During a visit to the Indian School of Business (ISB), Donald Jacobs, Dean Emeritus and Gaylord Freeman Professor of Banking at the Kellogg School of Management, spoke with K Ramachandran, Thomas Schmidheiny Chair Professor of Family Business and Wealth Management at the ISB. They discussed how the Kellogg model came to revolutionise management education more than 50 years ago and lessons for the ISB in the Kellogg experience. K Ramachandran: Kellogg alumni have conferred on you the title of Master Entrepreneur. To me you have always been a master institution-builder. When you took charge of Kellogg, it was a little-known, small business school, and you built it up into the number one in the world. In those days, as I understand, business schools were seen as glorified trade schools.
What did you do differently?
Don Jacobs - When I became the Dean, I and a group of people I would talk to all the time -realised that three things were happening. One, we were globalising; second, IT was becoming more and more important, and third that IT costs were declining very rapidly. This implied that the markets would expand in size, and that we would be able to communicate and manage over larger distances. And if that was the case, then the world was going to be more competitive. More competition meant that real change was going to increase, and so it was clear that the model we used, not only at Northwestern but all over the country, was inappropriate because it was a case model. In a case model, what you do is you take a microphone and you scream: "Best practices", or "here is the way better companies do it". The problem is that if you use that as the basis for your education, you will in effect train people that are going to be out-of-date very quickly because things are moving very fast.
How then does one make B-School learning relevant to the real world?
First, we need to focus on what the world is going to look like in the future. Quite frankly, we have to worry about how to make changes in the curriculum more rapidly. Second, this change should be brought about in an appropriate fashion. To this end, you need people who do research at the frontier, because they know what the appropriate fashion is, i.e.what the most cutting edge and relevant material is. This means that the faculty has to be research focused. And to be a research-focused faculty, one has to be trained in a discipline. We have to hire people with experience. In the future we have to hire economists, statisticians, sociologists, psychologists, and mathematicians - people who are not completely but dramatically different from today's faculty.
All this sounds like a paradigm shift in the thinking of the top management. Absolutely. We had a paradigm shift all over. We changed the faculty; we learned a way to change he curriculum. And we made it easier for faculty.
Usually what happens is that when a faculty member has a new idea for developing a new course, he thinks about it, writes up the course, gives it to the department, and then the department thinks about it. The process for approval is long-drawn and longwinding. Sometimes it may take as long as eighteen months, and a lot of work, to get anything going. Here is what we say to our faculty ¬you have an idea, you develop a curriculum, then you are allowed to teach that curriculum as long as a number of students will take it, say twenty students or more. So it is a hundred percent entrepreneurial kind of thing.
Yes, the whole notion is if you want to teach a new course, develop a new course and after you have taught it twice, some people will come in and judge the course. If it works with the students, it is in the accepted curriculum. Up until now we have managed with a triangle - boss on the top, information comes to the boss, the boss tells everybody down below, "here is the way to do it. Right?" We believe the world has moved into what is naturally team-based. It is moving so fast that different parts of the team will be leaders depending on what they know. And so, now we have to teach leadership, and also connect to the new kind of teaching. To be able to make that sort of connection, students themselves have to want to work on a team.
Everybody is not a team player. Some people have sharp elbows, some people are loners. Besides being a team player, at Kellogg, you've got to be smart, and you've got to care about other people. We all knew, like all of our competitors, generic facts about our students - how well they did in college, their work experience, GMAT score, et cetera. But we wanted to know more. We were the first ones to interview our applicants. For us it was most important to know who these people are. We know how smart they are
We believe the world has moved into what's naturally team based but who are they? What are they interested in? What have they done? What do they do? What are their ambitions? And all that is a very important part of the choice of our student body.
This kind of innovation helped you to build Kellogg.
What do you think is the emerging trend in B-Schools today, especially since globalisation has gone to the next level?
I recall the first time that we were ranked number one, everyone asked ¬ now that we're number one, everyone is going to follow us. What are we going to do to stay ahead?
And I started to laugh. Because what they were just thinking was that the world is going to follow us, so we had better change. Change is constant, and that's what the system is doing. But the fact of the matter is you don't just want to change. We are doing the right things, so we just have to do them faster and better than the competition to stay ahead. We can't stand still. Over a period of time, we've improved the faculty very dramatically and the fact now is that the partners are very strong. Now it's no longer the Dean's Office that does the planning, because we can't plan for the whole group. The big thrust has to come through the department. What we have to make sure of is that the departments are connected with each other. Everybody in the School starts to agree with each other; they are part of one team; they feel they work with each other. So we're really working across our disciplines. The Dean's Office now becomes a facilitator. The ideas come from the departments and from the research-based groups. It is the Dean's job to provide the resources that they need to keep ahead. And we went from being poor to pretty rich.
Is there a similar trend in executive education too?
Executive education ought to mirror the kind of education that we think students ought to have because what we have set up is lifelong education. It should be a place where people come back to be retrained, brought back to the frontier.Would you say that MBA education and executive education are two ends of a continuum?
Yes, it is just coming back to the frontier. It is the same kind of management education that you are getting, except that you are bringing together people who come with work experience and have different kinds of capabilities than our first year graduates.
Our graduates, by the way, have had work experience before they came back to school. We don't accept anyone straight out of college.
When the ISB founding team met you, one piece of advice that you gave them, as I hear, was to go and talk to the Dean at Wharton too. What prompted you to suggest that?
ISB was a large project. And given the enormity of the project, one needs to be sure that there are others that would like to help as well. We found that some wanted to help, but they wanted to help alone. Others wanted to help but they were not large enough to have the resources to help. I decided that we should approach individuals rather than the institutions. So I asked the founders of ISB to talk to Deans. That was the easy way to do it. In my mind, we wanted to just globalise. I wanted our students to have a faculty with experience overseas. I did not want to hire a Chinese to teach about China and an Indian to teach about India. I wanted people who had a feeling for other cultures and other experiences.
We found alliances all over the world, and we had this great saying ¬ "the sun will never set on Kellogg [because] everywhere in the world, there will always be somebody teaching with a Kellogg model seven days a week."
In several ways, ISB is a unique education model. How difficult is it to move away from set patterns and build a model of your own?
It is not difficult but you have to understand that you are going to have some differences.
I can tell you about why we developed the way that we did. We did have a strategy in place but often things happened that we did not expect. Let me give you an example. When we started to interview, remember we were a second-class institution. At that time if you were admitted to Kellogg and you had other offers from Harvard, Stanford, Wharton, Columbia, you would naturally go to any of these places. At that time, we weren't in that top five sphere.
From the start, we had the sense to listen to the students. People warned me, "you can't do that, you can't trust them." I always said, "They are our students, I trust them." So we went on and on about this. Other schools interviewed students after admitting them. I have always maintained that it was the wrong time. You interview them before you admit them. Well, one can't go around the world to interview students and so amidst a lot of scepticism, we had our online interviewing system. These are all things we did that were completely unexpected. It wasn't real genius that did this. It was just something that was working for us and we said, "we just don't understand how it is working that way - let's go look at it and then if it is a good thing, then let's just use it. " The main take away from this conversation for me was that the constant is change. In the same fashion, the ISB has witnessed phenomenal change during the last eight years - we are here now, we are expanding to Mohali, we have plans to grow further, new programmes and so on. What sorts of challenges should we be worried about? And based on your understanding of what has happened here and what is happening now, what kind of advice would you give to ISB?
Oh, it is simple. You want to keep looking at what it is you are doing that you are proud of and that you think is going well, and then make sure that you do the things that you do well. Emphasise those and go and do other things as well, as the world keeps changing. You can't stick with what you alone do; you have got to keep changing.
We do things now that we would never ever have dreamt of doing in the past, and we have dropped things that looked great at the beginning but turned out not to be so good. It is like having a competitive advantage in business, and you emphasise your competitive advantage.
[This article has been reproduced with permission from ISBInsight, the research publication of the Indian School of Business, India]