EDUCATION SPECIAL .....Losing the magic touch?... IIT-IIM (2)

Losing the magic touch? IIT-IIM 





Indian corporates are no longer swayed unduly by academic branding

While there is no denying that these institutes have made a significant impact on India Inc, the IIT-IIM phenomenon peaked out in the mid-2000s, and now we are seeing their influence waning

Despite all the pulls and pressures they have faced, IITs and IIMs have withstood the test of time and maintained their status as premier institutes. Even with the recent proliferation of IITs and IIMs, the older institutes are maintaining their distinctive identities and are brands by themselves.

Till the late 70s and even early 80s, most of the IIT engineers were charmed by America's lure and chose to migrate there for higher education and better career prospects. A few stayed back and joined public sector companies and even fewer served the government through the IAS route. Only a few Indian engineering companies recruited IIT graduates.

IIMs were given a major fillip by FMCG multinationals including HUL (then HLL), P&G, ITC, Smith-Kline Beecham, Nestle and Cadbury and among Indian companies ICICI, Blowplast, Asian Paints were early adopters.Multinational banks like Citibank also heavily dipped in to the IIMs for their talent as they were building up the India business. Over the years, data indicates that multinational companies, especially in the consumer goods industry, held sway over hiring from the IIMs.

Given the success of these companies, some of the consumer companies of that era made it a standard practice to recruit people only from the IIMs. Over time, they started applying an IIM qualification as a natural filter and thereby created an invisible or even a visible caste system in these organizations.Even during those frenzied times, institutes like Bajaj, XLRI, FMS Delhi held their own and have produced a few CEOs.

Public Sector Units and Indian businesses in the past, barring a few, weren't in a posi tion to compete in the campuses with the multinationals and they settled for graduates and engineers from other campuses. Also, given the fewer numbers churned out in the IITs and IIMs, the availability or lack of it was never felt by the market. Significantly enough, over 50% of the IITs and IIMs have ended up serving the consumer and financial services sectors with a distinct tilt towards multinational companies. This was perhaps the case till the early part of this millennium.

Today, it is no longer the case as companies ranging from FMCG, Telecom, Consumer, Financial Services and Technology and even the start-up eco-system draw heavily from these institutes. Further, the multinationals have lost their first right of refusal over these candidates and Indian companies are seen as attractive long term career destinations.

While there is no denying that these institutes have made a significant impact on India Inc, the IIT-IIM phenomenon peaked out in the mid-2000s, and now we are seeing their influence waning. Why is that happening? As India's growth exploded, IITs and IIMs could not cater to the burgeoning demand for quality talent.

It was also the time other management and engineering schools started making an impact and companies started spreading their horizon. In some ways, companies have a more open ended view on talent and aren't coloured only by academics and standard templates of the past. Also, interestingly enough, many of the Indian managers recruited by multinationals from the campuses earlier have outgrown the India businesses and are now in global roles in their companies.

The other criticism, if at all, would be that these institutes produced people of the same template. This worked well in the past as businesses were predictable and in general non-disruptive. That pattern had to be broken ­ and it has. Also, the institutes in the past did very little to hone the entrepreneurial traits of its students. To be fair, back then, India did not possess an ecosystem like now for start-ups as capital was scarce.

Another important factor is that with rising affluence, there has been a significant uptick in the number of students opting for international schools, for which the entry barriers other than economic wellbeing aren't as daunting as acing the IIT-JEE or for that matter the CAT.

In summary, of the 200 companies covered as part of this study, a healthy 28% share of the CEOs hail from either the IITs or IIMs or both. This is a glowing testament to their contribution in shaping up India Inc. Going forward, will the numbers go up from here?
Maybe not. CD The author is Regional Managing Partner Asia, EMA Partners International, a global executive search firm.

By K Sudarshan CDET24APR15