I am Sandeep Maddu from Visakhapatnam. I am a Mechanical Engineering graduate and a MBA in Finance stream. My work experience comprises of around 7 years in banking industry, including ICICI Bank and Andhra Bank.
My stint in the banking industry has enabled me to observe from close quarters the quality of MBA students being recruited into the banking industry. Most of you are aware that the banking industry is recruiting MBA students in large numbers. While this was always true in case of private sector banks and foreign banks, the recruitment of MBA students by public sector banks has provided the much awaited fillip to the MBA job market. This is largely expected since the public sector banks control more than three fourth business of the banking industry. Moreover, public sector banks are recruiting MBA Finance students as Financial Analysts and MBA Marketing students as Marketing Officers in Scale II.
For those of you unaware of the grade structure in public sector banks, the entry level in officer cadre is Scale I and it goes all the way upto Scale VII which is the General Manager grade. From there on, Executive Director and Chairman and Managing Director head the top management. Most of the employees currently employed in the banking industry had to work up their way from Scale I at the beginning of their career. There were also a good number of those who started in clerical cadre (which is not officer cadre) and then promoted to officer grade. What happened during this process alongwith excess staffing pattern a couple of decades back, there was little recruitment even till 2000. Even for the employees already working in public sector banks, there was a period during the 1990s when promotions were virtually non-existent.
All has changed in the new millennium. More freedom to public sector banks by the Ministry of Finance gave public sector banks the flexibility to recruit new staff. While the issue of historical baggage cannot be solved immediately, banks realized the importance of having a younger workforce. The importance of this needs to be looked against the backdrop that the average age of employees of public sector banks in India is 45 years. While experience of such staff is indispensable, public sector banks realized that recruitment of a younger workforce is imperative to compete with the nimble footed private sector banks and foreign banks who do not have the historical baggage of older employees. This sparked a revolution in banking industry recruitment. Banks have begun recruitment in large numbers. I am particularly impressed with the recruitment aggression and style of Union Bank of India. Surely, someone at the top level there must be driving the HR initiatives.
But over a period of 8 years when recruitment of financial analysts and marketing officers has begun on a large scale, banks are now realizing certain chinks in their armory. These bright and young MBAs were expected to bring in that much required whiff of fresh thinking and innovative methodologies into the banking practice. However, something has not gone exactly as was planned. The majority opinion among banking circles is that the quality of MBA students being recruited from campus interviews as financial analysts and marketing officers leaves much to be desired. The quality is not just a recruitment issue but it has spillover effects on working environment of the banks where today it is very common to find an experienced and efficient Scale I officers and clerks working under and reporting to a young MBA recruited in Scale II or Scale III but with less knowledge. While HR strategies of banks in this regard might be taken up in a later blog article, the point that I would like to make here is I have taken banking industry as an example to highlight what is the problem facing the industry in terms of MBA recruitment. I believe similar opinions exist in insurance, mutual funds and other players in the financial services industry.
Based on my background as a MBA Finance student and employed in a public sector bank and having had the opportunity to have interacted with a good number of senior Executives, I have given this issue a lot of thought for the past couple of years. The outcome of this thinking process can be summarized as follows :
o Top B-schools, which number no more than 20 or 30, have the right structures in place both at the admission stage and pedagogy stage to ensure industry-ready MBA professionals are produced
o Once we go below the top 20 or 30 B-schools, the quality falls drastically. It is not a linear drop but an exponential drop both in quality of pedagogy and more importantly quality of faculty
o The quality of MBA students at the stage of admission i.e. after students complete their graduation be it B.Sc, B.Com or B.Tech, is decent enough to be nurtured to the required level of industry competence. The problem is not with the quality of the students. MBA curriculum is not technical by its very nature unlike engineering or IT. MBA is a special curriculum meant to produce managers and leaders of tomorrow competent to manage and lead companies in today’s competitive environment. I am unaware how effectively I have conveyed through the previous sentence what I meant to but remember that MBA curriculum does not require one to be an intellectual powerhouse. Anyone with an average IQ can comfortably complete MBA course. I would even go to the extent of saying that anyone with even below average IQ can complete MBA curriculum provided she/ he has the right mix of additional skill sets to be more employable. So the quality of students is never an issue
o The problem is the pedagogy and faculty and some other issues
o Since the liberalization of the Indian economy in the early 1990s and in particular the proliferation of service industry has led to huge requirement of MBA graduates. To meet this demand, the country has witnessed a mushrooming of MBA colleges. In this process, the promoters of the MBA colleges somewhere down the line seemed to have forgotten that MBA colleges are not really academic oriented courses. A lot of industry relevance is to be provided as part of MBA curriculum, without which MBA degree in the hands of the student is really worthless. This can only be appreciated once MBA students start working in a company. They quickly realize that their MBA curriculum has failed big time in providing what is actually needed to be competent in the industry.
o MBAs are not students. I strongly advise MBA students to stop feeling as students. You are not in a MBA college to read textbooks and pass exams. That is what students do. Stop feeling like a student. This is the first step to be a successful MBA passout. Your aim is not to pass the exam and get an MBA degree. Your only aim is to get a job. While you may argue that right from kindergarten to Class X to +2 to degree, that is the basic goal and not just for MBA. However there is a big difference. What you learn in kindergarten and the goal of kindergarten curriculum is to be make you ready to take up course of Class I. Understand where this logic is heading ? The goal of Class IV is not to get you a job, it is to make you competent to take up Class V subjects. Class X curriculum introduces us to basics of higher algebra and advanced mathematics so that we can successfully take up courses in calculus in +2. But MBA is different. Unless you want to go for PhD, the goal of MBA curriculum is not to prepare you for higher studies. It is to make you industry-ready. MBA course is meant to provide you the set of skills so that you can effectively compete with your peers in the job. It aims at maing you industry relevant and industry ready. Now, what use is a MBA course which does not fulfil this basic requirement ? What if a MBA course produces a student with 3.6 GPA with lots of references and testimonials but not delivering value to the company. Companies are not running academic institutions to appreciate your academic prowess. They are running profit earning organizations. They want MBA-Marketing student to bring in revenue and make sales. They want MBA-Finance student to advise them on the preferred route of raising additional resources. A street smart kid who sells balloons knows more about customer interaction than do many MBAs. This is no trivial statement. I really mean it. There are a number of salesmen and marketing personnel who can bring in better business than most MBAs. Companies do not want your MBA degree or your grades. They want value addition to their organization. And that is what most of the MBA colleges are failing to produce – industry ready MBAs
o Infact, you should not even think of salary as being the focus of your MBA course. Noted cricket commentator Harsha Bhogle, who himself is a IIM-Ahmedabad alumnus, says that you don’t go to IIM for higher salaries and high profile jobs. If that is the reason why you going to IIM, you are starting at the wrong place. You go to IIM to build a career, to acquire those set of skills which will provide you the armoury to progress in your professional life. Always keep that in mind. Your MBA course is meant to provide you the skills to enable you to succeed in your professional endeavours.
o But there is a growing DISCONNECT between what MBA colleges are offering and what the industry is demanding. While reputed colleges like established universities are aligning themselves well in this regard, the smaller MBA colleges are struggling to realize this, because of which the employability and acceptability of MBA students is increasingly getting difficult. It is not uncommon to see MBA students working for salaries of Rs. 8000/- to Rs. 10000/- Truly, that is not what you are aiming at. Are you ?
§ This blog is for all MBA students whose institute is not among the top 30 or 40 in the country. The tools and skills provided at these institutes is not enough to prepare the students for getting a decent job, let alone succeeding in the job. Through a series of articles, resources, tools and links, I would provide the additional inputs required to be a successful and industry-ready MBA - faster thoughts, higher goals, stronger concepts. Infact that is the meaning of the name of the blog. Citius, Altius, Fortius (Latin) is the motto of the ancient Olympics. Citius means faster, Altius means taller and Fortius means stronger
§ I request you to provide your valuable feedback. Your feedback will provide me with the inputs on the various issues and requirements of MBA students which will enable me to improve the blog and offer further value. In my next article, I will attempt to detail the qualities and skills that a MBA – Finance stream student should acquire to get a good placement. You can contact me at : sandeep.maddu@gmail.com
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