So am I a 'compulsive reader'?

One of my close friends at IIM-A(who prefers to remain anonymous) once wondered whether I was a compulsive reader? To those not into reading(like him), it seems surprising that I read so much, more so that I read 'elementary' topics(finance related stuff). His comments got me thinking and here's this post.

I read for different purposes(other than the mandatory case readings)

1. Entertainment:- While others prefer TV shows, films etc, I like the occasional novel or two
2. Professional updation:- As one of the few people with 3 qualifications(CA/CS/CWA) spanning law, financial accounting, corporate finance, management accounting etc, I consider it essential to keep up with what is happening in my field. While trade magazines, blogs, newspapers and journals ordinarily suffice, books are sometimes essential for this. 
3. Investing:-Also, I am an(so far) amateur investing who believes in special situations investing and value investing. For both of these, extensive knowledge base is must. 

Of course, it does help that I have(in the words of another friend) a 'thirst for knowledge'. But that does not mean that I rely on 'book smarts' alone. While I do like the company of like(and of late-unlike minded too!) minded friends, other professionals etc, I prefer to chart an independent thinking path. And that by definition does need some solitude or curling up with books. 

So why are MBA's paid so much anyway?

The IIM-A Final placements are well under progress(newspapers have reported an increase of 10%-20% in average pay packets). Often, these young graduates(me next yr!!) earn more than their parents(in their prime of career/at retirements) had ever earned. This pay disparity(which is what sparks off the MBA rush by applicants who think this is true of all institutes) is the subject of occasional debates where the point is raised-what value does a MBA bring to the table vis-a-vis an experienced graduate(w/o MBA)?

 While this issue will keep simmering, my 2 bits to this issue are:-

1. Imperfect talent market:- Unlike the West, there is much more of a gap here between the 'best' and the 'rest'. It is not merely due to inputs('student quality' as measured by CAT scores, work experience, grades etc) but due to infrastructure issues(mainly faculty-you can build nice amenities but not faculty!). This, coupled with the first mover advantage and alumni network, gives the top colleges that 'brand'-which allows their graduates a premium relative to other MBAs
2. Revenue Producers:- Consulting, Sales, Marketing and Investment Banking(the most in demand professions at B Schools) all share a common attribute-YOU are the revenue producer and not merely a support role. So when the performance is easily evaluated, it is linked to pay and a high pay can be justified. Of course, this is why job security is relatively weaker 
3. Data Analysis/Comfort with ambiguity:- The case method teaches(for those who sincerely work on the cases before class) you how to crunch data and be comfortable with incomplete, conflicting and ambiguous data. While MDPs can cover this, a 2 yr MBA permits this attitude to be ingrained which then gives a better career start. Organizations value someone who can make sense of data AND be comfortable with uncertainty. 

I am not including stuff like communication skills(presentations etc), working with others(study groups are just proxy for real world) which both MBAs and non MBAs can develop with equal ease. So I would attribute the MBA non MBA pay differential to the above 3 factors only. 

How technology enables learning at top B schools(including here)

As I approach the fag end of the first year at IIM-A, a look-back made me realize how much I learnt extra as compared to a conventional classroom chalk-board approach.

1. YouTube:- A-Z advertisements/video clips can be shown to make courses like marketing, advertisement, communication skills, operations management(clips of shop floor for city slickers) come alive, and help students visualize what is going on 
2. Spreadsheets: Other than the usual suspects of Finance, Statistics, Strategy and Operations, sending the case exhibits of marketing, HR and other 'soft' subjects can enable using graphs, statistical analysis and data crunching to bring rigor to one's approach
3. Podcasts/Videos:- Watching lectures streamed by experts like the Valuation Guru Prof Damodaran can supplement the B School lectures/notes. 
4. Blogs/Blog Comments:- Several experts blog(specially the Seeking Alpha/ HBR/FT/Economist blog series) and the comments on their blogs are equally insightful. As the writer of the book 'Econned' mentions in his foreword those who comment often have relevant experience and insight and bring up issues and ideas that add considerable depth and color.They are also relentless in pointing out errors, omissions, sloppy thinking, and my personal bête noire, typos. Personally, I have found the comments on the best posts, even more enlightening than the posts themselves. If you want a current, expert writeup on an issue for tomorrow's class, a blog is often the best place to go online(even in this era of encyclopedic magazines etc) 
5. Google Trends:- This tool(recently launched) has amazing potential for serendipity wherein you can learn what people are looking for(a must-know for a marketer/strategist.........)
6. Google Documents:- Need to conduct a marketing survey? Need multiple people to fill out a form? No problem-just use Google Documents features to do this 100% free. This replaces cumbersome paper and allows downloading the results in an Excel file for further analysis
7. Java(for simulations):- There are several free simulations of important concepts online which anyone with JRE(Java Runtime environment) installed, can access.

The future of education will(hopefully) go beyond all this. 

How social controls/academic rules reduce freeloading at IIM-A

At the outset, I define free riding to happen when someone does not use his abilities to the fullest extent for the group. A person's abilities may not allow him to 'pull his weight' in the group but that is not free riding.

A major disadvantage of working in groups(in an academic setting) is that where everyone gets the same grade, there is ample incentive to free ride. The free riders know that the responsible members among them will get the assignment done, in all circumstances. So a purely economic logic would dictate that the free rider maximize his personal utility(use free time in parties, card games etc) by reducing time spent on group work. This, when sustained for a long time would lower the output of the group.

But thankfully, this process is arrested in some ways;-

1. Reformation of study groups:- Study group reformation(for 1st yr students) is allowed by the PGP Office(overseeing academic activities). To balance individual choice(a person should be allowed to pick his study group), management skill building(people should learn to work in groups they did not entirely choose) and equality(all study groups should have roughly equal capabilities), around 2/3rd of the study group is voluntarily formed and the balance 1/3rd is formed by random selections and interest surveys. The voluntary formation process generally excludes free riders and gives them a wake up call
2. Reputation/Networking:- Whether it be standing for elections, interviewing for entry into a club or teaming up for a contest(all on campus) or seeking a connection from an alumnus(off campus), the reputation one builds on campus does stay for a long time. As a senior eloquently puts it on her blog(link here), free riders will take a long time to erase that initial bad impression. This social control is perhaps the stronger of the two(unless people are so thick skinned as to ignore insults, scorn and appeals to their better sense)

So why isn't free riding fully eradicated here? Sometimes, groups remain intact due to the emotional bond/friendship which overrule rational decisions. Also, some people turn free riders later(after reformation) due to depression, give-up mentality etc.

Why(and how) MBA students should learn marketing

The first year at IIM-A is nearing an end and while the flashback was on, some points about marketing occurred to me. For those focusing on non marketing/consulting areas(finance, operations), Marketing sounds common-sense and 'globe'(in our parlance it means bluffing oriented subject). While this perception is routed in truth, I think MBA students should note some things

1. Don't go only by books/teachers:- Some books/teachers(luckily not here!) are too theoretical/bookish to impart any practical sense of the field. Seek details from interns, people who have worked there etc. 
2.  It is all simple stuff don't complicate:- Try boiling down the concepts to every day terms. For example, when the street seller quotes every person a different price by sizing them up, he's merely following the most efficient form of price discrimination!. No need to complicate things using jargon. 
3. Marketing is needed because people have a choice. It is that simple. If you are a pure monopoly or close to that, you need smart pricing but not marketing. But if people can have other options, you need to differentiate yourself and for that you need marketing
4. Be different from the road side person:- A layperson will just admire an ad but you should think about the reason behind it & the potential market impact.
5. It is much more rewarding in this digital age:- Where telecom based marketing gives you accurate demographics, time/location based marketing etc, it opens up a whole host of opportunities
6. It does need good numeracy:-A glib talker can become a great salesman. But a brand manager(the pinnacle of marketing) needs to manage the brand operations/sales/distribution/spending etc. The field has become much more quantitative now. So even for a numbers person, this field has some good opportunities. 

To conclude, job hunting needs personal marketing. So knowing the basics of marketing well, does not harm. And any advanced level application could only help the organization. 

Life lessons from Harsha Bhogle

The famous IIM-A alumnus(known for his cricket commentary) Mr Harsha Bhogle comes down to campus often, and shares some gyaan with us students. I was fortunate enough to attend one such session about half year ago(posting now since I found those notes during a spring cleaning spree!). He started with his usual disclaimers that they would all be sports related(thats all he claims to know!) and that he would not argue on cricket matters(since he does not want a busman's holiday).

The salient features of his talk(and my comments on them in Italics) were

1. Join the winning team:-This improves your probability of winning  else you may end up like Mohd Ashaful(star Bangladeshi player whose talent is wasted because he is in a mediocre team. He could have bested Michael Clarke-star Australian player- but got no chance). Also, unless you have tasted success in your initial years, you would freeze/hesitate when the big moment of truth comes. This logic explains why young MBA graduates head in droves for the 'winners' and want to try entrepreneurship after some years of work-exp. I would agree that this is easier for the person involved. Of course, winning on what aspects('growth', 'reach') etc would need to be seen-business is not like cricket where Win/Lose is easy to calculate.
2. The margin between best and the rest is small-stay humble:- In an era where that extra 1% separates the best teams, you should stay humble and focus on execution and related jobs like practicing well each time. This is true more so in business because complacency can easily erode that extra edge. Even the topper of a MBA batch sees competition yearly from subsequent batches, colleges and nations and cannot afford to rest on his laurels.
3. Give your 100%- One can control one's efforts but not the outcome. Often, the best results take years to achieve(like winning World Cups). So, choose a field because of the passion you have, and the money will follow
4. Analytics:- Success being a function of time, space and scale, it is important to use analytics well. Michael Lewis's book Moneyball is an excellent example of how analytics was applied to the professional sports talent market-with astounding results. This has lessons for business also. 
5. Continuous improvement:- Giving the example of the one-trick wonder Monty Panesar(who has let himself go), Harsha said that one should invest in one self(practice, coaching, training) instead of expecting others to do so
6. Size is not everything:- Teams like New Zealand punch much above their weight. In this liberalized era with lesser entry barriers, even smaller firms(with that success DNA) can aim to compete effectively. 
7. Setting up success for others:- One cannot always hit that winning 6, score centuries and achieve records. Thinking in the team's interests and enabling others is important. The movie Chak De India illustrates this in the India-Australia women's hockey final where the 2 g termstar players set up goals for each other. Even consulting firms harp on this factor and this is essential-ensuring that your own interests are also served in the long term

Differentiating banks by people and branding

I always thought that the key success factors of a bank were  the 'reach'(number of branches, ATMs, global presence), reputation(do depositors trust that their money will be safe) and(of course) 'capital'. But post the global financial crisis, banks have begun to differentiate themselves via emphasizing the softer side(client relationship, trust, corporate responsibility etc) over their skills. In this context, the Dec-10 guest lecture at IIM-A by Dr Anil Kumar Khandelwal(Chairman & Managing Director of Bank of Baroda from 2006-09) holds many lessons for aspiring bankers(and in fact any corporate executive).

From his talk, I can garner the following insights

• Showing commitment wins over people:- When he began his career, Kolkata was regarded as a 'punishment posting' for bank officials who were quite eager to return to other regions. Dr Khandelwal, on the other hand, surprised his boss and peers by seeking a longer tenure. This won over the unions and staff there, who perceived that their boss had 'skin in the game' and meant well
• Bank goals and staff goals need not conflict:- When Dr Khandelwal met the Kolkata staff, he found out a main grouse that there was no growth in their region(branches not opening etc). The bank policy was not to recruit more people till the overstaffed workforce was cut to size. He then obtained the buy-in of the unions to open nearly 1/3rd more branches with the existing work force itself. This instilled pride in the staff, more growth opportunities for them and achieved the bank's objectives
• Implementing staff suggestions:- He said that their best changes had come from the line staff and not from 'fancy reports'. He however added the caveat that unless the suggestions were implemented(or reason given why impracticable), the pipeline would dry up. This is common practice now in most MNCs but was a new thing then specially for public sector banks
• Rebranding works:-He changed the logo to its present orange sun one. He faced opposition but could overcome that by some deft maneuvering. Now, the bank has a 'youthful', 'tech savvy' image as compared to its stodgy old image.

This shows the power of intangibles even in the financial sector where technology threatens to assume the prime place. Such initiatives are sorely needed presently.

The sad story of the sugar futures ban-a regulator's perspective

During his talk at IIM-A, Mr BC Khatua stressed upon the price discovery and policy tinkering aspects of the commodities futures market(specially in the Indian market where spot prices are imperfect). He cited the sugar industry as an example of how the 'messenger was shot'(my words). He deplored the 'ignorance'/'narrow mindedness' of some of his colleagues on that topic. 

Everyone and his uncle(then) has analyzed the sugar futures issue and I do not wish to repeat their excellent analysis.Suffice to say that post a harvest failure and international supply crunch in Brazil etc, sugar prices had shot up to Rs 27-28(from Rs 13-14) by Sep-08 and futures traders were blamed for the same. When the regulator was asked for an explanation, he gave a detailed analysis citing crop statistics, global trends etc and forecasted a price of Rs 39-40 IF preventive action was taken now by encouraging farmers to grow more or allowing import of the nearly 3 million tonnes requirements @ $300/ton(prevailing rate).He did not want to shut off the price signals by suspending the sugar futures contracts.

But under pressure from the Agriculture Secretary, he gave in and decided to suspend the contracts. Another reason was that he did not want the fledging commodities futures market to be blamed for the inevitable price rise. And in less than two years, the price levels(retail) had touched Rs 50. The 3 million tons gap was imported at $700-850/ton. This gap may have been filled domestically but farmers had not got the price signals to act by sowing. If they had sown, given the 12 months crop cycle, the gap would have lasted 1 yr instead of the 2 yrs it did.

Some nice analogies describing regulation, commodities markets etc

During his talk at IIMA, Mr BC Khatua in his pithy style, explained abstract concepts with some superb examples which I'm reproducing below.

1. Building of house analogy:- To build a proper house, the architect(regulator) needs to plan the layout well and in detail(legal structure/framework). But he cannot build the house himself. For that, he needs masons, plumbers, carpenters etc(market intermediaries ) whom he supervises(regulations). But he cannot himself monitor them always. So he prefers them to have some self monitoring(Self Regulatory Organizations-SROs like Stock Exchanges). For the plan to be achieved, all must work in tandem. Similarly, for a proper securities framework, the intermediaries are equally important and that is why they are 'governed' separately via licensing, fit and proper regulation etc
2. Luggage free passenger analogy: An arbitrager or day trader do not keep any open positions at the end of the day(but profit on intra-day swings). This is similar to 9-5 luggage less travel!!
3. Infant analogy:- The FMC though nearly 60yrs old has not developed like SEBI/RBI due to Govt control/market conditions. For it to become as effective a regulator, it needs to be nourished/fed like how SEBI was in 1992(via autonomy, powers etc). My take on this is that the securities scam hastened the formation of SEBI but no such thing has happened to speed up the transfer of powers to the FMC
4. Long/Short analogy:-A farmer is 'long farming' from the time he sows his seeds, but he is short only on the day he sells. It is for us to ensure that he gets more platforms/time to execute his short position and earn more. Giving post harvest credit will dilute the financial pressure to sell at throwaway prices at the mandi. Encouraging competing channels with mandis could improve the realization at the farm gate without increasing the customer's food bill. 

Why the FMC Chairman Mr BC Khatua opposes amoral speculators.

The FMC Chairman Mr BC Khatua views pure speculators as amoral(see interview in Mint). But it was only today during his lecture at IIMA, that I got to know the genesis of his views on this subject. And it was truly shocking to hear-its also an excellent example of being careful about the impression you make on others.

When he had visited the NYMEX in May-08(when oil prices were $125 a barrel and rising), he had interacted with a young trader(maybe someone like me 1 yr hence!!!). He had asked the trader his views on oil prices in 6 months and beyond but was answered with a nonchalant shrug that the prices could go only one way-UP. Now, Mr Khatua knew that(then), the oil supply was almost balanced and there was no fear of shortage. When he probed the trader, he heard that the PE/hedge funds/HNI's were all seeking that alpha(extra return to tune of 30%-40%) for which they decided to go bullish on commodities like oil. After all, the slightly balanced situation could tip at the margin with sudden demand from emerging economies like India/China. Now, I do not see anything morally wrong with this approach but Mr Khatua felt that this was misusing a legitimate hedging tool to exploit one sided supply side issue(?).

He also faulted the SRO(exchanges) for following herd mentality in their regulatory tools like margining, position limits etc While he could find some justification in their fear that trade would shift offshore(UK/Singapore etc) if they enforced tough limits, he still felt that this reluctance to enforce their own powers, was the reason speculators could ride freely.

This experience seems to have deeply impacted him as these views persist even nearly 3 yrs hence. And while he is at the helm of FMC, it is unlikely that high frequency traders/ huge financial investors will be allowed into India's commodity futures markets.

Regulation and Governance of Commodity Markets in India-amazing lecture by Mr BC Khatua(Chairman, FMC)

Even at IIM-A, IAS officers and regulators do not drop in daily! So when the 1976 IAS batch officer Mr. B C Khatua visited IIM-A to deliver a guest lecture for an elective course, I decided to attend come-what-may. And the lecture was fabulous and entertaining(some of his pithy analogies described here) . This post tries to encapsulate the learnings from that session but is not a verbatim transcript. Some parts have been transposed for logical flow.  My analysis is in Italics.

Given that most attendees(2nd yr PGP-ABM students) had attended 15+ lectures on this topic, Mr Khatua plunged into his talk with the wry observation that he had returned from a Parliamentary hearing where he found it difficult to educate people about the basic distinctions between commodities futures, commodities spot and equities markets.

Piercing the common misconception that all futures markets are alike, he explained the following differences between commodities and other future markets.

1. In commodities markets, someone is affected at any point of time(in high price scenario consumer in low price scenario producer) so the chance for discontent/lobbying is more. In equities market, as Buffet puts it, 'a rising tide lifts all boats' so people are generally happy with higher prices
2. Commodities can never touch zero(intrinsic value>0) but equities can touch zero. Equities will have some residual value('call option' value in finance theory sense) so this point is not strictly right.
3. One can generalize across stocks but each commodity is very different with its own idiosyncrasies. There are much more variables(so scope for detailed econometric modeling)
4. Due to India's inadequate transportation, spot markets/financing(for agricultural commodities only), there is no common spot market which is more like 28 spot markets! GST and APMC reforms may close this gap though. Till that happens, these local imperfections will magnify any national/global trends. For example, inability to transport perishables may magnify effect of frost/rains.The FMC works around these issues by polling prices(mechanism similar to how LIBOR rates are calculated),
5. Imagine 2 tug-of-war teams There are diverse interests with contrasting views(long/short) and so the market should be in finely balanced equilibrium. Even if rumors/speculation etc come, it is easier to confirm/disprove than for equities/securities. So the intra-day volatility is higher than in equities but the trend is more stable. Exception was for the high oil bubble seen in 2008(explained here)
6. The virtual market is much more affected by the vagaries of the real market. No one bans a stock future if the stock tanks but as the case of sugar futures(described here) shows, the futures market was blamed for the intrinsic spot market issues.
7. Unlike stock markets(no comparative advantage in opting for stock settled futures),physical delivery in the commodities futures market is preferred by quality conscious buyers(compared to taking from spot market)  because
1. Their contracts are better enforceable(penalties for opting out besides MTM)
2.  Quality is more much specified and warehousing conditions are good

 He concluded by stating that besides the FMC Amendment bill before Parliament, the spot market reforms(GST, APMC reforms, bank credit, warehouse facility, transport improvement) was needed before the commodities futures market could really take off. His hope was that one day, the farmer would aggregate enough to actually trade on the exchange platform(This seems unlikely but who knows?)

The Story of how FMC allowed Iron Ore futures

I read in Mint(article here) about the Indian commodities futures regulator FMC Chairman permitting commodity exchanges to offer iron ore contracts. But it was only during his talk(described in my other post) that the details of this decision was explained. Mineral ores are bulky, difficult to transport(poor transport from mines) and hard to deliver on the exchange platform(can you have warehouses for 1000's of tonnes of ore). Still, as iron ore exporting states had either banned(Karnataka) or sought bans(Orissa) on export of iron ore, the FMC thought of introducing a contract to help hedge against the resultant price fluctuations.

When the FMC had received a proposal 4-5 months ago about introducing these futures, it took them time to decide on a 'reference price'. After all, ore quality varies as per the mine, and the price is excluding transportation costs which can vary as per distance, mode(truck/train) etc. Also, the spot market is fragmented and small due to long term purchase commitments. But when they resolved the issue of 'reference price', they had to forgo the 'physical settlement option' prevalent in other commodities.

The absence of physical settlement may induce price manipulation but as mentioned by Mr BC Khatua, the basic metal ores(iron, copper) being widely tracked and monitored, the manipulation risk is low at the domestic level(of course, in my view, you cannot account for global mining cartels). It is too early to evaluate whether this futures contract will help steel producers but it should be interesting.

How corporates are using contests/games as recruitment tools.

Imagine you are a recruiter who needs to gauge the quality of a Bschool and the interest level of students in your industry. Bschool rankings can be skewed(also every Bschool may not do well in all sectors), student interest may vary etc. Also, conventional indicators like past academics, CAT scores, extra curriculars are at best an approximate indicator of the candidate's ability to perform on the job.

So some Indian recruiters have devised innovative strategies to persuade the students to submit to 'job testing' via their participation. Some examples are

• Mahindra & Mahindra(M&M) :- They conduct a contest 'War Room' in which M&M business heads submit some business problems for students to analyze and present solutions. Open sourcing you may think. Yes-with a twist. Participation is restricted only to a few Bschools considered 'good' by the M&M team, and is at the national and all India level. Winners of this contest do not get a 'PPO' per se but certainly would have an upper edge in any recruitment done by M&M for their strategic planning division.
• Aditya Birla Group(ABG):- ABG holds a competition 'Stratos' via a Simulation. A business problem is simulated(for example setting up a car factory) and then information is fed into the simulation. Decisions are made under uncertainty. This contest is again restricted to few Bschools and held at the campus level. 
• Johnson & Johnson(J&J):They have a marketing launch case contest with PPI(pre placement interviews) and summer internship offers given to the winners.
• Religare:- It holds a trading simulation titled 'Trader's Trophy' where at the end of the trading simulation, participants get a composite score for their profitability, risk control and client service(all parameters essential for on the job success).

All these contests have nominal prize monies but give the recruiter valuable data on

• Interest levels of students in the activities the company seeks people for
• Comparable performance of Bschool students(eg whether IIMA does better than IIMC)- and also gauge the level of a campus
• How Bschool students(future leaders) actually perform. This can be used to design aptitude tests, interview questions. 
• Also, students may not know their inherent potential(or limitations) but may find it out via games. Trading games are particularly valid indicators for this

On the flip side, these game results may well be one-offs and incomplete. But they certainly are a good start.  Such unconventional HR strategies may help companies like how baseball players selection using statistics(as described in Michael Lewis's book 'Moneyball') helped that team.

Ensuring India's demographic dividend-Shantanu Prakash(PGP 88)[Educomp] at IIM-A

Like his alma mater(IIM-A), Shantanu Prakash's company Educomp is unique in India. From pre school to degree college, off line or online, Educomp covers end-end education segment. So when Shantanu agreed to give a 1 hr talk to students on 'Entrepreneurship', there were many takers among the student fraternity. His gentle and relaxed style of speaking won over several hearts(contents of course won over the minds!)

Among the salient points of his talk were the following

• He praised the traditional middle class values of 'integrity, thrift, hardwork and willingness to dream' as his core values but said that we Indians often underused this ability to dream
• Compared to when he started out as an entrepreneur(early liberalization), he said that there was never a better time or place to be an entrepreneur. India is the cynosure of attention globally. 
• Even in his college days, he was an entrepreneur organizing rock shows and earning a decent amount which he then blew up in the stock market!! That partly influenced his decision to join IIM-A(else he may have built a financial services giant)
• When asked about global differences, he said that 'helping kids learn better' philosophy can be adapted globally
• Giving the analogy of how transplants do not work as expected, he felt that home grown business models would help solve the education issue. Indians understand their fellow citizen's needs better, also some things are unique to India/China(family saving for education for instance)
• He explained away the high margins of the business as 'marginal cost of content once created' is zero-or maybe some translation costs. 
• When asked how to decide between multiple appealing areas for entrepreneurship, he gave the analytical view first(pain area, potential, unique way to service it) but quickly added that whatever excited/resonated with you should be chosen. He likened it to relationships..you date many but marry only one person at the end
• Analyzing the multimedia rich world of today, he said that teachers can no longer 'chalk and talk; or be 'sage on the stage'. Instead, they must use technology to engage their students
• He mentioned Educomp's inorganic growth strategy as providing capital and a platform to existing small businesses whose owners are passionate and focused.
• As an indication how objective evolve, he said that now his focus is something bigger for the nation because 'quarterly results take care of themselves'
• When asked how to imagine so much, he said that once you take that first step, the resources, exposure and people around you, open up your mind to even more possibilities
• He said that instead of decrying the lack of skilled, talented teachers, we should focus on retraining them and providing them technology to perform better. 
• Emphasizing the value of reputation/credibility, he said that the first few customers repose faith in YOU and not in the product. There comes the importance of branding, track record, CV etc
• What really impressed me was the courage and power of his vision..and more importantly the ability to translate that into concrete actions.

'Sam Uncle' at IIMA

Yesterday, Sam Pitroda visited IIM-A to deliver an address on "Nation Building in the 21^st Century and Indian Challenges". Like any other initiative of his, the talk was interesting and well thought out. Starting from the origins of nations(in tribes), he discussed the evolution of national building and said that in the present age when goods & services move freely, are borders/passports relevant to keep people out? He discussed Japan & EU which were suffering from economic issues and hoped that India could take its place in the sun soon. He prefers 'Collaboration over Command and control'. He does not see technology as the 'silver bullet' to address India's problems but wants it to be accompanied by 'domain experts' of which India has a chronic shortage(maybe as good engineers either do MS abroad or MBA in India-but I'm digressing). He hoped to spark off a discussion/debate here so that the fruits could be seen over time.


What was more amazing was the Q&A session after his talk. While I have seen blatant abuse of this system elsewhere, today's session was the last straw and I simply had to post the type of Q&A that happens when such sessions are opened to the public(I am NOT elitist but I've not noticed such things in IIM-A only events)

• The attention seeker:-This person spends a disproportionate time on his own introduction/self edification, pushes his own views and asks a 'sitter' question at the end.  For example, the self professed head of a management college was guilty of this during Sam Pitroda's talk.
• The lobbyist:-This type of person(no reference meant to Radia&Co) asks on issues tangential to the talk and wants to push his interest. 
• The crank:-We had a scientist who had developed a machine to 'generate energy out of gravity'. When gently reminded that this talk was not the right forum to air the issue, he walked out with his wife
• The idealist:-This person expects the speaker to be omnipotent and have solutions for all the national issues. It is better to remind such people, "Ask not what the country can do for you but what you can do for your country".

 Those of you wondering why 'Sam Uncle'.well..that's what he was addressed by a student during a Q&A!!!

IIM-A finally recognizes stream disparity in their shortlisting criteria.

Today is the day of heartbreak and joy-when the CAT scores are out. When I checked IIM-A's shortlisting criteria for 2011-13 batch, I first thought it was the same one as 2009-11(where they had given a percentage for 10/12/Graduation without considering streams). For example, getting 90%+ in Commerce is difficult(even more so in Arts) in Std 12/Graduation but that fact was not given weightage.

I had blogged before on the bias towards engineers. But this year onwards,. there is very little excuse for that. But in this year's shortlisting, the section percentiles have been lowered to 94(overall 99). Also, 75%+ is the pinnacle for Commerce marks but 95% for Engineering marks. The scheme seems designed in the word of one of my batchmates, "to bring in more diversity(via non engineering/work exp people)". Lets hope it works.

Update: Some of my batch mates feel that the criteria rewards mugging. But looking at the points structure, anyone with decent acads in 10/12/Grad would make it. They have only replaced those who slacked off in graduation with those who have workexp/master degrees.  

Bschools DO teach you team work_but restricted to the community

An Arab proverb of unknown origin goes
At home, me against my brother. In the house, me and my brother against our cousins. In the village, me, my brother, my cousins against our neighbors. Outside, me, my brother, my cousins and our neighbors against the whole world."

 For Bschools, the proverb would probably read as
"In library/CT, me against my study group mate.
In class, me and my study group mates against the rest.
Outside the class, me, my study group and rest of the section against other sections.
Outside the  academic block, me and my batch(all 5 sections) against the other batches
Outside the campus, me and all other batches/alums against the world"

The last line is the most powerful. Globally(and India is no exception), Bschool brands are built on the success and networking of their alumni. But that would be of little use if the alumni do not cooperate/help out their fellow alumnus.

At certain times(summer placements, academic contests etc), the team work reaches stupendous heights as exemplified by the LIMCA book record breaking dominos show for which the team endured 10 night outs.  But at other times, as in study group formation, quiz preparation, academic help, that bonding some how vanishes.

Don't "burn bridges at work" and 4 other tips to clinch that summer placement

The IIMA summer placements just ended recently with the entire batch getting placed under the new cluster system.  Competing with 400 of your peers for the summer placements is a totally different experience from even admissions. In all other activities(classroom, sports, extra currics) we do co-operate but this is quite intense competition. Yet, people did co-operate in the best interest of the institute in things like questions in company PPT;s, helping in last minute prep.

People come here hoping to make a career shift(mostly into Fin/Consult thogh that trend is changing). But ontrary to what many people may think, this battle is often won even before you step into the institute.  What I'm stating below holds true only for IIM-A but may apply to other institutes. Without much ado, I'll delve deep into the points an MBA aspirant should consider during his/her prep for MBA, to ensure good placements.

• Stellar undergraduation scores : Think of it as a hygiene factor. When a recruiter is faced with 400 CV's, s(he) would take the easy way out of setting a GPA filter. Not all companies do so, but the ones who do so often overlook all other stellar achievements and reject the CV. I've seen many friends with GPA of even 7-9 getting overlooked due to this factor despite their all round excellence. 
• Undergrad college: Again this is not in your control. For that rare person who's reading this 4 yrs ahead of time, remember that a brand like St Stephens, IIT, few NIT's, St Xaviers, Poddar, BITS etc carry that much more weight with recruiters. By chance or otherwise, the shortlists of top Consults/Fin cos often contain exclusively students with those brands. If you are from a college considered as second rung, do make that extra effort to shine in GATE, GMAT, GRE, inter-college festivals etc, to display your excellence.
• Extra Curriculars/ Student Clubs: Involvement in these things indicates your ability to multitask well, and so is viewed favorably, specially by Consulting firms who view this as pre requisites.  And merely writing about a bit role does not count unless you can substantiate it via examples, incidents etc.
• Academic excellence/understanding: -Do not confuse this with high GPA's. Often the interviews test merely the basics and not rote learning(actually true for IIM interviews also). So be prepared to be grilled on your logic, rationale and what not. The first year portion(taught from July-Oct) is generally not tested unless you are applying for a Finance role.
• High quality work experience: For candidates with work experience, do not burn your bridges at work. Never. It may sound tempting to resign from your job before CAT, do badly at work on grounds of CAT/GD prep but that would back fire when you need substantiation of your work experience, letters of referral and the like. And in this small world, it just takes a call for the recruiters to check you out. And do not take shortcuts like early offs etc. The more variety of work exp you gain, the more valuable you become to recruiters. Think of whether you are working 100 days or 1 day 100 times over..do not let it become mechanical/ routine 

        Each campus has its own post entry patterns of summer prep so I do not discuss that on this forum.  Considering that companies prefer the summer placement route to recruitment,  aspiring MBAs should not underestimate the importance of their background to the whole process. In an ideal world, there would be assessment centres, day long multiple interviews and the like. That is not possible here so background assumes much more importance.

Creating your own Niche

Niche is a marketing concept as well as one of IIMA's best run clubs but that is not the topic of this post. Summer Placements 2011 are over in IIMB/C and are well in progress here. During the break, I had time to  introspect over a book by Garrison Wynn-Real Truth about success(http://www.flipkart.com/real-truth-success-wynn-book-0070702276) and then the truth hit me.

We try hard to conform with the rest whether it be presentation techniques, academic curriculum etc. If an engineer is weak in FRA or a CA is weak at PS over here, they typically work more towards overcoming their weakness than on reinforcing their strengths. From what I noticed of my classmates preparing for summer placements, they were focussing on the weakness based approach(get good on their weak areas) rather than be an expert on their strong ones. That is why in the HR type questions "What makes you different/Why should we recruit you" etc they badly faltered. If they had focussed on their unique strengths better, things may have been different.

I am not advocating that one should not work on weaknesses. But in this competitive world, there is no need to play by other's rules by using a certain type of skillsets only. In a batch of 95% engineers, it is safe to assume that there is little to distinguish them in the core areas of quantitative ability, under-graduation grades etc. Both in placements and later on in work, what would bring top performance and excellence is not what is common with others but what is unique.

That is why instead of competing with others on their homeground, is is better to pick your battlefield and then win.

You know you are in IIM-A when..

1. You see 12pm on a clock and immediately think 23:59:59(each second counts here)
2. You toss out a 1000word WAC report overnight and still outscore the guy who works on it the full week
3. You speak some BS as "Class Participation" and get swatted down
4. Whatever you say in class is taken down by the TA(Teaching Assistant) though you are not the Prof
5. The Prof mails you assignments just when you were about to sleep(even 2am!!!!)
6. You do not sleep for 36hours and still consider yourself as lucky(I'm not making this up!)
7. Anything you say to outsiders is taken as gospel even though you may not know a thing(actually we DO know but that would'nt make a difference).
8. You hear the word "Juice" and immediately think of a certain bulletin board(come here and find out)

Thats all for now.As campus life progresses, I can add some more to this list.

Who ever thought that open book exams could be so challenging?

Before coming to IIM A, I had this perception that open book exams are somehow "softer" and simpler to crack. Only after 2 Slots(4 more to go!)  realized(after some eyeopenng papers) that they reflect the way we work in the real world.

Think about it. When faced wth a situation at work will you avoid opening any reference books/notes etc or would you rely only on what you learnt last in college. The former obviously is what most people would do.
The skills sets needed to mug are far different from the skill sets needed to refer to/locate information in the Googled world. And that is what open book exams teach you.

Risk taking & winning-the Story of the IIM-A Beta quiz

Today was the annual Finquest(finance related trivia quiz organized by Beta-the premier Finance Club of IIM-A for the Fucchas(first years). The entries numbered about 100+ teams of 2 members each.

Naturally, so many teams cannot compete in the finals. They conducted a written elimination round to shortlist 6 teams. Myself and Miheer Desai qualified for the finals and sat as the third team.

By the 2nd last round end, we were at 85, the top team at 120 and third team at 65. The round had an exciting format that 6 areas were given(1 area per team) with the team getting to select areas in order of their rankings. I.e 1st team could choose area of questions and then 2nd ranked team could choose its area. There was an added twist of choosing points scheme BEFORE seeing the question(viz +60 -30; +40 -20; +20 -10). The first ranked team played safe, chose +20 -10 & secured 20 pts totalling 140.

Now, we could go for 60/30 option & try to get 145 and win. But if we lost, then we get 55 & slide to 3rd. We played safe; chose 20/10 and secured 105 pts. But then the team at 65 took 60/30 gamble and won coming 2nd!!!!

To compound it, we were told that it was the same qn for all 3. The qn format was designed to reward risk takers and we lost our oppurtunity at 1st place

Some phrases to use in any class participation

In my first 2 weeks here on campus, I noticed 1 thing irrespective of the class. Whenever the Prof would expound some theory/idea/concept, some smark aleck(s) racks up some CP(Class Participation) points by saying the following:-
-It depends on the Situation
-We cannot apply this in all cases
-We need a balance of positive/negative
-I agree with him
-.....(rephrasing somebody else points)
-Sir as you said.. Even if the Prof has not said anything like that, he can rarely say so(unless he is utterly wrong). And the person putting CP gets brownie points for hanging on to the Prof's words

These weasel words just add fluff/gas to the situation without contributing any new idea. But an unwary academic associate(the person watching class participation) may just count the number of interventions and award marks. Thankfully, both the Profs and Academic Associates are quite competent and experienced to observe such tactics. Then why they are still applied is a mystery to me.

12:00pm or 11:59:59-why IIM-A deadlines are the latter?

We like round figures but rarely trust/adhere to that level of precision. Tell someone to meet you at 2pm and s(he) turns up at 2:15/2:20 still early by Indian standard time(behind our actual time!).

This is not welcome in IIMA. Class timings are set at 8:44:59 meaning if you enter at 8:45 for the 8:45 class, you are 1.25hrs early for the next one. Most profs, and all campus clubs, enforce this seriously. After all, the future leaders of India should learn to respect their own and other people's time. And oversleeping is not an excuse for missing any deadlines.

After the initial culture shock, sticking to deadlines actually works fine. Because thats a good habit, also it brings in more seriousness.

Why do male engineers bag 90%+ IIM-A/B/C seats?

As a non engineer, I noticed that male engineers dominate IIM-A with around 95% of the batch. This inspite of the IIM's wanting more gender & stream diversity for better classroom discussions.

One reason maybe the online CAT of this year. We males love our gadgets(I'm just making a generalization here without any gender stereotyping so PL do not send me hate-mail) so perhaps the ability to crack a Computer based test(CBT) was better.

And then engineers have an inherent edge in CAT due to intensive MCQ practice, objective test experience and of course aptitude. Since most of them in IIT/NIT are male, this same ratio reflects in CAT.

So what is the impact? The quality of discussion remains high due to different insights, experiences, IQ but the sector diversity is somewhat missing(less finance, law, arts etc). Still, this has been the trend for quite a few years and things are working fine, so maybe this is not a real probleｍ。

Why is IIM-A called hectic?

Even before I stepped into IIM-A, I heard/read stories about 4 hour sleep, 1 hour notice surprise quizzes spoiling lunch and generally about the hectic first year schedule.

Considering that the academic curiculum is (broadly) same across all IIM's in the first year, why does only IIM-A have such a rushed culture? One part of the puzzle lies on our dedicated Profs who prepare hard for the classes even to the extent of sending class materials at 2am for the 8:45 lecture(I'm not making this up!). Seeing their dedication, no one has an excuse for ignorance when s(he) is cold-called. And the classroom time: study time(pre/post class) vastly varies across students but is atleast 1:2. Multiply that into nearly 4 hours classes and you see why people joke that the A in IIM-A stands for Acads.

The second part of the puzzle lies in the various clubs in IIM-A nearly 40 at last count. Fucchas(first years) enrol generally in 1-5 clubs and a good chunk of time goes there. And then assignments, WAC, dorm parties, recreations(Frisbee, soccer, cricket etc), hanging out at eateries is all non(academically)value added time-but which prepares you for life.

Thirdly, punctuality is non negotiable here. Deadlines are given to the last second so 11:00am deadline is 10:59:59 with even 1 second delay not condoned. This of course prepares the student for real life & to discard the "Indian standard time" he is used to. But it is also a major cause of the "pressure".

It is upto the individual. If he just focusses on acads, a pretty relaxed life will ensue. But then, the whole IIMA experience will not just accrue. A fine balance needs to be struck between work and leisure here.

What makes IIM-A unique? It's the culture

A Statistics Prof got me thinking yesterday when he posed this question. The unusual replies like faculty, infrastructure, amenities, age came from all and sundry. Only one guy dared hazard that the students were the secret of IIM-A's success.

After all, the omnipotent Students Activities Council(SAC) runs a significant bit of campus life right from the students shop('Entre') to negotiating the canteen/other outlets T&C to scheduling lectures. Of course, the dorm culture plays a major role in the alumni bonding which really drives most B-schools to success including IIM-A.

But then, the reason person X is at IIMA with person Y at other Bschools is generally an "accident". Bad luck on either the exam day or interview day may make an otherwise stellar candidate lose out. So, quality of students remaining same across top B-schools, it is the institution that makes a difference.

In my 10 days here at campus, what struck me most was the dedication of IIMA staff-right from the contract housekeeping personnel to the administative staff and(of course!) the faculty who shame latecomers by reaching quite ahead of time. That, along with the culture of entrusting wide responsibility to students treating them as mature adults, certainly catalyses their metamorphosis from starry eyed MBA aspirants to the business leaders of tomorrow. The dorm culture not only ensures passing on knowledge, tradition, wisdom of the seniors(Tucchas) but also builds that much needed bonding across batches of the same dorm.

To conclude, the IIM-A culture though hectic at times certainly shapes the person more than anything else. After all, steel goes through fire to become forged steel. Credit should go to the institution for ensuring the 50+ year tradition