Most analyses of Indian School of Business’ (ISB’s) entry into the Top 20 of the Financial Times (FT) global rankings completely miss the point. Comparing ISB with other institutions that have been around for decades is specious. Debating FT’s methodology is like saying India didn’t deserve the Twenty20 World Cup because the format was wrong! A recent column in this newspaper alleging inadequate assessment parameters, biased alumni feedback, distorted salary data, and cost-to-company (CTC) calculation gimmicks was great analysis but, I believe, flawed, and a case of sour grapes. Rankings are hardly what ISB is about.
In five years, ISB has created an independent, privately funded institution, global in scale and quality, and accessible to all deserving students. We started with two complementary goals: to groom leaders and to provide a platform for global thought leadership. ISB alumni span the globe from Shanghai to Delhi and Mumbai to Vienna, and London to Washington. Those from the first batch are in leadership positions, performing exceedingly well—pioneers who took a leap of faith when the institution was just a dream. ISB changed their professional trajectories, their lives. Its greatest contribution is transforming the lives of students who were deprived of a chance to realize their true potential, either because there was not enough room in our existing institutions or because they could not afford to study abroad.
(Jayachandran / Mint)
ISB has created a level playing field. Recently, while recruiting at ISB, I was proud to see students from the Allahabad Agricultural Institute, Colorado College (US), Gogte Institute of Technology (Belgaum),?Government?College for Girls (Chandigarh), Malnad College of Engineering (Hassan), University of the?West?Indies?and?Wellesley Coll-ege (US). Students from workplaces as diverse as Abhishek Industries (Ludhiana),?Gamma Pizzakraft (Delhi), General Electric, Gulati Hospitals (Hissar), the Indian Space and Research Organisation, ITC, Motorola, SAP, Shri Ram Brick Works (Chandpur, UP), and Unique Transport (Hyderabad). The FT ranking is a salute to these future leaders.
There are many more where they came from. More than 3,000 applied for the next batch; ISB will admit only 480. Are the rest not good enough? Even as the government dithers on the issue of private investment, (mis)regulation remains the norm and even our education minister laments the state of higher education, ISB has demonstrated an equal-opportunity, scalable, sustainable, not-for-profit, public-private model for world-class education. The FT ranking is only an objective,?third-party?acknowledgment.
What is the model? It recognizes that ultimately what students want is to get good jobs or to upgrade their careers. They evaluate programmes by the quality of jobs (salary, company, role) offered. ISB has invested heavily in building a strong placement function, despite traditional wisdom that it is not the role of an institution to find jobs.
Second, educational institutions, including not-for-profits such as ISB, have to be run like an enterprise. Yes, academic integrity rules the roost, but that is no different from a hospital or media enterprise where doctors or editors call the shots. Inevitably, there is a business model. Customers are recruiters (not students, who are the product). ISB is, therefore, focused on building strong corporate partnerships.
The price employers are willing to pay for the product drives the economics. Starting salaries determine what fee a student should be charged. As starting salaries rose, ISB increased fees, without diluting quality—its average GMAT score ranks fifth globally. It could offer more scholarships to students who most need these. ISB’s admissions process is needs-blind and every student admitted has access to financial aid in terms of scholarships or loans. The record on repayment is perfect since most students are able to pay off loans well before term, given the early appreciation in their salaries. Further, the fee charged determines the faculty compensation. The market for high-quality academics is global, as it is for steel, oil, newsprint, bankers and consultants.
The student fee revenues are supplemented by executive education, building further on ISB’s leadership mission. That there is a dire need for executive and vocational education in India is well established— 1,600 executives attended the ISB executive education programmes last year. The surplus is?used to fund expansion and the?much-needed research. For far too long, all management thought leadership seemed to rest with the West. Today, ISB faculty is working on cutting-edge issues relevant to India—Ravi Bapna on 3G pricing and e-commerce, Mudit Kapoor on chit funds, and Kavil Ramchandran on family businesses, for example. It’s simple. Sound economics must drive even not-for-profit education. Sceptics will say this applies only to management education and elite jobs. But I have tested this model in several areas, and the fundamentals hold true, even at lower “price points”.
Yes, subsidy and philanthropy are required at some levels, but we need to break two myths—that forcing institutions to charge lower fees makes education more accessible and that faculty must do public service for peanuts. Both have led to the inability to scale and to get high-quality faculty. These, in turn, will pose the biggest challenges to the government in creating the dozens of IITs, IIMs, and universities envisaged in the 11th Plan.
Perhaps, a few of those could be built on the ISB model. At least, we can try to channel back the estimated $10 billion (Rs40,300 crore) spent by Indians on education overseas. At least, we can pay our faculty fairly and make academia an attractive career choice. Many are replicating this model and are even going global. This reaffirms our ability to build world-class institutions beyond IT and pharma. As a wise friend rephrased a famous Walt Disney saying: “If you can do it, you can make many dream it!”
(Pramath Raj Sinha is ISB’s founding dean, and the founder and managing director of 9.9 Mediaworx Pvt. Ltd. Comment at firstname.lastname@example.org)