ideological pig headedness.

Value-add # 4: There is no “the best” solution, only an optimal solution for a given context

 An electronics engineer would always use spectrum analyzer as a tool irrespective of what he is looking for. Often this results in mutating the problem to suit the tool and the resulting solution becomes subnormal. I consider a problem as an animate being which is crying to communicate with us but our ears have been muffled by our favorite models. For some management consultants every problem is a linear programming problem or a regression problem depending on their favorite tool or depending on what software package is installed in their computers. Instead we should make the problem as the master and the tool as the slave. The problem should drive the model and not the other way around. Else we will end up offering technologically brilliant solutions to some problem not the problem for which we have been hired. I have case studies based on first hand experience to validate this. An organization won a contract with a leading pharmaceutical company against stiff international competition because it did not mutate the company's  business model to suit a popular ERP software. It also took into account subjective criteria such as the level of cooperation among the units of the business arising out of inter-departmental politics. There is also a case study of a company losing a project with a leading automobile client because it had excessively concentrated on the technology without getting an insight into the business environment.

Value-add # 5: Beware of pre-conceived models

Specialists tend to be biased because of their passion for the domain. Technical people look at issues from their viewpoint. Bureaucrats look at them from their own viewpoint usually from a compliance viewpoint. Students of management need to be versatile so as to look at issues from an external vantage point. They should have the ability to see the forest and not just the trees, to discern the underlying music behind the chirping of birds. For the current times, versatility is more relevant than specialization. Gartner research has predicted, for example, that 7 out of 10 jobs in the IT sector will not require one to do programming or other technical work. They will be front facing roles closely working alongside the customer. The consultant needs to quickly understand the domain. This necessitates cultivating the fine art of asking stupid dumb questions upfront. Management education would be valuable only if the students are trained to seek business benefits to customers than just providing the best possible technology solution. A candidate’s CV that mentions expertise in Java or Oracle or specialization in HR or marketing will not attract the attention of employers. CVs that are likely to attract attention will read like
 “I increased customer retention in xxx telecom company from 22% to 37%” or “at yyy automobiles I brought down production costs by 17% by identifying and eliminating non value adding activities” .

Value-add # 6: Aim toward versatility

Herbert Simon, a Nobel Laureate, gave a life cycle model for problem solving process  as a linear sequence of activities. He was in fact formalizing the reductionist mindset of those times driven mostly by the industrial revolution paradigm. Our spiritual heritage repeatedly emphasizes cyclical models of development. A doctor discovers information by asking questions to his patient. He in fact enlarges the scope of the problem. Thereafter he performs a series of diagnostic tests to narrow down the options. He then prescribes medicines. The process does not end there. If the diagnosis is inconclusive he goes back to make more discoveries. If the prescription does not work he goes back to more diagnostic tests. Students of management education should be familiar with iteration and recursion exercises that are part of the life cycle of problem solving. Otherwise a consultant will not command the respect of clients if he just throws a set of recommendations at the client, collects his fees and walks away. A consultant should constantly keep looking for feedback. Only feedback will drive him toward the vision and mission objectives. It would help in mid course corrections. He should remember that the trajectory from problem origin to solution destination is not a straight line but a curved path, involving adjustments all the way. It applies to business, it applies to governance and it applies to personal career development.

Value-add # 7: Problem solving is a circular activity

Good leaders avoid knee jerk reactions namely temporary fixes that fail and actions that have side effects; they look for sustainable responses after drilling down the structure of the problem. For example, tightening gun control laws would be a knee jerk reaction to purposeless shooting incidents. It would create fresh problems because guns would be sold clandestinely. If guns are not available, the perpetrators of crime would use other weapons. If people are frisked before entering places of worship, criminals will choose other venues. Hence one needs to understand the problem at its structural level. Would a good leader sack his sales person at Shimla because the sale of ice-cream there in December had gone down?

Value-add # 8: Avoid patch work, look for sustainable solutions

It is obvious that good decisions need good inputs. Good decisions also need good decision making processes. In the context of management education, we need to revisit the horizontal segmentation of course content such as HR, finance, marketing, and systems. We should do bits of all these throughout the program and offer elective specializations based on different verticals. Yale and Loughborough (U.K.) seem to have adapted this approach. The latter has modules on Science & Technology too. Employers such as British Aerospace are happy to hire these students.

Value-add # 9: Rearrange content by applying core mandatory topics to specialized verticals

Globalization does not mean just having offices around the world and boasting that one’s topline comprises multiple currencies. It means, for example, raising capital from Singapore, sourcing raw material from Africa, getting designers from India, setting up manufacturing facilities in China and marketing the products in Europe. Thus an understanding and respect (not mere tolerance) for diverse global cultures is necessary for a successful business. Indian IT companies have learnt that HR incentives that work in India will not work in China, Walmart realized that pillow cases meant for USA will not sell in Germany. Suppose that a client belongs to a society where equality is the norm and as a result people at every level feel empowered. Assume that the service provider belongs to a society that is strongly hierarchical and decisions are made only at the top layer. If these parties do not understand the underlying cultural traits, misunderstanding is bound to occur. Management education will be valuable if the mindset of students is conditioned to get an insight into different cultural traits without being judgmental about them. Absence of an inclusive mindset leads to tensions and even terrorism.

Value-add # 10: Get an insight into different global cultures

We may not yet have an Indian style of management. But there are already several management principles attributed to Indians. Value of management education will be enhanced if we reflect on these. The ethical business doctrine of Nitin Nohria, Fortune at the bottom of the pyramid by late CK Prahlad, Purposeful business by Indra Nooyi, Strategy alone will not produce results, execution matters by Ram Charan are some examples. Several lessons from successful anecdotes and unsuccessful anecdotes described in texts such as Mahabharata are worth consideration; progressive steps in negotiation described by sama, dana, bheda, danda translate to cooperate, yield some territory, divide and rule, hostile take over. Several Indian business models have worked well – Amul and Mumbai Dabbahwalahs have caught the attention of management educationists, there are others such as Fabindia worth looking at.

Value-add # 11: Wisdom can come from inside too!

Vocabulary is not just a cosmetic façade. The correct vocabulary sometimes dismissed as jargon, drives the right mindset. The transformation needed for coping with the current time has been captured in the change in business vocabulary as shown below:

From                                                    To

Logical                                                 Intuitive

Analysis                                                Synthesis

Expansion                                            Conservation

Competition                                        Cooperation

Domination                                          Partnership

Limitless growth                                  Stable development

Command & control                            Consensus

Efficiency                                             Effectiveness

Output                                                 Outcome

Information                                          Relationships

For example, the number of hospital beds per 1000 people is a measure of output while quality of health is a measure of outcome. Each row above can be expanded into a full essay / case study. According to me your education would add immense value if you can clearly see the distinction between the word pairs given above.

Value-add # 12: Words are often pregnant with powerful messages

I wish all of you a very purposeful and value added stay at ASB.