June, 2009: An Indian woman with an MBA from a US university is interviewed by the CEO of an Indian telecommunications company on a muggy Friday afternoon at its Mumbai headquarters. Realising that she has no telecom experience whatsoever, the CEO asks her to work on a report on the sector over the weekend and email it to him on Monday. The lady does exactly that - and she does it so well that she gets the job. "The kind of research and analysis she did over a weekend was amazing. Only an MBA could do that," says the CEO - who never went to B-school himself.
Every head honcho wants an MBA - to hire one, that is - even those heads of corporations who never came close to a B-school classroom. Indeed, the chief executives of many of India's most valuable companies didn't need that degree that's so coveted today to step into the corner room. Over two-thirds of the CEOs of the 30 companies that make up the benchmark index on the Bombay Stock Exchange, the Sensex, do not have an MBA, although a few did attend short management programmes at prestigious universities like Harvard and Wharton.
The non-MBAs boast a delightful mélange of qualifications. There are a lot of engineers, a sprinkling of doctorates, chartered accountants, cost accountants - and even an MA in English among these 30. There are only three Indian management graduates and a handful who have degrees from foreign universities. Another surprise - none of the Sensex companies is led by a graduate from any of the IIMs. Two of the Indian management grads are from Jamnalal Bajaj Institute of Management Studies and one has a PG Diploma from IIT Delhi.
Degrees Don't Matter
"Five years after starting your career, your qualifications do not matter, and to be CEO you do not need any educational qualifications," says Santrupt Misra, Head of HR at the Aditya Birla Group, who is also the CEO of the carbon black business of the group. Hindalco, the group company that is a part of the Sensex, is headed by Debu Bhattacharya, a chemical engineer from IIT Kharagpur. Misra himself is a double masters degree holder with a double doctorate.
Another top CEO without an MBA is A.M. Naik, the feisty leader of engineering and construction giant, Larsen & Toubro Ltd. Naik is a mechanical engineer from the Birla Vishvakarma Mahavidyalaya in Anand in Gujarat. "The chief qualification of a CEO is leadership - his ability to anticipate changes and ensure that his organisation stays ahead of the curve," says Naik (see interview above).
O.P. Bhatt, Chairman of India's largest bank, the State Bank of India, has a Masters in English; and ONGC Chairman R.S. Sharma is a cost accountant - a fellow member of the Institute of Costs and Work Accountants of India, or ICWAI. Deepak Parekh, Non-Executive Chairman of the Housing Development Finance Corporation, his deputy Keki Mistry (the current CEO) and Aditya Puri, the head of HDFC Bank, are all chartered accountants. As is Satish Sheth, Group Managing Director of Reliance Communications, who is also a lawyer, to boot.
The engineers without an MBA include Azim Premji, who completed his degree in 1999 at Stanford University Engineering School after abandoning it in the 60s as he had to take charge of the family business of oil trading. H.M. Nerurkar, N. Chandrasekaran and Carl-Peter Forster, heads of Tata Steel, Tata Consultancy Services and Tata Motors, respectively, are also engineers.
Mukesh Ambani, too, is a chemical engineer who pursued an MBA at Stanford but did not complete it. ACC chief Kuldip Kaura and Jaiprakash Associates CMD Manoj Gaur are both engineers from BITS, Pilani. Y.K. Hamied, Chairman of pharma major Cipla, is a doctorate in organic chemistry. K.P. Singh who heads DLF is a graduate in science.
The foreign MBA holders are M&M's Anand Mahindra (Harvard Business School), Lalit Jalan of Reliance Infrastructure (Wharton School) and Naveen Jindal of Jindal Steel & Power (Texas University). There are other promoters who went to foreign universities but for short-term leadership programmes. Bharti Enterprises' Sunil Mittal, a graduate, underwent the Owner/President Program at the Harvard Business School as did Navin Agarwal, Executive Vice Chairman of Sterlite Industries and brother of founder Anil Agarwal.
Anil Ambani, Chairman of Reliance Communications and various other companies that constitute the Reliance-Anil Dhirubhai Ambani Group, is an MBA from Wharton. And Ratan Tata, Chairman of the 114-company Tata Group is an architect from Cornell who also attended a short programme at Harvard.
Look beyond family-run India Inc., at a broader basket of listed corporations, and suddenly you find the number of CEOs who are management graduates - especially from the IIMS - increasing sharply.
EMA Partners, a global CEO search firm, did a study in 2009 which showed that among the top 200 companies in India, close to half of their CEOs were from either an IIT or IIM or both; and roughly 32.5 per cent of the 200 companies had a CEO who was an IIM graduate. So although K. Sudarshan, the India Managing Partner of EMA Partners, says "track record is most important", he does agree that an MBA "can be a door-opener". Agrees Misra of the Aditya Birla Group, "The degree becomes a pedigree check when one is selecting a CEO, but an excellent track record is often more important."
Sudarshan adds that the craze for an IIM degree started in the late 1980s, but today many more options are considered by a student; in fact, today the MBA halo has lost some of its lustre, he reckons. "The national law schools have opened a new and rewarding career option for students," he adds. Thiruvengadam P., Leader, Human Capital Advisory, Deloitte India, says,"It is observed that corporate leaders come from various disciplines, backgrounds and formal qualifications. What matters ultimately is the right kind of experience and cashing in on the available opportunities at the right moment."
Thiruvengadam identifies qualities such as a willingness to say no, an analytical bent of mind and above average communication skills as key to reach the corner office. Adds Misra: "As the world of business gets complex, no single discipline is geared to understand all of it. A CEO needs to know how consumers behave. Therefore, psychology and sociology need to be understood. Then there are technical applications, finance applications, corporate governance, law, human behaviour and international politics.
The MBA as a subject is multiple strands of knowledge and now even sustainability is taught." He says that while many of these strands are covered in an MBA, there are many surrogates that a non-MBA CEO aspirant can go for. The AV Birla Group often sends executives for management education programmes like the advanced management programme of the Harvard Business School.
It's a course that Y.C. Deveshwar attended after completing his engineering at IIT Delhi. Sandip Basu, Wholetime Director and CEO of Loop Mobile, says: "Being a CEO is not about an MBA but about leadership. Either you have it within you or you learn it."