Thursday, February 18, 2010

Conversion of Challenges into Opportunities- The MBA as a Catalyst

Prof. K. BalakrishnanPGDM, IIMADean (Admissions and Knowledge Management)Asian School of BusinessTechnopark, Trivandrum

There is a famous saying to the effect that a proactive human is one who, when presented with a lemon, makes a lemonade of it. This is probably one of the best expressed ways of echoing the sentiment that a challenge is nothing but an opportunity in disguise. However, having said that, it would be meet to consider in a little more depth what this implies for the MBA graduate who aspires to be the catalyst in the conversion of challenges into opportunities.The Changing Nature of ChallengeThe year 1991 can be considered a watershed year for Indians in many ways. While we achieved political independence from colonisers in 1947, it was only in 1991, after a near disaster in the Indian economy, that the powers that be decided to unleash the creative spirit of the native Indian genius. There was little or no competition in the Indian economy then, and politicians and bureaucracy were taught to look upon business as inherently evil and businessmen as criminals. The entire thrust of management education is to equip the student to continually optimise the use of various resources and ensure the survival and success of the organisation in the face of competitive challenge while continuing to be relevant to the customer. However, when I was at IIMA, between 1977 & 79, we had only two hotel chains, two car manufacturers with one model (about 30 years old) each, three two wheeler manufacturers, one three wheeler manufacturer, one telecom service provider (governmental), two truck manufacturers, about three machine tool manufacturers, two FMCG companies, one watch manufacturer and essentially one national level footwear manufacturer. Most products had long waiting periods, were poorly distributed and of indifferent quality.For a businessman, therefore, there were immense market opportunities. However the regulatory framework ensured that both new market entrants and capacity expansion by existing ones were actively discouraged. For a graduating MBA therefore the nature of the challenge faced was something he/she was simply not trained for. Far from needing to understand the wants of the customer and building a value proposition that served to meet it, the MBA was required to understand and cater to the egos of the politician and the bureaucrat and coast along in the licence-permit raj. It was this group of managers who, overnight, 10 years later, were suddenly thrust into a scenario of fierce and international competition with the baggage of obsolete products, technologies and unviable scales of production. Forced into new learning, when the existing paradigm was learning ceasing with graduation from college, this set of managers coped very well indeed, creating, along the way, the lowest cost producer of steel in the world, some of the best and largest scales of two wheeler manufacture, a very vibrant consumer durables industry and one of the fastest growing telecom markets.The graduating MBA of today finds a very different type of challenge – to put it very simply, to compete with the best and the brightest around the world, and to survive and thrive in the process. There are still shackles remaining in the domestic market, and reactionary forces are still trying to impose new ones with greater sophistication in approach, but these will subside with time. For the first time, it is possible to achieve job satisfaction and self-actualisation.The MBA As Challenge The last ten years has seen a phenomenal increase in the numbers of graduating MBAs. Most graduating MBAs today find themselves working with another MBA as boss. The opportunity is that the boss of today is quite familiar with the armoury of tools, techniques and approaches that a typical MBA brings to the table and is therefore supportive of a scientific approach to problem solving. The flip side of course is, that being an MBA himself, the boss cannot be impressed by mere resort to jargon!This however was not the case in the 70's and much of the 80's. MBAs were feared, disliked and considered unnecessarily arrogant. A typical MBA's higher levels of need for achievement, desire for much faster growth, impatience and intolerance towards inefficiency coupled with the general inability to understand organisational dynamics made him a barely tolerated employee.In 2008 conditions are very different. To listen to Mohandas Pai, a Director of Infosys and Head of HR talk approvingly of the aspirations of the young employee (not just the MBA) and the imperative of not only the organisation but of society to cater to these aspirations makes one forget that Pai is on the wrong side of 50! Many of today's bosses are themselves MBAs, well equipped with the tools and techniques acquired during the time of their professional study, but not necessarily conversant with the latest in management thinking. For a graduating MBA such a boss is at once a challenge and an opportunity, managing what could be the superior's technical obsolescence but leveraging his wisdom & experience while simultaneously stimulating his empathy!The Challenge of GlobalisationThe liberalisation of the Indian economy post 1991 also brought forth the first halting steps towards globalisation. However this is a phenomenon that has only been partially understood. For long globalisation was taken to mean the opportunity to participate in world markets, as well as the challenge of competition from global brands in domestic markets. However the challenge and opportunity in globalisation is far deeper. The MBA of today has to realise that globalisation touches not only the market for products and services but also factor markets. While the traditional economics based formulation describes the four factors of production of land, labour, capital and organisation, today we tend to think of technology and knowledge (in a sense, interrelated) as also factors of production, and globalisation implies borderless markets for all of these as well.It is no longer sufficient to think therefore, in isolation of global product/service markets or global capital markets, but to think in terms of global integration. How many Indian MNCs can the MBA of today produce? For every Tata Steel, Tata Motors, Mittal Steel, Infosys, TCS, Ranbaxy or United Phosphorus, there are literally hundreds of opportunities for building globally integrated value chains.This is not as uni-dimensional as it appears. There are deep challenges too, in taking such a path. The singular reason for India escaping the rigours of the 1997 South East Asian currency crisis is the restrictive regime imposed by the RBI on capital account convertibility. As these restrictions ease, global integration will bring a new set of challenges in ensuring control and avoiding infectious disease and achieving the right balance between liberalisation & regulation. The current scene in India of uncontrollable inflation imported in a large measure through higher global prices of food and POL and the meltdown of the Sensex thanks to FII withdrawals only exemplifies the challenge. These are leading edge concerns and today's MBAs will have to battle with these.The Changing Social Cachet Traditionally business worried only about the most important stakeholder-the shareholder. Today, irrespective of one's own ideological stances, the list of stakeholders are many and the MBA has to balance all their interests while still remaining profitable. While industrial licensing is a thing of the past, the concepts of corporate social responsibility and sustainable development have brought into consideration the idea of the social licence. Environmental concerns imply not only the ecological, but also the total environment of all stakeholders.Lessons are available aplenty from the past. The exemplary response of Johnson & Johnson, considered a hire-and-fire company, to the Tylenol crisis, the agony and the debates that characterised the start of the Antamina mining operation, Pepsi's entry into India, the Nandigram imbroglio, the Barings Bank & LTCM meltdowns and the 2001 Internet bubble are all evocative of the need to balance the concerns of all stakeholders. The challenge to the MBA of today arises not from the need for a conceptual framework to handle conflict, but from the very personal trait that enables one break free from the crowd and exercise leadership.The MBA as CatalystThe science of chemistry tells us that a catalyst is a substance that enables or speeds up a chemical reaction (a process of change) without itself undergoing change. The MBA's role is therefore to be a change agent. What does it mean, however, to say that the change agent is itself unchanged? Any good MBA program will equip the student not only with the tools and techniques peculiar to the trade but also sensitise the student to the appropriate ethical framework within which to practice the profession. This framework goes beyond the set of professional ethics that is the hallmark of any human endeavour, to consider what is meet in the social context one finds oneself. Primarily these values relate to the manner in which the profit maximisation function is carried out keeping in mind the interests of all other stakeholders. Increasingly, as other social institutions discover the limits of their effectiveness, the MBA will find his role necessarily going beyond business leadership to societal leadership.There is, however, a peculiar challenge in being a catalyst itself. Unlike in chemistry, the MBA as a catalyst cannot remain unchanging. While leading change, the MBA himself must evolve continually in order to remain relevant. As the change that the MBA leads and spearheads begins to take effect, his leadership style too has to evolve from directing and coaching through supporting to delegating.Reasoning by analogy is generally considered as a common cognitive bias. Nevertheless, the temptation to take the metaphor forward is too hard to resist! If the catalyst in the MBA does not evolve and change with time, he would find himself, as in chemistry, a spent catalyst, in need of regeneration!Society as Challenge It is increasingly clear that democracy is the only viable form of government, though democracy could express itself in many forms. Compared to earlier forms of government such as absolute monarchy, feudalism and various types of oligarchies, the single distinguishing feature of democracy is the space it offers for dissent. This is in turn enabled by the systems of checks and balances to prevent absolutism in any form, operated by an enlightened citizenry.The MBA, by the very nature of an eclectic and multi-disciplinary education that he receives is best placed to play this role. We see a graduation from being a leader of a social institution to becoming a leader of society itself. If we examine some of the tenets of TQM as practiced by the Japanese, and some of the principles of Human Resources Management as advocated by Peter Drucker, Noel Tichy and Dave Ulrich, we see elements of a very humanist and liberal tradition employed in the course of profit-seeking behaviour.The Enterprise of the Future A recent IBM study of more than 1000 CEOs from around the world showed that in their considered opinion, the enterprise of the future is:• Hungry for change• Innovative beyond customer imagination• Globally integrated• Disruptive by nature• Genuine, not just generousNotice that the first and the fourth points deal with change. The enterprise of the future does not merely respond successfully to change, it actually leads change. Further the enterprise must be ready to practice creative destruction. To be successful in this is to ensure that renaissance follows recidivism. The MBA as the catalyst of change must be clear what constitutes the unchanging core and what becomes the subject of change. The focus of change is to achieve the second and the third goals and thereby remain continually relevant. The final point relates to the social purpose of business which itself can be a major opportunity.Career in Vogue: Masters in Business Administration Upon completion, an MBA leads to responsible positions in business, taking critical managerial decisions that lead to the growth of any top-notch organization. MBA programs are run throughout the world, because their relevance is across industries, business sectors and economies. And what’s more, this exciting profile comes with an even more exciting pay packet.

Advantage MBA: What's in Store for You? Open newer avenues: An MBA provides the modern manager with tools and skills needed to identify new opportunities for organizational success. MBA programs are designed to make one aware of different approaches that have traditionally helped in managing organizations.

Understand business dynamics better: An MBA provides a person with the ability to understand the nuances of business and the dynamics involved in managing it. An MBA is useful for anyone who wants to refocus his or her career.

Get Picked by the Best: Why Do Companies Prefer MBAs? The foremost traits that corporate recruiters look for and find in MBA candidates are: • Sound communication and interpersonal skills• Ability to analyze and strategize• Leadership skills

Call it the effect of globalization or to combat competition, companies today are taking all measures to ensure professional conduct in all aspects of their functioning. These changes in the business environment have a natural and direct correlation with the kind of people that are hired to run companies, irrespective of the fact that they are naïve graduates or experienced racehorses.

MBAs Remain the Top Choice It is perceived that certain professional characteristics are innately present in most MBA recruits: 1. Emphasis on professionalism2. Stress on deliverables and deadlines3. Better understanding of a company’s integrated functionality4. Internationally mobile and sensitive to cultural diversity

Identify the MBA in You: The Three Step Process Self-assessment Self-assessment should be the first step in any major career or life altering decision.Take time to reflect on your experiences, your abilities and your ambitions. Understand your career path; the planning and the timeline required to achieve it. Assuming that the MBA will help you achieve your goals, what is it that you want to learn and gain through an MBA program? If you self-assess well, you'll be in a better position to understand your strengths and opportunities.

Define your career path To understand where you see yourself a few years from now, the most important step is to define your career path; what are the choices you plan to make to take charge and further your goals?

What makes a good MBA candidate? Apart from possessing a good aptitude, there are a number of other qualities that top B-schools look for before selecting a student. There’s a lot you can do to show the B-schools what a good candidate you are, but you need to be clear about your own abilities and goals. Are you honest and sincere? Do you have enough knowledge about the school and the course that you are applying for? How focused are you with respect to your career goals?

The Other Side of the Coin: The MBA Life As in all careers, there is a flip side to being an MBA. Though not a huge deterrent, one should know about the life of an MBA as well.

A bit of a reality check here, but the personal life of most MBAs especially during their training period and formative years in an organization is extremely hectic. One of the primary reasons being: high performance pressure. Most MBAs are at the helm of affairs for business concerns involving decision and policy making that demands a lot physically and mentally. The ones spearheading departments are responsible for what the whole team does, and every decision you take affects not just you, but often your entire team and impacts the entire organization.

But then, what's life without challenges? If you feel that you are made for tackling life head-on, and are excited about your work being meaningful, what are you waiting for? An MBA is a great first step towards your dream destination. In ConclusionThe MBA of today faces a very different set of opportunities and challenges than those of yesteryears. The new nature of the challenge is both substantive and meaningful and the MBA should see himself as singularly equipped to meet the challenge and seize the opportunity. Indeed there is no other option as society seems to say that in the process of a more inclusive paradigm of wealth creation lies the leverage points for a more equitable societal set-up..

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