The 2011 edition of Business Today’s annual special issue on business schools has thrown up some surprises in the B-school ratings game. Although the top three positions are still occupied by the Indian Institutes of Management, they no longer appear in alphabetical order: A-B-C, or IIM Ahmedabad, IIM Bangalore, and IIM Calcutta, an order that has played itself out eight times in the 11 earlier rankings done since 1998. But in this year’s BT-Nielsen ranking of India’s Best B-schools, the top trio has shuffled into B-C-A. For the first time since 2002, IIM Bangalore finds itself perched at the top. What has helped it most is its unmasked ambition for growth and an increased thrust on research.

The methodology to rank the B-schools is the reason for this reordering. For the past eight years, the responses of a perceptual survey by Nielsen were wrung through its ‘Winning Brands’ model to arrive at brand equity scores to rank the B-schools. This year, too, Business Today did a perception survey, but did not apply the Winning Brands model.  Instead, scores were assigned to the responses of the five groups of stakeholders across various parameters: MBA aspirants, current MBA students, young executives at companies, recruiters (human resource heads and functional heads), and permanent faculty of B-schools. These scores were aggregated, the highest scorer was assigned a score of 100, and the remaining scores were indexed to it. This makes the scoring more linear and simpler.

An MBA degree from an IIM has always been the key to material success and recognition. This year’s ranking of the Top 10 too suggests that even at a time of economic uncertainty, both global and local, brand IIM is considered a safe bet. For the first time ever, the top six colleges are all IIMs. The B-C-A trio is followed by IIM Indore (IIM-I), IIM Lucknow (IIM-L), and IIM Kozhikode (IIM-K), in that order. While IIM-I and IIM-L are familiar members of the Top 10 club, IIM-K rejoins it after nine years. IIM Shillong too joins the crème de la crème this year, rising to the 9th position from its position last year at 15.
If the IIMs have risen in rank, then there were others that slid to humbler positions. The Indian School of Business (ISB), Hyderabad, a top-tier school in the league of the IIMs, has dropped one slot from number 7 to number 8. The Faculty of Management Studies (FMS, University of Delhi) and XLRI School of Business and Human Resources (Jamshedpur), tied at the 10th position, have also taken a tumble, from number 4 and  number 6, respectively, last year.

Only Indian Institute of Foreign Trade (IIFT), New Delhi, rose to number 7 from  number 11 last year. That it is increasingly gaining equity in the B-school ecosystem is evident from the fact that last year too it had risen to position 11 from  position 17 in 2009.
So, do our schools shape enough young leaders? What measures are the B-schools taking to reform their pedagogy? Why will our young, bright talents opt for Indian institutions, if they can study abroad? What will the entry of foreign B-schools mean for their Indian counterparts?

The oldest of them all, the fifty-year-old IIM-A has come up with some answers of its own. Samir K. Barua, Director, IIM-A, says, “Our vision is to build on ‘thought leadership’, and come up with new paradigms in management thinking which are different from western models.” His statement comes at a time when leaders such as Jairam Ramesh in governance and N.R. Narayana Murthy of Infosys have accused top institutes of not doing enough research. Others such as Pritam Singh, Director General, International Management Institute, or IMI, suggest Indians have clung slavishly to western models of thinking that are inadequate for Asia.

Fortunately, a few institutions have responded to their comments—while some admit to the need for research, some others have already initiated moves to create intellectual property. For instance, IIM-C has set up a finance lab that gets real-time data and news on companies from different stock exchanges and converts into sentiment scores to predict share price movements. The government has sanctioned 20 crores for this lab, but unfortunately the money is yet to reach.

At another level, B-schools are layering functional programs with courses that equip students with soft skills. IIM-L, for instance, has an elective on leadership through literature. ISB Hyderabad has initiated an alternative value-add to education with The Young India Fellowship, a one-year course in New Delhi that includes subjects such as Listening, Psychology, Plato’s Republic (Philosophy), and Critical Thinking and Writing, besides regular management content.

A big change on the horizon is the Foreign Education Bill, which once approved by Parliament, will allow the entry of foreign universities and other education providers into India. Some are already here. For instance, Glasgow-based Strathclyde Business School has set up the Strathclyde SKIL Business School (SSBS) in Greater Noida partnering the Nikhil Gandhi-promoted SKIL Infrastructure. GD Goenka Group, partnering the UK’s Lancaster University, launched GD Goenka World Institute in Sohna near Gurgaon in 2009, which offers a two-year postgraduate diploma in business management. And the GMR Group has announced its decision to collaborate with Schulich School of Business of York University, Toronto. However, it would be inaccurate to assume that Indian B-schools will be considered inferior once the foreign universities set shop on Indian soil.

The Foreign Education Bill also brings the matter of autonomy of Indian B-schools into sharp focus. “How is it that we struggle to prove our worth but do not have any say in designing the curriculum, whereas the foreign players can fix student fees, faculty compensation and design their own curriculum totally unhindered,” asks H. Chaturvedi, Director, Birla Institute of Management Technology (BIMTECH) at Greater Noida.
The IIMs, of course, can now choose their own directors, but according to IIM-C’s Chaudhuri, faculty fee is an issue. “If we had the freedom to match salaries of US universities, we could have drawn better talent,” he says. “But this may not be possible given the cost structure and environment in our country.” In a double-whammy, what also hurts is the lack of good faculty.

The Department of Management Studies (DMS), IIT Delhi, for instance, needs at least 23 people now, according to Sudhir K. Jain, Head of Department. “We follow stringent selection norms. The entire academic background has to be sound. That’s why a large majority of those who apply to us fails to fulfill the criteria,” he says.

Even as the business education community grapples with autonomy and faculty issues, a positive change is beginning to happen at another level. Corporate consortiums are aiding institutes, not just with funding, but also with time to help develop curriculum and mentor students. For instance, the School of Inspired Leadership (SOIL) in Gurgaon, was co-created in 2009 by a consortium of 32 companies. When Anil Sachdev, Founder and CEO of SOIL, started the venture, he approached his former consulting clients. Luckily, he did not need funding support, but he asked them to invest time in co-creating the curriculum and also in mentoring students closely. “From day one, each student has a mentor from the industry who spends time with him or her on key issues,” says Sachdev.

Great Lakes Institute of Management in Chennai, founded in 2004 by Kellogg professor Bala V. Balachandran, has five centers of excellence partnering TVS Capital Funds, which created the T.S. Srinivasan Chair Professor of Entrepreneurship for conducting research in entrepreneurship. Union Bank of India helped create the Union Bank-Great Lakes Center for Banking Excellence and a Faculty Chair as part of this.

Surely these are welcome moves for an industry feeling the pinch of not having enough employment-ready talent.

B-schools are also just beginning to wake up to the power of their alumni network. “The initial response to fund and to partner the institute in mentoring students has been terrific,” says IIM-A’s Barua. The emotional connect certainly helps. “IIM Bangalore helped me with my discipline and perspective, and also in valuing work-life balance,” says Sonjoy Chatterjee, a 1994 batch graduate and Chairman of Goldman Sachs India (Securities). This respect translates into hires from the institute.

As India’s business education ecosystem evolves and matures to prime itself for a world where India and Indian companies will play an increasingly key role in the global economy, change will indeed be the only constant going ahead.