IIMs and Salaries

The readers might be aware of the recent spate of news items where each IIM (Indian Institute of Management) upped the ante by reporting how their new poster boy got $180K+ salaries. As I see it, this is nothing more than India’s long held fascination with higher scores and higher ranks culminating now in higher salaries. This fascination is what all school going kids imbibe during growing up phase in India.

Parents in India are extremely conscious of how their kids perform at school- not qualitatively but mostly in quantitative terms. ‘How many marks did your kid score in Science?’ ‘What is your kid’s rank in class?’ ‘Which prize did your kid win in the painting competition?’ And then they go home to compare this with their own kid. The parents rate themselves according to their kids’ performance and feel happy or sad based on the outcome. I know of parents who were not ready get out of their homes because of the shame their kids brought onto them by not entering an elite institute. 

There is great deal of obsession with elite institutes as well. As I see it, IIM is not really a serious business management institute at all- it is just another one of those title-endowing schools which looks great in a resume- like being a member of International Engineering Group - nobody knows what it means, but does look good on a resume. Getting into an IIM is just the next step which follows the long list of other schools that you entered only to tell others how big is your IQ compared to the kid next door. Scoring 92% in ICSE/CBSE exams followed by rank number 228 in IIT-JEE entrance test followed by 99.6% in CAT results followed by $180K job is the prescribed path suggested to all the kids nowadays. Even the household astrologer has started suggesting this path to the so called successful-kid-raising-parents.

I am not sure if this reporting frenzy taken up by different news groups and the colleges is a healthy sign. First of all, I always had serious doubts on the contribution of various IIM grads to any business. Right now, I run my own business and I keep asking myself – ‘Do I really need an MBA grad in my team?’ It’s like asking myself – ‘Do I really need a helicopter so that I can commute from my home to office which is 3 km away?’

Do a survey. Ask any IIM grad this question – ‘What is the purpose of a company/business?’ He/she would answer without even thinking (or even blinking) – ‘To make money’ (or ‘To maximize returns to a stockholder’). When I got the same set of answers from far too many IIM grads, I reasoned- ‘I don’t think so. It has a far higher purpose than just making money’. They came back with an immediate reply- ‘But a company/business would cease to exist if it did not make money’. That’s how they run to the conclusion that ‘making money is the purpose of a business’. 

I have an analogy to understand this. Ask anyone who is next to you– ‘What is the purpose of life?’ and he/she would ponder for long to answer and most probably each of those answers would be unique. What if my answer to this question is ‘To breathe’? Would you agree? Of course not! Many would disagree with me on this, I think. But then I would reply – ‘You would cease to exist if you didn’t breathe’. Hence, ‘To breathe is the purpose of one’s life', I conclude. Sounds absurd, eh? But that’s exactly the same argument a high-IQ IIM grad uses. Founders of HP, Gillette, Apple, Google, and many other business icons of modern era have NOT founded their companies to make money. They all wanted to make a difference in this world- which was much more than just making money. Making money is like breathing, one needs it to exist, but that is not the main purpose of one's existence- they believed.

According to me, IIM grads are in fact useless as far as running a business is concerned. They are too young when they enter a business school. Most of them do not have any industry experience – and even if they do, it is a mere year or two, of which they spent half the time preparing for CAT exam. How does one debate in a IIM class on what should be done to a business given a situation? The solution does not come out of pure number crunching exercise- as every experienced business man knows; it’s far more complicated than that and there are many subjectivies involved. So, without having the experience of going through real life situations how are these grads debating in a class room? To compound the problem, most of the teachers have no industry experience either. What we get to see is a bunch of high-IQ guys thinking and debating theoretically about a practical problem coming up with unrealistic and far-fetched solutions bereft of any accountability or responsibility.

This whole charade of announcing who got what salary is completely childish- it’s like a Tutorial institute in Hyderabad announcing what ranks their students got in a local entrance test. I mean, we should be talking about creating leaders who are worthy of making an impact to a business and society and here we are all talking about CAT scores and salary numbers.

Our fascination with numbers- how much a kid scores in each test gets exaggerated and blown up by the time that kid goes off to an IIM. This kid somehow puts on a smooth tongue and blabbers a pseudo-intellect talk, crunches some numbers and produces flashy reports to bag a job with exorbitant salary. What happens next? How about tracing each of those poster boys and see what happened to them in five years? That would tell us a great story of IIMs!