Audited placement reports-IIM-A leads the way again

Earlier this month, IIM Ahmedabad released its audited placement report on http://www.iimahd.ernet.in/iprs/members.php. For those too lazy to download the reports from that page, I paste the direct links for Final Placements 2012(http://www.iimahd.ernet.in/iprs/gallery/IIMA_IPRS_PGP_Finals_2012.pdf) and Summer Placements 2011(http://www.iimahd.ernet.in/iprs/gallery/PGP_Summers_2011-12_Report.pdf). For students who must make decisions on MBA 2013-15, these reports will admittedly be dated by a year, but still they give the most credible information compared to the other IIMs. I do not intend to crunch the numbers/reports, or give personal analysis(one should read the report, form an opinion, then maybe comment on this blog/reach out to other students/alumni rather than expect spoon-feeding).

Some important sections to note in the report are

1. $value and PPP adjusted value of foreign placements-quite interesting reading
2. Location wise average pay-no regional biases evident
3. Sectoral pay-especially note the sectors which offer hefty joining bonuses!
4. High base pay-bursts the perception that MBA CTC includes even office rent amortized!

Anyways, those aspiring for MBA, and their guides/parents/friends should certainly understand these reports, and demand them from other colleges. Admittedly, as Pagalguy points out(http://www.pagalguy.com/news/four-ways-which-iim-as-iprs-placement-reporting-standard-can-fixed-a-29347) , there are quite a few lacuna and loopholes, but these reports are a good start.

MBA is management by analysis, atleast initially

During the 2yrs in IIM, many courses were analytics based like those on statistics, managerial computing, system flowcharting etc. The 'softer' HR subjects were scoffed upon by me and many batchmates as 'globe', atleast in the academics and assessment. While many profs/seniors used to stress the importance of HR courses, I felt that those skills would be learnt on the job unlike hard skills in which prior knowledge may help in serendipity and saving sleepless nights. Also, given the cooperative/common goals in MBA versus that in the workplace(often dog-eat-dog), it is doubtful

When you are new to the organization, taking process walkthoughs/interviews/mystery audits will only help till a point, and will probably tell you how things are supposed to work-process walkthoughs will show the inside view of the process, while Hawthorne effect ensures that getting a realistic view is difficult. Data is never biased(atleast should not be), so as long as you can conduct exploratory data analysis using pivots, filters, lookups etc to get a broad picture. And it is analysis which is necessary to show that you are just not spouting MBA jargon as the new whizkid on the block, but have actually understood the process and all.

Often, there will be things which you feel is 'broken','flawed','wrong' etc. But to counter the 'why fix it if its not broke', you need data to back you up. When data is not available, then seniority in the room wins but otherwise only data can counter data. Of course, do not get into the trap of analysis paralysis-conclude your analysis at a cutoff point, then followup persistently to implement your findings.

Is MBA still needed to break into India Inc?

I guess I could have used a less loaded statement to convey my opinions on this topic! and yet, I do present a balanced view(to the extent possible). Recently, Citigroup India announced a graduates entry program(unusual for Indian companies though prevalent globally), thereby following in the hallowed footsteps of Unilever India, BHEL, Schlumberger and others which rely on graduates too rather than picking MBAs/other post graduates. Some other examples are the Bharti Airtel's Young Leader's Program(YLP) which also recruits  chartered accountants with upto 2yrs work experience, Kraft India's program for finance leadership and so on. So why is this trend picking up, and what does it portray for the aspiring MBAs?

1. CAT seen as a selection tool:-Companies like CRISIL mandate CAT for their selection process, and carry out a process simillar to that of top Bschools(GD, PI, CV scrutiny). So they get the benefit of CAT score(signalling academic ability) without paying for the candidate's 2yrs in Bschool. 
2. Less competition:-Campus selections(as done in MBA recruitment) necessarily has the company compromising on its recruitment standards in terms of time per candidate, number of rounds, spot offer vs exploding offer rules etc to avoid losing out their desired candidate to other firms. But when companies carry their own process like how BCG, CRISIL etc do, they can take their own time deciding on the candidate and subject him/her to as many rounds as possible. So from the HR perspective, that is a good thing. 
3. Possibly less attrition:-One reason people leave their jobs to pursue MBA is the feeling that they need a MBA to progress in their company. But if they have entered the same program that MBAs do, even if at a somewhat junior level like in consulting firms, that feeling is less likely and in fact they may surpass MBAs and leapfrog the ladder. That would lead to less attritition for the company. 
4. Larger batch size and lowered teaching standards:-thanks to the faculty wars with ISB, foreign bschools and others, many bschools have seen lowered teaching standards after the retirement/exit of star faculty. And owing to the 49.5% reservation quota which led to expansion of bschool, many people are in bschools who would otherwise not be there(this holds in full measure even for the management quota admitees). Hence, filtering the wheat from the chaff is becoming tougher even in the case of campus placements. 
5. High expectations from MBAs:-Owing to the high fees(in millions of rupees except maybe in FMS) and society expectations, a fast track career is now the expectation of every MBA(in Abhijit Bahaduri's words 'Mediocre but Arrogant'), and when companies in this economic condition cannot or do not wish to meet their expectations, those MBAs leave when things look up(as PSU banks realized at their expense after having hired MBAs in 2010 from IIMs). So companies prefer hiring graduates to hiring from lesser ranked bschools.

the above 5 reasons can explain why more companies are gravitating towards giving graduates(albeit the creme-de-la) an equal shot at the positions previously reserved for MBAs! That does not mean that they are right or wrong in doing this(that is the company's decision), but it does mean that the job pool for fresh MBAs on campus, will only shrink in the years to come. So pull up your sleeves and go to work, instead of whiling away those 2years on campus!

Support Function or Business Partner-your choice

I'd blogged earlier(http://iimaexperiences.blogspot.in/2012/02/hr-law-and-operations-next-hot-things.html)  about how HR/IT/Operations-of which HR/IT are 'support functions' in the sense that they do not directly contribute towards the top-line-are gaining importance. And a major reason for that is they are becoming more relevant to business. Gone are the days of technical geekiness failing to make that business case for the $MM spend. With the entry of MBAs into those roles, they can more easily relate to the other side(Sales & Marketing/Finance) and make a business case by quantifying intangibles.

As the Indian economy undergoes a structural shift, the new-age sectors like e-commerce, retail, education, healthcare, media are gaining importance, and they have many interesting 'support roles' in operations/supply chain, HR, technology(not IT!) and even Corporate Finance. But the difference between working in 'sunset industries' and traditional industries in my view, is that the deference to hierarchy/SOPs/tightly carved out niches are yet to come in. Hence, even those not directly revenue producers, can prove their value more easily by contributing to the bottom line, and working in cross functional teams to come with innovative workable solutions. For example,

1. Making sure store shelf inventory levels are optimal with desired fill rate/carrying costs
2. Designing systems for faster rollout of new products in banks/other service organizations
3. Designing appropriate incentive systems for salesforce, top management and bankers, to minimize perverse incentives to game the numbers. 
4. Reducing your function spend as a % of sales, yet improving the turnaround time/throughput.

But what would it take for this to happen? In my view, that would entail

1. Understanding the business-either prior experience/rotations across units or just being alert
2. Prepared to educate others in jargon free plain English about your techniques
3. Preferably coming out with a solution rather than just highlighting a problem
4. Comfortable with cross functional teams and adapting to different sub-unit cultures
5. Having the organizational goals in mind(not just your narrow goals of say slashing costs)
6. Talking the jargon-building the business case(not a glossy business plan!) in the way it gets thru
7. Be prepared to make yourself redundant-to take on progressively responsible roles. For example, shared services seem the way of the future especially for conglomerates or multinationals. Hence instead of resisting the trend, go with it.

 In brief, while non MBAs also enter those functions and do exceedingly well, the success mantra in my view, is to act more like a business partner than just a functional specialist.

Look beyond BRICS to BASIC/CIVETS-know your geopolitics

Even the best bschools are sometimes behind the times. In 2years of solving cases based on BRIC countries, one may be forgiven for thinking that emerging markets stop and end with the heavily hyped BRIC countries. That flawed world view(once you read the resources below and think critically, you will understand why it is flawed) may read you to ignore countries like Indonesia, Nigeria, South Africa, Turkey, Canada, Australia where history is being shaped as we speak. Internships, job opportunities, student exchange programs could all be available in those countries for IIM alumni in the near future(if not already), so do not form decisions based on uninformed conjecture. In the finance world, BRICS is rapidly getting passe and changing to CIVETS/BASIC as people realize that countries like India belong more in the developing/emerging world than to be classed as powerful etc. Anyways, without much ado, some useful resources to be more geopolitically aware are below. So next time, before you laugh at the survey which shows X% of Americans are ignorant about world affairs, think hard about how much you yourself know. That random history/geography learnt in school is changing before our eyes, so that is not too reliable either. 

1. Read the BeyondBrics blog on FT.com, that is free access to all, and you can use your student ID to read the associated articles for free also. 
2. While Economist may sometimes have a too liberal/Western slant, reading other media like Project Syndicate can help to correct that bias
3. The CIA Factbook(latest edition is 2011) is a good one stop solution for facts, while Google Public Data Explorer helps to easily collect and visualize other data sets as well.
4. Lonely Planet also gives a good overview of the country from the travel/linguistic perspective, and would help the travel minded people make up their minds. 
5. Of course, speaking to/connecting with real people really has no substitute and that is where networking(both real world and social) has its place, for uncovering the ground realities. While the sources I outlined have been largely accurate and objective, nothing beats understanding from someone who has been there/done that. 

 The above resources are not exhaustive and just meant as a starting point. Comments welcome.

10 tips to decide a career during campus placements

Ordinarily, I hesitate to write articles on topics that a simple Google Search/ reading books will throw more light on. However, I've endured a week of advising people on their career choices, taking mock HR interviews, giving interview 'guidelines' etc-and thereby got an insight into what makes the best aspiring managers of future tick. And I strongly believe that campus dynamics may influence the process with false choices/'hype and herd mentality'/misinformation/speed dating etc. Hence, I decided to capture all those insights/suggestions below, based on that week, and also interactions with alumni/faculty/some recruiters etc.

1. Job versus career:-Remember that although you are interviewing for a job, it is just the starting of a number of roles in your eventual career. So do take the long term view and try to think what next/how will your career grow from here. 
2. Summers vs Finals:-The recruiting dynamics are quite different between summer internships and final internships. During the summers, recruiters have less to lose(since only 2 month commitment) and may not grill as much, and tend to look for general HR fit/skills reasoning that the candidates-especially those without prior experience-may not have much technical insight/company awareness. Hence, those with the swiftest tongue may win out here. However, the final placement dynamics ensure it is more grueling as fit+interest in company+technicals+assessed tendency to 'remain' is assessed, and there are more application forms/SOPs/assessment tests/GDs/presentations and what not, and fit is usually better. Of course, companies may fear the lemons problem while interviewing those without that coveted PPO(pre placement offer), so that is another factor. Some tips are
1. Summer stipend not necessarily prorated for final salary:- During summer internships, investment banks/consulting firms tend to prorate the stipends resulting in lakhs/month, while many other roles which may pay equally well(say 18-25lakh) may give a nominal stipend which is not prorated, but on confirmation, the final pay is much better. Hence, before dismissing a firm outright, find out the final pay structure as well. 
2. Be clear on company PPO policy:-Some companies(can't name them here) have a clear policy of not awarding PPOs(!), others award just PPIs and convert them to PPOs towards year end, while yet others boast of a 100% PPO policy. See the historical trends on campus and general company/sector health before assessing this, especially if you are the sort who wants a secured job rather than say a challenging internship w/o 'assured' PPO
3. Compensation:- While this may seem the no brainer, one should remember that Gross does not matter, net saving does. High pay is accompanied by high variable component, high tax, more incidental expenses like rent/dining etc, so depending on one's lifestyle/location, the net savings  would vary drastically as per the role and location. For instance, a person with a residence in Mumbai would save around 20,000+pm(minimum) by working there as opposed to Gurgaon. 
4. Quality of work/learning opportunities:- Some roles have a great pay but are kind of 'brain dead' i.e very little personal/professional growth. So if you are someone who values mental challenge, new kinds of work and intellectual stimulation, then some high paying roles are not apt for you as they may get monotonous.  So ceteris paribus, do what you like
5. Location/Travel/Work life balance constraints:-Family responsibilities(NOT only women-even for men) may make some reluctant to go abroad/travel extensively. While some value worklife balance more than those extra zeros in the pay check. Find out the pros and cons of the role you are taking.
6. Exit options/Career Growth:-Anecdotal evidence holds that 60% of all IIM graduates quit their first job within the first 2 years. But exit options goes far beyond that. It depends on the quality of work you have done, the employer brand, skills learnt on the job etc. And some careers like consulting have great exit options, while some companies like HUL, ICICI, GE, TAS have typically spawned great managers for India Inc. So people who value an enhanced choice of exits may go for those roles which enhance their employability(as opposed to just more pay) 
7. Do you have what it takes to reach the top? Most people do aspire to reach the top of their chosen profession. Though the skills vary, generally lower level roles need more technical skills while higher level roles need more selling(internal and external), people and organization building skills. Hence, even if one would make a great analyst(for example), it is better to introspect whether they have the required zeal/qualities to make it to the top(these are necessary not sufficient!). Of course, not all wish to make it to the top, in which case this point is not for them.  This is where speaking to alumni and networking helps to get data points for making that call.
8. Sync with eventual goals:-Some people nurture the dream of being entrepreneurs some day, in which case general management roles/rotations during career etc would be appropriate, as opposed to a desk based role/advisory role-or even better taking that career plunge directly. While others may plan on becoming global thought leaders/academics some day, in which case research/consulting roles may be good. Yet others may want to settle abroad, in which case working in roles offering that mobility is better. While one can never plan even 5yrs ahead(let alone 10-30yrs), the core goals/objectives/motivators(be it fame/money/responsibility/giving back to society/family size) tend to stay unchanged, and can be that navigating compass to decide between choices. 
9. Your competitive advantage/Blue Ocean Strategy:-It is not for nothing that people advice 'do what you love and the money will follow'. If someone is really good in something, the market does notice it eventually-be it the same industry/foreign roles/cross functional stints etc. And working in nascent industries has its merits of ESOPs/first mover advantage/not competing with other IIM graduates etc. Some examples of this are film industry, commodities trading, SME banking etc. The highest networth individuals among alumni are typically entrepreneurs..
10. Don't fall prey to 'false choices' during campus placements:-Sometimes under the Cluster system with companies confirming their participation late, it may so happen that a company coming under a later cluster may be much better fit for you than a 'Cluster 1/Day0' company in terms of pay etc. So especially if there is a chance of your dream employer coming to company(like Zynga/Groupon/Facebook/Linkedlin etc), don't compromise on your choices. And off campus, there is a whole new world out there. So don't adopt the frog in the well approach that the universe of choices is only the campus jobs, and nothing beyond that. Also, following the herd is not a good idea, even if you are a topper etc throughout.

This is all for now, hope it helps those who are sitting for any campus placements-even though largely written from the IIM-A vantage standpoint.

Personal leverage-the reason for high finance salaries

The mass media loves to question whether MBAs deserve the high pay that they command. While I did partly state my views on banking compensation in an earlier blog post on clawbacks/deferrals (http://apoliticallyincorrect.blogspot.in/2011/04/no-payment-for-failure-absurd.html), its time to explain another reason why this pay is justified.

With the advent of mass media, sports events could be broadcast live to millions/billions, thereby increasing the addressable market, advertising revenues and consequentially athlete earnings. Similarly, the advent of global telecommunications(ICT boom) has allowed organizations to act global yet think local. In the finance world, the whole network can be leveraged behind a single trade to ensure that the bank acts as one to close business. With the world as an oyster, is it any wonder that trading desks with a handful of people routinely generate billions for dollars? After all, they can peggyback on old client relationships, global teams, structuring solutions, transnational risk appetite/funding etc. While some may argue that the platform determines the profits more than any individual, few banks would agree with you, and therefore fix a target compensation/profit ratio upwards of 40% even in these tough times(earlier it used to routinely cross 60%). The rationale is that if the person can impact the global network in such a significant way, recognize rewards accordingly. Similar arguments hold for the finance personnel in global shared service centres, who number few but who are exceedingly well paid.

This blog post does not defend any purported compensation excesses, but just makes the case for why MNCs can afford to pay their staff better than local peers, and why finance roles usually pay higher than in other industries. The above is just one reasoning, there are other reasons as well.

Why a moneyball/inclusive approach to MBA recruiting is impractical in India

Recently, I read an article which propounded professionally run placement services teams on Indian MBA campuses(http://insideiim.com/5-reasons-why-student-run-placements-should-give-way-to-cdc-at-iim/). For the uninitiated, most top Indian Bschools placement processes are run by students and not by 'professionals'. While that debate is still open, some of the comments below caught my attention because they expoused the commonly held view that MBA job openings are still the property of a small clique. While that may be true(why else would alumni network be so heavily valued?),  one must also examine the logic behind the same before tarring that with the brush of nepotism. In an ideal world, all candidates should be given the same level of consideration irrespective of their background. But that is not practical for the following reasons.

• Lies, more Lies and resumes:-As any experienced head hunter would know, CVs are filled with quite a few lies. And that is more true at the student level, where 'padding' is not that easy to detect. While campuses like IIM-A have a rigorous CV checking process where each line on the CV is scrutinized for evidence and wording, that is not true for many other campuses. So instead of trying to sort the chaff from the wheat, recruiters would prefer a campus where the integrity of the process is beyond dispute. And by being the first campus to release an audited detailed placement report, IIM-A again showed why it is considered as the numero-uno. This is true for some other good colleges as well, which do not permit padding
• Quality of class interaction/group work:-What distinguishes a fulltime MBA from a distance education one is the quality of classroom participation, group work, industry interface and faculty-student interaction. On all these, the higher ranked institutes do perform better, and that shows in the quality of students. 
• Information overload:-The younger generation simply do not know how to use the internet effectively, let alone net etiquette. The unfortunate recruiter who posts a job opening on a site with a CLEAR instruction to email the resume, is inundated with plenty of comments below the post in barely passable English, asking to be considered for the same! And like how there are many applicants for CAT who do not do their homework, the same is true for many job applicants as well. While sites like naukri.com now offer automated screening and resume matching, the understaffed HR would prefer prequalified applicants and relevant ones.
• Difficult metrics:-Whatever metric one can think of beyond the CAT score, chances are that it can be gamed. Whether it be B-school competition wins(inconsistent quality of participation and judging), intra campus academic achievement(again does not reflect the person's ability to work well) etc, few metrics are fair, reliable and relevant. Some companies like PurpleLeap are designing post MBA tests, but even those are doubtful. At the end of the day, the decision is largely non measurable.
• Assessment centre culture also like a lottery:-Abroad, especially in Europe, companies invite their top ranked candidates to a day long assessment centre and administer them tests, give them group tasks and have them make individual presentations. While that is a form of work samping and testing their potential work skills, that approach may fail in India because it would fall prey to coaching, and give the extroverts an undue advantage. Indeed, that is why some IIMs scrapped the Group Discussion stage, because that is not just how things happen in real life. And then, as the NDA/SSB assessment centre testing experience shows, this will lead to mushrooming of academies, and the potential scope to game the system.

So where would this work? ICICI-NIIT MBA program is a 2yr partime MBA for professionals with 3yrs+ workexp, which assures them a 15lakh+ CTC at the end of that program. of course, the selection process is rigourous and the program is selective with the goal to build a middle management cadre to fill the expansion driven need. Unless companies do an Infosys with large scale quality testing and validation, they would probably fail in the effort to expand the applicant pool. But a key difference between a technical role(Infosys, TCS.>) and a managerial role is that the latter skills are not readily testable. And that leaves room for subjectivity. 

Diversification-the best advice from a career perspective also?

Scott Adams(the creator of Dilbert) has some awesome career advice(really!) out there. One of his posts really struck home(http://dilbertblog.typepad.com/the_dilbert_blog/2007/07/career-advice.html) that
you can either choose to hyper-specialize and become the best in the world (top 1%) at doing one very specific thing, or you can try to become very good (top 25%) in as many different areas as possible, which you then can use in combination. 


In short, prefer the generalist over specialist approach. Now, from the MBA perspective, management is a skill which can be taught to any graduate-therefore the generalist approach works. For the headline making jobs(consulting, investment banking etc), prior specialist experience is rarely counted, atleast on an Indian campus. Still, let me try to state the pros and cons of each as objectively as possible. Pros are

• Uncertainty:-One never knows whether the chosen career will go boom or kaput. Think of a person who studied till 2009 to become a prop trader. What would s(he) do once the desks are shut down post Basel III? Hence, the importance of multiple areas.
• Unlearn and relearn:-The pace of change(local, regional, national, global) is so much that often the very basic mental models need to be reexamined periodically. And some old skill sets/requirements may just become obsolete/destroyed. For example, real estate agents/human travel agents are going that way due to the internet. So those with realistic other career options can unlearn and relearn with a more secure feeling.
• Multi task & network:-Combining multiple skills gives a good synergy(hopefully!) and also allows getting the best from various fields. For example, Indian finance professionals in the corporate world often have multiple credentials(MBA+CFA), (CA+CS/CWA) to signal their knowledge/mastery of multiple fields. And it does help in terms of membership and reach

However, the disadvantage of that approach would be

• Contrary to the increasingly specific Googlized world:-Customization, specific search results etc have spoilt the generation brought up on a diet of getting exactly what they wanted. And a specialist credential fits in that culture.
• Being perceived as less competent:-It is often joked that a Phd teaches the person everything about nothing. However, the significance of a Phd is the social signalling credential in the academic community that the person can withstand the gruelling grind for 4yrs(or more) and have that academic discipline. Even the best teachers(in style/ability) encounter that glass ceiling without a Phd. Similarly, a very competent generalist may not command that same respect from his specialist peers.
• Not being the 'best' in any field:-Being the best needs 10,000 hours or more, as Gladwell puts it. Those who prefer to be good at many things, may not be the best in that. And for those used to being at the top of their game, that would hurt. Also, generalists may not be needed if the organizational culture is to find a near perfect match rather than to bet on someone.

 To conclude therefore, having a second skill set/career option is always great. That not only gives greater career security, but also helps to ward of midlife crisis/empty nest syndrome.