MARKETING BUSINESS EDUCATION - Searching for Innovation
Today's business environment is characterized by change and complexity. Product life cycles are shrinking while consumer preferences are changing frequently and dramatically. Technology is no longer a trump card for gaining competitive advantage, but more a wild card, with an unknown value and an uncertain impact on performance.
A number of technologies are available to achieve a particular end in any given industry, and in most cases, it is almost impossible to foretell which will fail and which will succeed. In such an environment, innovation is critical to an organization's survival and growth. This is particularly true in activities related to marketing such as new product development or product modifications and process and communication changes - perhaps more so than in any other function. As with business, so with business education. While the demand for management education is growing in the country, business schools are also facing the fallout of the turmoil in the business environment, having to cope with profound changes in their markets. This article discusses why business schools in India should become more business-like, and begin to practice some of the theories they have been teaching for so long.
The Business of Business Education
Traditionally in India, education, even business education, has not been viewed in terms of products or markets. Instead, education has been viewed as the responsibility of the government. Consequently, educational institutions have for long operated in an environment quite different from the one businesses operate in, following practices and approaches far removed from the rough and tumble of corporate life.
However, this situation is now changing dramatically, in much the same way the rules of doing business in India have changed in the past decade or so. The financial crunch facing both the central and state governments has resulted in a reduction in the government's role in providing education, particularly higher education. Now, due to reduced funding from the government, most government funded educational institutions are not in a position to expand or change to meet the demands of the marketplace. In this changed environment, business schools are realizing that they operate in a marketplace, and that to survive they must begin applying the theories they teach to their own operations.
A business school serves two markets – one consisting of prospective students, and the other consisting of prospective employers. There is what is sometimes described as an 'implicit understanding' between the student and the business school (or at least the better schools) that the student will get a job if he completes his course successfully. Hence the critical role of placements in the success or failure of a business school.
Both these markets have now become more fragmented, dynamic and demanding. Students today are better informed than ever before, and have a variety of educational options and institutions to choose from. Potential employers, faced with challenges of their own, are looking to recruit people who fulfill increasingly tougher requirements. New areas of study are opening up, and at the same time, new demands are being placed on management graduates.
While the demand for business education is becoming more and more complex and unpredictable, the providers of these services are increasingly hamstrung by inadequate budgets and antiquated work ethics and organization structures. The work culture of these organizations is more attuned to operating in the comparatively placid, government controlled economy of the last century.
In the absence of funds from the government and other institutions, business education, to be successful, must be managed like a business. Without subsidies and external funds, neither a business or a business school can survive if the scale of its operations falls below a viable threshold. In much the same way that most of the enterprises in the small scale sector in India are unviable, business schools below the threshold scale will find it difficult to compete and grow.
Scale is important because of the virtuous spiral that signifies success for a business school. For business schools to succeed, they must attract talented students. The best students flock to institutes which draw recruiters. Recruiters go only to those institutes where they can find talented employees. To break into this virtuous cycle, business schools must be able to make large investments – in research, in salaries to star faculty, and in top of the line infrastructure. With the government no longer willing to play the role of a benevolent sponsor, and in the absence of private charitable endowments to educational institutions, business schools must look to other ways to succeed.
To achieve the required scale of operations , business schools must learn to market themselves. Since all business schools know and understand – or are at least expected to know and understand - the principles of marketing, to succeed, a school must market itself innovatively.
Innovation: The Heart of Marketing
According to Peter Drucker, "Innovation is an economic or social rather than a technical term. It can be defined in demand terms rather than in supply terms, that is, as changing the value and satisfaction obtained from resources by the consumer. to create new and different values and new and different satisfactions, to convert a 'material' into a 'resource,' or to combine existing resources in a new and more productive configuration." Here, innovation has been defined in terms that would be familiar to any marketeer.
Marketing successes that drive top line growth in organizations and expand their markets are not the result of accidents – rather, they are the result of successful innovation in products and/or processes. Such innovation is becoming increasingly necessary for any organization's survival.
TInnovation is often described as being of two types. Innovation with a capital 'I,' involving high risk, high investment initiatives that significantly impact the organization as a whole; and that with a small 'i,' denoting incremental changes and improvements to products and processes. Both kinds of innovation have a role to play in marketing success.
Innovation is not just about creative ideas. Although creativity is essential, in a business context, good ideas by themselves mean little. They must be translated into value adding activities for the business through successful implementation. This makes innovation essentially a collaborative process. In today's organizations, teams are necessary to implement an individual's creative ideas. Hence, when writing about innovation, most authors stress the importance of organization structure, systems and culture in making an organization a successful innovator. Clearly, there are many facets to fostering innovation in an organization.
How can a business school design and market its products innovatively? While any number of choices are available , a few of the more important ones are discussed below.
Look for New Business Models: Understand the Core, Expand the Boundaries
Business schools need not restrict themselves to teaching management concepts. They can – and should – be involved in content development, content dissemination, and research. The same factors that contribute to the strength of India in the areas of IT and IT enabled services – low wages, an educated, English speaking workforce, and so on – can also contribute to the growth of Indian business schools as centers of academic content development and dissemination. How many institutions in India have explored this as an alternate revenue stream?
In the field of research or content development, how many institutions have explored the vast content - much of it free - available on the Internet, including large electronic databases of journals and publications? Are there ways to utilize this content for the benefit of the business school and the academic community as a whole?
Innovate on Products : Experiment, Experiment, Experiment
To an organization willing to take risks, today's business and business education environment present as many opportunities as threats. Niche segments are constantly appearing in the market, and designing and delivering programs catering to these segments will help expand the scope of a business school's operations. In addition to identifying and catering to niches, business schools need to be flexible in designing the curricula for their mainstream programs. Gone are the days when curricula were like five year plans. Now, schools must be flexible, constantly tweaking and fine-tuning the course content and structure to make them attractive both to students and recruiters. They must interact constantly with the industry (not just at the time of placement, as is the case with most schools today) to identify leading indicators of changes in employment demand, and design their programs according to demand.
However, all innovation involves numerous risks. All experiments in course and curriculum design will not be successful – in fact, most are likely to fail. But without constant experimentation, innovation cannot take place.
Innovate on Processes: Minimize the Time Lag between Idea and Action
The same sense of urgency with which well run businesses execute their plans must be repeated in business schools. Ideas must be implemented quickly. Of course, proposals must be evaluated – but delaying implementation for too long risks the possibility that by the time a program or course reaches the market, it is out-of-date. And if this sense of urgency leads to occasional failures, these should be regarded a fair price to pay for moving quickly.
Create an Innovative Organization: Throw Out the Old, Bring in the New
Business schools need to re-examine their organization structure and the kind of people they recruit. Is the traditional, hierarchical structure that we find in most educational institutions flexible and responsive enough to meet the needs of today's students and employers? Are the faculty members capable of inspiring and energizing tomorrow's managers? It is an unfortunate truth that in India, a Ph.D. in management is often – though not always - the last refuge of the unemployed, or even the unemployable, MBA. To what extent should business schools be slaves to ranking systems that provide arbitrary, and often unjustified, weightage to the number of such doctorates among the faculty? Business schools, to be prepared to meet the challenges of the present and the future, require merit-based (rather than seniority-based) organization structures and systems that value and reward research and publication as much as degrees. To build credibility in the market, the faculty members themselves must demonstrate some of the characteristics of successful managers – foresight, flexibility, and innovativeness.
And to Conclude...
In the next few years, one can expect to find non-government institutions and initiatives playing a prominent role in business education in India. However, it is very likely that the successful institutions among them will look, and feel, a lot different from the business schools which are considered to be the top schools today.
Today's business environment is characterized by change and complexity. Product life cycles are shrinking while consumer preferences are changing frequently and dramatically. Technology is no longer a trump card for gaining competitive advantage, but more a wild card, with an unknown value and an uncertain impact on performance.
A number of technologies are available to achieve a particular end in any given industry, and in most cases, it is almost impossible to foretell which will fail and which will succeed. In such an environment, innovation is critical to an organization's survival and growth. This is particularly true in activities related to marketing such as new product development or product modifications and process and communication changes - perhaps more so than in any other function. As with business, so with business education. While the demand for management education is growing in the country, business schools are also facing the fallout of the turmoil in the business environment, having to cope with profound changes in their markets. This article discusses why business schools in India should become more business-like, and begin to practice some of the theories they have been teaching for so long.
The Business of Business Education
Traditionally in India, education, even business education, has not been viewed in terms of products or markets. Instead, education has been viewed as the responsibility of the government. Consequently, educational institutions have for long operated in an environment quite different from the one businesses operate in, following practices and approaches far removed from the rough and tumble of corporate life.
However, this situation is now changing dramatically, in much the same way the rules of doing business in India have changed in the past decade or so. The financial crunch facing both the central and state governments has resulted in a reduction in the government's role in providing education, particularly higher education. Now, due to reduced funding from the government, most government funded educational institutions are not in a position to expand or change to meet the demands of the marketplace. In this changed environment, business schools are realizing that they operate in a marketplace, and that to survive they must begin applying the theories they teach to their own operations.
A business school serves two markets – one consisting of prospective students, and the other consisting of prospective employers. There is what is sometimes described as an 'implicit understanding' between the student and the business school (or at least the better schools) that the student will get a job if he completes his course successfully. Hence the critical role of placements in the success or failure of a business school.
Both these markets have now become more fragmented, dynamic and demanding. Students today are better informed than ever before, and have a variety of educational options and institutions to choose from. Potential employers, faced with challenges of their own, are looking to recruit people who fulfill increasingly tougher requirements. New areas of study are opening up, and at the same time, new demands are being placed on management graduates.
While the demand for business education is becoming more and more complex and unpredictable, the providers of these services are increasingly hamstrung by inadequate budgets and antiquated work ethics and organization structures. The work culture of these organizations is more attuned to operating in the comparatively placid, government controlled economy of the last century.
In the absence of funds from the government and other institutions, business education, to be successful, must be managed like a business. Without subsidies and external funds, neither a business or a business school can survive if the scale of its operations falls below a viable threshold. In much the same way that most of the enterprises in the small scale sector in India are unviable, business schools below the threshold scale will find it difficult to compete and grow.
Scale is important because of the virtuous spiral that signifies success for a business school. For business schools to succeed, they must attract talented students. The best students flock to institutes which draw recruiters. Recruiters go only to those institutes where they can find talented employees. To break into this virtuous cycle, business schools must be able to make large investments – in research, in salaries to star faculty, and in top of the line infrastructure. With the government no longer willing to play the role of a benevolent sponsor, and in the absence of private charitable endowments to educational institutions, business schools must look to other ways to succeed.
To achieve the required scale of operations , business schools must learn to market themselves. Since all business schools know and understand – or are at least expected to know and understand - the principles of marketing, to succeed, a school must market itself innovatively.
Innovation: The Heart of Marketing
According to Peter Drucker, "Innovation is an economic or social rather than a technical term. It can be defined in demand terms rather than in supply terms, that is, as changing the value and satisfaction obtained from resources by the consumer. to create new and different values and new and different satisfactions, to convert a 'material' into a 'resource,' or to combine existing resources in a new and more productive configuration." Here, innovation has been defined in terms that would be familiar to any marketeer.
Marketing successes that drive top line growth in organizations and expand their markets are not the result of accidents – rather, they are the result of successful innovation in products and/or processes. Such innovation is becoming increasingly necessary for any organization's survival.
TInnovation is often described as being of two types. Innovation with a capital 'I,' involving high risk, high investment initiatives that significantly impact the organization as a whole; and that with a small 'i,' denoting incremental changes and improvements to products and processes. Both kinds of innovation have a role to play in marketing success.
Innovation is not just about creative ideas. Although creativity is essential, in a business context, good ideas by themselves mean little. They must be translated into value adding activities for the business through successful implementation. This makes innovation essentially a collaborative process. In today's organizations, teams are necessary to implement an individual's creative ideas. Hence, when writing about innovation, most authors stress the importance of organization structure, systems and culture in making an organization a successful innovator. Clearly, there are many facets to fostering innovation in an organization.
How can a business school design and market its products innovatively? While any number of choices are available , a few of the more important ones are discussed below.
Look for New Business Models: Understand the Core, Expand the Boundaries
Business schools need not restrict themselves to teaching management concepts. They can – and should – be involved in content development, content dissemination, and research. The same factors that contribute to the strength of India in the areas of IT and IT enabled services – low wages, an educated, English speaking workforce, and so on – can also contribute to the growth of Indian business schools as centers of academic content development and dissemination. How many institutions in India have explored this as an alternate revenue stream?
In the field of research or content development, how many institutions have explored the vast content - much of it free - available on the Internet, including large electronic databases of journals and publications? Are there ways to utilize this content for the benefit of the business school and the academic community as a whole?
Innovate on Products : Experiment, Experiment, Experiment
To an organization willing to take risks, today's business and business education environment present as many opportunities as threats. Niche segments are constantly appearing in the market, and designing and delivering programs catering to these segments will help expand the scope of a business school's operations. In addition to identifying and catering to niches, business schools need to be flexible in designing the curricula for their mainstream programs. Gone are the days when curricula were like five year plans. Now, schools must be flexible, constantly tweaking and fine-tuning the course content and structure to make them attractive both to students and recruiters. They must interact constantly with the industry (not just at the time of placement, as is the case with most schools today) to identify leading indicators of changes in employment demand, and design their programs according to demand.
However, all innovation involves numerous risks. All experiments in course and curriculum design will not be successful – in fact, most are likely to fail. But without constant experimentation, innovation cannot take place.
Innovate on Processes: Minimize the Time Lag between Idea and Action
The same sense of urgency with which well run businesses execute their plans must be repeated in business schools. Ideas must be implemented quickly. Of course, proposals must be evaluated – but delaying implementation for too long risks the possibility that by the time a program or course reaches the market, it is out-of-date. And if this sense of urgency leads to occasional failures, these should be regarded a fair price to pay for moving quickly.
Create an Innovative Organization: Throw Out the Old, Bring in the New
Business schools need to re-examine their organization structure and the kind of people they recruit. Is the traditional, hierarchical structure that we find in most educational institutions flexible and responsive enough to meet the needs of today's students and employers? Are the faculty members capable of inspiring and energizing tomorrow's managers? It is an unfortunate truth that in India, a Ph.D. in management is often – though not always - the last refuge of the unemployed, or even the unemployable, MBA. To what extent should business schools be slaves to ranking systems that provide arbitrary, and often unjustified, weightage to the number of such doctorates among the faculty? Business schools, to be prepared to meet the challenges of the present and the future, require merit-based (rather than seniority-based) organization structures and systems that value and reward research and publication as much as degrees. To build credibility in the market, the faculty members themselves must demonstrate some of the characteristics of successful managers – foresight, flexibility, and innovativeness.
And to Conclude...
In the next few years, one can expect to find non-government institutions and initiatives playing a prominent role in business education in India. However, it is very likely that the successful institutions among them will look, and feel, a lot different from the business schools which are considered to be the top schools today.
S.S. George
Dean, Icfai Center for Management Research
Dean, Icfai Center for Management Research