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You have been associated with the Indian management education for over four decades now. What are your key learnings during this period?
I came back from the US in 1967 after completing my doctorate at Harvard University and joined IIM Calcutta as a faculty. Since then I have seen an enormous interest and appetite for management learning in India. While I was teaching at the institute and giving lectures at local chapters of various associations, I noticed that people wanted to learn the latest about marketing management, financial management, human resource management and so on.
However, there was a frustration about implementation because if you notice our economic history, we were a highly controlled Licence Permit Raj until 1991. So a lot of good ideas that Indian managers had could not be fully utilized by them because of being limited by these controls. But the moment liberalization began in 1991, they started using those ideas.
Since then, the industry has become highly competitive both within the domestic market and in imports or in foreign companies investing here. People could join multinationals that were growing here in India as well as go abroad or get posted world over. So the management in which we invested in 1970 and 1990 had paid off handsomely for India. Within that, public sector companies were expanded with big investment going into steel, oil, power, equipment etc.
The other feature I can recall from that period is that the interest in management was not confined to industry or the corporates but also extended to the government and that’s one of the reasons I was awarded the Padma Bhushan as I led these management ideas and people in many government committees followed it. The government realized that it needed to restructure the public sector operations so telecom, banking etc. went through a transformation.
The third distinct feature is that management principles were also applied to the social sector and the civil society. As numerous NGOs were growing, they realized that the key difference between them and the commercial sector was that they had to sustain with limited resources and budgets and hence they needed more efficient processes and management. Gradually, management has now extended to all the fields like arts, health, tourism, entertainment etc. People are aware that whatever is being done can be done better but for that they need strong management ideas.
What do you think is the state of management education as of now in India?
When I began teaching, there were only two management institutes in the country and sceptics believed that there was no future of management education in India. But I rejected this idea completely. We then threw it open to the public and private sector and it gradually picked their interest. The consequences that followed were usual – an explosion of private management institutes happened and now there are thousands of them.
In a country like India, quantity comes first and then we think of improving quality so now that there are thousands of them, there is a dearth of good faculty, resources etc. But that doesn’t stop management trained people to being employed at different levels. Graduates from the best of the institutes go into multinationals, banking, consulting and there is also the large manufacturing industry which employs them. Graduates from the institutes at regional level are being picked up by medium and small industries. There is a highly segmented market from the internationally qualified MBAs to locally useful MBAs who may not be very proficient or sophisticated but know their basics well. It has reached a level where every field we know of, needs management ideas and graduates and the newest in the wagon is our film industry.
After completing your doctorate at Harvard, what made you come back to India?
The decision to come back was made long before I even left the shores of India. Around 1957-60 while I was studying BSc. in Statistics at Loyola College in Chennai, I started thinking about my future. I had studied a fair amount of history, politics and even economics. My analysis was that in the period from 1857-1947 there were great selfless leaders who sacrificed their lives for a cause – Indian independence. We also inherited very good institutions during the colonial period, the civil services, judiciary, legislature etc. and we had all these in place. Then we got a great and elaborate constitution of our own. In spite of having all this, I felt there was a huge lack of management and the next step seemed to be industrial development.
Even the growth of agriculture health etc. depended on our ability to manufacture machines, tools and other products internally and for that a new cadre of people had to be developed. So, I took the responsibility to bring management education to the country, bringing in ideas and seeding them here. I knew these ideas would take some time to be imbibed and realizing that I left my corporate job as a qualified cost accountant and a gold medallist. I could have earned big money but I decided to make a financial sacrifice to become a teacher, a trainer. So it was a decision made even before starting my doctorate that I will come back here and since then there has been no looking back.
I served at IIM-C for six years and then I went on a sabbatical to the London Business School and the Scottish Business School to learn about European management. They have their own unique strengths. So as a result when I returned I had a combination of understanding of the American and the European management. That was my second return after which I made numerous trips abroad but never stayed anywhere for long. Since 1978, I changed my work model and from an academician of a single institute I became an independent consultant available to any organization or institute for disseminating the ideas of management.
You learnt both American and European management styles. How have you inculcated some of those here?
Indeed! I’d like to give an example; the Americans are significantly good at marketing management as they have a huge internal market. They developed ideas like industrial marketing, consumer marketing, brand marketing and customer orientation. European management is strong on management of technology, cost, productivity and efficiency as they do not have abundance of resources and they cannot afford the kind of wastage that happens in America otherwise.
As I progressed in management teaching in India, a third style of management also came out as very useful – the Japanese management style which focuses strongly on quality, continues improvement etc. As the Indian industry was being liberalized, the relationship between the government and the industry shifted from being adverse to one of a partnership. Moreover, as Indians had to compete globally in terms of import and export, management had to pick up all these ideas and utilize them. For example, the Indian automobile industry grew tremendously by learning from Japanese and German management practices. On the other hand, the pharmaceuticals, the consumer goods and the luxury hospitality sector developed using some American management practices. So, there was no standard model but whatever was relevant for particular industries was learnt and practiced.
You mentioned that you were a part of many government committees as well. So how do you see the current banking sector progressing as it is going through a lot of change currently?
There is a lot of unnecessary worry about this. Take the aviation sector for example. For a long time, the domestic air travellers in India were dependent on a monopoly – the Indian Airlines. It was very difficult to get a seat there. Then the government opened up the sector. Initially, many airlines came in and some folded up. This is a process called ‘Creative Destruction’, which was first coined by economist Joseph Schumpeter. It implies that destruction is necessary in order to free the resources so that something new can begin, which is also the basic concept of human life. What is required eventually is two three good competitors. The government has shifted from the licensing policy to competition policy, which is a very dramatic shift. This implies that whenever the consumer suffers, competition comes in automatically. The same is happening in the banking sector.
For a long time, we have had strong public sector banks but even their managements regretted the fact that as a result of the unions they opened only for a limited time in a day. This caused trouble as they did not have an alternative time for their banking needs if they missed that particular time of the day. Now, we have 24 hours online banking, mobile banking etc. As of now, there are two markets – one for products and one for companies where the managements have to understand that if they fail to perform they will be overtaken by some other company.
How would that change the scenario of Industrial relations?
Initially, the change is quite positive. The unions become aware that it is not a fight against management but a fight of the company against competition. Therefore, their responsibilities increased as they realized that if they need to sustain their jobs they have to ensure the survival of the company. As a result, unions have become much more accommodative, positive and are accepting the change of technology, new methods, raising productivity etc. The pressure is on management as well as on the unions to be responsible.
The ILO brought out a report some years ago called ‘Decent work’ which holds the management responsible to create decent conditions for work. The reforms in India brought forward that the worker should also be responsible and now if we retitle the report to ‘Decent & Responsible work’ then it will surely survive.
Being an academician yourself and having taught at various business institutes in India, how do you see the state of business education in terms of regular MBAs and executive education?
Initially, the focus was entirely on the post-graduate MBA degree education. As the initial cadre of MBAs came into senior positions and recruited engineers, accountants and so on, they realized that management knowledge was advancing. This created the need for executive education and institutes are now increasingly encouraging it.
Some of the institutes started a three-year evening course for people already working in the industry. People who are older than the younger MBAs or above 35-40 years can easily take up such evening courses. There are online and correspondence MBAs as well. In addition, there is a one-year residential program called the EMBA – Executive MBA, which has compressed the two year syllabus into one.
There is also an explosion of in-company trainings. Management education is not limited to a degree or a certificate as companies created their own internal training departments, setting aside budgets and doing three kinds of trainings within that such as In-company training, nomination to outside programs and individual specific or tailor-made mentoring, coaching etc. Lot of training and learning also happens on the job within the company. Consulting companies are also providing training packages.
Do you think management can be learnt or is it driven by intuition?
Management can absolutely be learnt and is not limited to the genes of a person. I don’t believe it when some say that ‘leaders are always born’. I feel that leaders are also made and we can develop leadership qualities, which is in fact far more difficult than training for management. Management is a combination of four things – knowledge, attitude, skills and the ability to bring them into regular habits. For every role, job, level or function, one can tailor the required management inputs and train the managers, but the core management principle is versatile and can be applied across industries. However, the application process may limit capabilities over a period of time. For example, a management graduate may enter the banking industry or the aviation or consumer goods, but after gaining over 10-15 years of experience, he/she may become suited to that industry such that it may become difficult, if not impossible, to switch and may even limit efficiency. Not only industrial managers, administrative officers like IAS, IPS, IFS, armed forced etc. are also utilizing management as a module for training.
Do you think that the space of management consulting has changed post-recession?
After 2008, the recession affected consumer industries worldwide post which they focused on survival and didn’t think too much about investment and growth. Survival requires cost-cutting and whenever companies have to do that, the initial cost-cutting happens on trainings, consulting, advertising and research front. There was a period when the consulting industry also faced recession, but India did not suffer as much as Europe or the US because the impact was not so severe here.
What is your advice for upcoming HR professionals?
The first thing they need to do is learn about the business – know your customers, competition, pricing level, customer requirements, margin pressure etc. Understand and analyse that.
Very often the HR is seen as a spokesperson of the employees and not as a management partner. It should play both roles. Secondly, become a member of the total management team instead of staying outside as an advisor. Be the people’s person within the management team and talk the HR language there. With the people, you should talk the business language.
Also, continuously update yourself. Seek some additional line-managerial role. Go to the ground level and try aligning yourself with other functions to understand how things really move and then come back to HR. As a result, you will have a better understanding of the demands of business and people and you will emerge better as a HR professional.
Bright HR people should aspire to transcend beyond the HR function to become senior managers and even chief executives. They should gradually promote themselves from being a highly specialized HR professional to being a person with a potential to head a business, a region, run a subsidiary for a group and qualify to be a CEO. A CEO can come from any function, sales, finance etc. so why not from HR?