Will ISB-Mohali perk up Punjab’s fortunes?

Raising hopes: Model of Indian School of Business campus that is to come up in Mohali.. Pradeep Gaur/Mint

The Financial Times has ranked ISB 12th among business schools worldwide for 2010. Its new campus is being looked upon as a game changer not just for Mohali, but also for Punjab—a formidable entrepreneurial magnet for small and medium enterprises in the region, a skill development resource centre for its farming and manufacturing businesses and a symbol of its intellectual capital.

At least once a month, chief executive Savita Mahajan makes a trip to the site, next to another under-construction campus of the Indian Institute of Science Education and Research. “People ask: why Mohali? It’s an extension of Chandigarh, but then what was Hyderabad 20 years ago?" argues Mahajan, implying that the new school could transform Mohali.

S.S. Sandhu, managing director of the government’s Punjab Infrastructure Development Board, which is entrusted with attracting private investment for infrastructure creation and upgrades, says the B-school and good infrastructure would together help accelerate economic and industrial development in the state.

ISB-Mohali has the backing of four high-profile investors hailing from Punjab: Analjit Singh, chairman and managing director of Max India Ltd; Rakesh Bharti Mittal, vice-chairman and managing director of Bharti Enterprises Ltd; Sunil Kant Munjal, managing director and chief executive of Hero Corporate Service Ltd; and Atul Punj, chairman of Punj Lloyd Ltd.

The Punjab government had been lobbying for an Indian Institute of Management (IIM) campus, but lost out to Haryana. With a little push from Prime Minister Manmohan Singh’s office, the four corporate partners then offered it Rs200 crore of investment to set up ISB-Mohali with four centres of excellence in infrastructure, manufacturing, public policy and healthcare, people familiar with the developments say.

“They (the investors) obviously wanted to give something back to their state," says Mahajan.

Mahajan volunteered to lead the task. From being a founding member of Maruti Udyog Ltd (now Maruti Suzuki India Ltd) in 1981 to launching ISB-Hyderabad, start-ups have excited the IIM-Ahmedabad graduate. “The challenge is to make sure that the Mohali campus is as good as its parent institute," she says.

Her key associates are Madanjit Singh Randhawa, a retired Delhi Police official and resident of Amritsar in Punjab, and Jiten Grover, assistant director for the Mohali campus who is an alumnus of the parent institute.

Randhawa is helping Mahajan deal with the the state government. “A farmers’ agitation stalled the process. Talking to the government and requesting for prompt allotment of an alternate site were challenges that threatened to delay the project," he says.

Grover helps manage accounts and oversee architectural aspects of the upcoming campus. With Mahajan mostly in Hyderabad, the two manage the affairs in Mohali on her behalf.

Specialized training

In a first for an Indian B-school, ISB-Mohali’s four centres of excellence will offer specialized training in industry verticals rather than in generalised functions such as marketing or finance. They would also offer management courses in areas in which they transact business.

“The public policy school will target bureaucrats and other government officials. Students who opt for the programme can be hired in consulting firms, think tanks, multilateral organizations and large banks," Mahajan says.

Each centre has been named after one of the investors—Max India Institute of Healthcare Management, Bharti Institute of Public Policy, BML Munjal Institute of Manufacturing and Operation Excellence and Punj Lloyd Institute of Physical Infrastructure Management.

The new campus will offer 140 seats in its first year and need at least two dozen faculty members. Applications for faculty jobs were invited in advertisements in The Economist magazine.

Simultaneously, Mahajan is fielding recommendations for the posts of heads of the four centres. The director for the institute will be selected from ISB’s faculty at Hyderabad.

For joint programmes at the new campus, the school may soon tie up with US-based Massachusetts Institute of Technology and Harvard’s John F. Kennedy School of Government. Wharton School and Kellogg School of Management, ISB’s associate schools at its Hyderabad campus, will continue to be its partners for general management programmes at Mohali.

Many of the challenges facing the Mohali campus are the same as those faced in Hyderabad a decade ago. Pramath Sinha, founding dean of ISB and founder and managing director of 9.9 Mediaworx Pvt. Ltd, had then found the name of the location of the parent school ridiculous.

“When we first went there, we used to be embarrassed to say that ISB is in Gachibowli. We used to laugh and think if we could change the name," he remembers.

But Gachibowli’s transformation from a shabby address to becoming Hyderabad’s upscale location, with 5-star hotels, a sports academy and the offices of information technology companies, was swift. Top software companies such as Microsoft Corp., Wipro Ltd and Infosys Technologies Ltd flocked to set up offices there after ISB opened. Some 350 ISB students also chose to take up jobs in the city itself, more than the number of alumni in cities such as Bangalore, Delhi and Chennai.

For instance, Shruti Sharma, an ISB alumnus of 2006, thought it made more sense to join her family business in electricity meters than take up a corporate job. Since last year, when she took over the business, her manufacturing unit Riken Instrumentation Ltd in Haryana’s Panchkula district posted a profit of Rs22 crore, up from Rs7 crore.

“ISB lessons in managing businesses and effectively cutting costs can make businesses more profitable," she says.

Attracting business

One of the earliest companies to set up base in Gachibowli was Microsoft, for which the state government asked the institute to part with some of its land. “I immediately said yes," says Sinha. “People today complain that it mars our front gate, but I agreed because I could see the value of a Microsoft research centre next to ISB."

Sinha’s argument echoes in research economist AnnaLee Saxenian’s studies on the Silicon Valley in the US.

Saxenian’s 2006 book, The New Argonauts: Regional Advantage in a Global Economy, explores how the movement of skilled labour becomes a powerful economic force for the development of formerly peripheral regions, as people, ideas and geographies combine and connect into hubs of economic activity. This, she argues, is generating profound transformations in the global economy.

For ISB-Mohali, the number of students graduating will attract companies for placements. “Other things that an institution like ISB can do is boost visitors to the place for seminars, conferences and bring visibility to the state," Sinha adds.

At ISB-Hyderabad’s Wadhwani Centre for Entrepreneurial Development, which offers various short-term modules on business development and managing start-ups, 12 ventures are being incubated in areas as diverse as clean technologies and solar energy to tourism. The centre has also incubated at least 70 local businesses in Hyderabad, refining their business plans, marketing and financial strategies and team building techniques.

Executive director Krishna Tanku says they will have a bigger role to play in Punjab, underlining three sectors of interest: poultry, packaging technologies and precision components.

To cite an example, he says, management of water levels in chicken through a simple device for monitoring pH (a measure of acidity or alkalinity) could help a farmer make more profits in his business. “Our students in collaboration with local enterprises can work out simple things to improve operations. Often, such companies begin with hiring students for consulting projects and end up with job offers," Tanku says.

His centre has already begun collaborating with research and development labs on projects, which could have implications for Mohali. “Linking all the R&D (research and development) institutions in the Knowledge Park in Mohali to develop technology ideas and join our students to develop business plans could be a good way to begin," he says.

But he also cautions that political will is crucial to allow schools to bring about major economic changes in their vicinity. “Look at the Indian Institute of Technology in Kanpur," he says. “It’s been there for 50 years but it hasn’t done anything for the city. It stands like an ivory tower in the midst of a city that has completely died."