To stay global, we have to match what other business schools are doing to get the top faculty, says Rajendra Srivastava, who recently took charge as the Dean at the Indian School of Business. A renowned marketing expert, Srivastava was the Provost and Deputy President (Academic Affairs) at the Singapore Management University before joining ISB. He spoke to BLonCampus about his new role, Indian e-commerce, and start-ups in a one-on-one. Excerpts:
What is on your agenda after taking charge as Dean at ISB?
One of the things on the agenda is how we collaborate with industry and government. As we drill down and talk to companies and the public sector, we will explore further the role that ISB can play in shaping not just the students in classrooms, but also the larger canvas of skill development.
We are looking not only at what India needs to do, but also what India can do across emerging markets. We are also juxtaposing what we do and comparing it to how things are being done in Russia or China.
Additionally, emerging markets have also been an area of focus. We recently launched The Centre for Emerging Markets Solutions at ISB to put due emphasis on these economies. So, when we are looking at issues relating to the emerging world, we are trying to look for the ‘next practices’.
ISB boasts the top faculty talent in the country. What is the key to attract the best faculty?
When it comes to faculty, there is global competition. And it doesn’t end there. We have to make sure that even after hiring accomplished faculty, they stay competitive. For us, this competition is in terms of research, because an idea that is five years old might be too old and, thus, we have to continuously keep innovating. Our promotions are not time-based. Our rewards system is based on continual research and improvement. So, to stay global, you have to match what other schools are doing around the world.
Moreover, because we have good students, it is easier for us to attract faculty. And because we have great faculty, the good students choose to study at ISB.
Is learning at ISBbased on a particular principle or pedagogy?
There are three principles:
~~ Balance between theory and practice. We need insights from practitioners and many of our students come with intense experience across industries. Thus, our classroom learning is complemented by the students’ experience in industry.
~~ Insights from the West as well as insights from the East. It is common knowledge that concepts such as ‘Just in Time’ and ‘Lean Manufacturing’ originated in Japan. However, few know the origin of this thinking is actually from the US. So, as academics, one of the things we offer is insights that come from across industry.
~~ The third element is impact. On the industry side, much of what we have to do in efficiency and effectiveness is very integrated.
How do you intend to create impact?
We have four institutesat Mohali — the Max Institute of Healthcare Management, Munjal Global Manufacturing Institute, Bharti Institute of Public Policy and Punj Lloyd Institute of Physical Infrastructure Management. They offer certificate programmes that are focused on public policy issues. We also have a programme on business analytics which is just as valuable for the Centre’s Digital India initiative as the manufacturing programme is for 'Make in India' and policies related to it.
But a lot of work is really done in the private sector. We also need to have an impact on how business is done.
We are looking forward to working with the financial sector on both sides — retail banks and the kind of investments that are needed in industry. The big disadvantage that Indian industry has is the high cost of capital. How much interest do our companies pay to the banks? If they are sound, companies with impeccable records are still paying 12 per cent interest. Then, if they are going to have another margin of 8-10 per cent on top of it, they need a margin of up to 20 per cent in interest. We need to bring that down. Either that, or use the money more efficiently.
The e-commerce industry has been facing turbulence in recent times. Do you see any consolidation happening in the sector?
This is just the beginning of the e-commerce life cycle. Today’s e-commerce is just a fraction of what and where it can be in 10 years. There will be a lot of turbulence, there will be consolidation and new entrants, too. But very often, when we look at e-commerce, we focus on the technology, the search engine, and the transaction side. The bigger side of e-commerce is going to be a transformation in the supply chain itself.
If you take Flipkart, most of the things sold on the platform are things like mobile phones. Today, only a tiny fraction of these are being sold online as compared to what is possible. So while there will be consolidation, and companies will be bought out, five to ten years from now, the e-commerce industry will come out bigger and stronger.
Which sector holds the maximum opportunity for growth for start-ups?
You have to look at where the opportunities are. There is certainly a big opportunity in retailing; but the efficiency of India's supply chain in food and related products is horrible. We don't have a good warehousing system; we don't have a system that converts produce into packaged goods quickly. And, according to estimates, around 35-40 per cent of India’s food production goes waste because of inadequate warehousing. Just imagine if, instead of one-third, one-sixth of the produce was being wasted, productivity would increase to a great extent.
Now we need to move on from selling unfinished goods, such as vegetables, etc., into packaged food products that have longer shelf life. If I have a shop with five weeks of inventory and I am losing 5 per cent of it because they are perishable and I have to pay the bank 12 per cent in addition to the that 5 per cent, it becomes really expensive to do business.
So, we can look at innovation, while managing the supply chain to minimise the amount of money locked up in the system. It will also increase the value of goods as we go through the supply chain. For example, in moving from unpacked to packaged vegetable to pre-cooked foods, at every step in the supply chain, the value increases and that ups the value of agri-business of the whole country. And just as e-commerce is creating thousands of jobs in the courier business, very many jobs can be created in the agri-food sector as well.