To appreciate the new Indian Institute of Management (IIM) Bill, 2017, it is necessary to note the considerable distance it has travelled from past paradigms of command and control that defined the relationship between the IIMs and their 'owners'. It is yet to get through Rajya Sabha (Lok Sabha has already passed it), but there is no harm in hoping for the best. What's more, this Bill is the best we have seen so far.
The relation between the Ministry of Human Resource Development (MHRD) and the IIMs has always been fraught with tension, skirmishes, acrimony and distrust. It has cut across the party lines and generations of HRD ministers. Over the years, the MHRD has, in principle, given powers to the IIM boards to supervise the institutions and then put in place a multitude of caveats to override it. This is where this Bill makes a giant leap forward.
The Bill proposes that the board should elect its chairman, as opposed to forwarding three names to MHRD for the selection. It also says the board can select its director. This is a huge and positive departure from the past, where three names were sent to the PMO for selection. The Bill also proposes to empower the board to take decisions on geographic expansion via campuses and satellite centres. Top-ping up faculty salaries (and incentivising them through non-government funds) is already possible.
The draft also departs for the better from its earlier versions in its articulation of the new body called the 'coordination forum', one that is expected to facilitate the exchange of best practices and discuss issues of common interest. The way this forum is going to evolve will be the biggest thing to watch out for. In the past, it was suggested that this would be a super board, with powers to overrule the institutes' boards and lay down common practices. Therefore, we had the huge risk of ending up with a super homogenous, lowest common denominator of institutions.
But many have argued, including this columnist, in favour of the opposite. To take the entire IIM ecosystem to the next level, allow each IIM to stand on its own feet and compete for resources and affiliations, and hunt for avenues of differentiation and build pockets of excellence of their choosing.
For example, IIM Visakhapat-nam, instead of following the same old models of other IIMs, should exploit its natural advantages of being on the east coast with a large maritime footprint. It is located in a smart city, close to a tribal heartland and housed in a brand new state. It could specialise in maritime logistics, leverage the urban infrastructure/smart city centre of excellence, have a social development focus for one of its key programmes and could be a think tank for the new state. It should seek affiliations from countries like Singapore that the state is wooing as collaborators.
For IIM Vizag to mimic IIM Rohtak, which in turn is mimicking don't-know-who, would be, indeed, sad. IIM Bengaluru should, of course, be the place where technology and global tech entrepreneurship and 'go global' come together. It will be a pity if 50 per cent of IIM-B's revenue from management development programmes do not come from the local start-up community. IIM Kashipur should be doing something substantial in tourism, which could be a big driver of GDP. Some IIMs may opt to build centres of expertise; others may opt for executive education in chosen sectors; again others may offer sector-specific MBAs.
A wise coordination council would limit its role to sharing of best practices and thinking deeper about pedagogy and integration challenges when one out of two students come in through the reservation route and have different life experiences and have studied in undergrad institutions of varying quality. The council could, in theory, lay down common rules for, say, criteria for FPM candidate selection or faculty or visiting faculty selection. But should it? The market is a much better disciplinarian. So, the coordination committee should encourage experimentation, new models or new strategic positioning options. One IIM may create the world's foremost emerging markets journal. Another may document great case studies from India, giving the world new management paradigms. Another may choose to encourage the faculty only to do research for western peer-reviewed journals.
The coordination committee can also be a place where all faculty evaluation methodologies and outcomes are shared, and institutions are inspired to work on improving their own. In short, one hopes that the coordination committee will discuss ideas and experiences, and be a place, which encourages and promotes innovation and excellence rather than be a place, which controls and bonsais and cuts everyone down to the size of the smallest or pushes the dream of those who desire obedience over excellence.
Next, we come to the newly liberated IIM boards. The danger of dysfunctional boards wholly in charge cannot be underestimated. Will the IIM boards step up and take ownership and responsibility or will they continue to abdicate decisions to the government? The new Bill also provides for a more evolved and widespread board composition and a self-perpetuating board. Boards, in turn, will need to handle this responsibility with the utmost sincerity and integrity and should embrace diversity, and not end up as cosy, exclusive clubs.
The new Bill makes it welcomingly clear that with autonomy comes accountability and mandates an independent evaluation of the institution every three years. Hopefully, the boards will respect the spirit of this and work with faculty and director to annually evaluate all aspects of the IIMs - academic, financial, institution development, social/societal accountability, the contribution of knowledge for nation-building and so on.
Let us keep our fingers crossed and hope that the Bill will go through and that the coordination committee will not be a constraining and compromising committee and that this government and this parliament will unshackle the IIMs and force them to be a huge knowledge force in the world. ~
The author is a management and market strategy consultant, visiting faculty at IIM Ahmedabad and has been on its board