(This article was first published in the Jan-Feb 2014 edition of Aurora.)

Getting an MBA has long been a popular pursuit among several groups of people; those who are genuinely interested in business and management as a career; those who choose it in lieu of the professions (medicine, law, accounting and engineering); those who already have a professional degree and believe that an MBA can help further their career; and finally, people who think it is their ticket to a top job with a six figure salary.

However, the supply of MBAs in Pakistan is outstripping demand in terms of the number of jobs available. There are no official numbers to support this claim but anecdotal evidence suggests that many MBAs struggle to find jobs, are forced to accept employment outside their area of study, and are paid less than what they expect.

In an informal online survey conducted by Aurora in January 2014 to determine the gap between business school graduates’ expectations and job market realities (complete results on auroramag.wordpress.com/ mbasurvey), 60% of respondents said they had faced medium to serious difficulties in finding a job while only 23% ended up in jobs they actually wanted. Twenty-four percent of respondents cited lack of opportunities and/or a surplus of candidates as the major reasons for their inability to find a suitable job, while six percent said that recruiters were ‘business school conscious’, preferring Institute of Business Administration (IBA) and Lahore University of Management Sciences (LUMS) graduates over others.

It is no secret that the cachet of top business schools such as IBA and LUMS can take students and their careers a very long way even in a market where there is a dearth of opportunities. While this is partially based on the schools’ reputation for consistently producing a superior crop of MBAs, these institutions are also keenly aware of the demands of the job market and the need to prepare students accordingly.

Dr Ghufran Ahmad, MBA Programme Director and Assistant Professor at the Suleman Dawood School of Business (SDSP), LUMS, says that the School monitors its success based on how many students find jobs as soon as they graduate; the numbers look pretty good as 80% of LUMS graduates are placed in companies either before, or within three months graduation.

In contrast, 21% of the respondents of our survey, all of whom graduated from second or third tier business schools, said that their university’s lack of job placement facilities made it difficult for them to identify suitable opportunities, and in spite of having an MBA, they did not have the skills and ‘references’ necessary in order to make the cut in top-notch companies.

The top business schools have two ‘Rs’ in common: rigour and relevance. Both go hand in hand in preparing students for the eventual demands of their careers.

Haroon Waheed, GM Group HR, Fatima Group of Industries and former HR Director, Unilever Pakistan says that while there are lots of MBAs in Pakistan, “very few people actually understand business and contribute to its growth and development.” He believes that most business schools in Pakistan are “just money making machines, giving people papers but not knowledge.”

This view is echoed by Leon Menezes, former GM HR at Shell Pakistan, and currently Professor of Practice at IBA. In his opinion, most MBAs who apply for jobs simply don’t have the skills necessary for those positions, as a result recruiters prefer to hire IBA and LUMS graduates because they are far superior to their counterparts from other colleges.

Based on these responses Aurora set out to examine the key elements that set these business schools apart, particularly when it comes to preparing students for future careers; we also included up-and-coming business school, KSBL (Karachi School for Business & Leadership) in the assessment, which by virtue of its association with Cambridge University’s Judge School of Business and its faculty (made up mostly of foreign qualified PhDs) is already being seen as a force to be reckoned with. (See the Aurora interview with Dr Shaukat Ali Brah on page 24 for more on KSBL.)

1) Taking the best of the best

One way in which the top business schools ensure the future of prospective MBA graduates before teaching even a single course is by taking in only the cream of the crop. Doing so means that not only will students learn from the faculty, they will also benefit from the experiences of their cohorts. To this end IBA, which revamped its entire MBA programme in 2010, has made it mandatory for all MBA applicants to have two years work experience, while LUMS and KSBL list it as a preferable qualification for admission.

Dr Nasir Afghan, Director of the MBA programme at IBA says this requirement has “helped in admitting students with a mature and assimilative mindset and a rich and diversified background.”

Humayun Javed Khan, Head of Marketing and Communications, KSBL, says that while work experience is preferable, inexperienced people are admitted if they are “exceptionally good; we want diversity in our class as this really adds value to debate and discussion in the classroom and students learn how to handle each other.”

Menezes maintains that besides the university’s faculty and facilities, having good cohorts to study with is crucial to a graduate’s eventual success in the job market; “it becomes a self-perpetuating cycle,” he says. “The top universities have strict entry requirements so everyone around you is going to be quite superior even before you start.”

It seems pertinent to mention two points about MBA programme admissions. Firstly, while the top business schools want an intake of bright students, they follow a need-blind admission policy offering scholarships and other forms of financial help to candidates who make the cut but are not able to afford the tuition. Secondly, and this is to reiterate a point made by Dr Brah on page 24, institutions such as IBA, KSBL and LUMS do not make any money out of their MBA programmes (it is the executive programmes that subsidise the degree programmes). These qualities set them apart from the plethora of other business schools across the country which treat business education as a profit-making proposition, without necessarily paying a great deal of attention to the quality of student intake.

2) Rigour and relevance

The top business schools have two ‘Rs’ in common: rigour and relevance. Both go hand in hand in preparing students for the eventual demands of their careers. Ahmad says the rigour comes from the courses and curriculum (in the first year of the MBA programme, LUMS expects students to take on a gruelling schedule of 11 core courses over two semesters), which are designed to demand energy, time and attention and build a student’s ability to work as a manager.

The relevance factor is built into the curriculum and the teaching methodology in a number of ways. First, the schools offer several elective courses in the second year of the MBA programme based on current job market trends; currently they include digital marketing, supply chain and retail management, entrepreneurship and Islamic banking and finance. These electives take the place of specialised MBA degrees (think MBA in Advertising, MBA in Finance, etc.,) which the top business schools used to offer in the past but are now firmly eschewing.

Khan says, “The MBA is a general degree and if students have specific interests, they can choose electives. This is the international way.”

Additionally, all three schools are strong proponents of the case study method of teaching, which gives students a sense of real world decision making and the complexities involved. Both Afghan and Ahmad say that all courses at IBA and LUMS, whether taught by adjunct or resident faculty, must use case studies. These cases are used as a base for classroom discussions and projects aimed at teaching students, as Menezes puts it, “how to approach and diagnose a situation and propose alternative solutions.” It is important to note that most second and third tier schools do not employ the case study method of teaching in their MBA programmes.

While KSBL doesn’t currently have any industry professionals as adjunct faculty, IBA and LUMS say they follow a stringent screening process for these professionals ensuring that not only do they have the right qualifications, attitude and communication skills for the job but also by thoroughly vetting their course outlines in staff meetings.

Another way in which the IBA combines both rigour and relevance is the MBA Experiential Learning Project (ELP) which requires students to execute a challenging assignment within the real life business environment by conducting research, interviews and focus groups. Current year projects include understanding male shaving habits for Gillette and a supply chain project for the KESC.

3) Faculty matters

Although the top business schools give special attention to hiring teachers, preferring applicants with PhDs, it is the teachers’ ability to stay abreast of new ideas and developments that gives them the edge over their counterparts from other schools. All three schools encourage their teachers to undertake research and provide incentives for those who publish in leading scholarly journals.

The advantage of this often esoteric research, says Ahmad is that “professors stay up to date with the latest knowledge in the field of management.” Brah adds that when professors “stop writing papers, [they] stop reading and when [they] stop reading, [they] stop teaching.”

Apart from encouraging resident faculty to remain updated, IBA and LUMS hire industry professionals as part of their adjunct faculty to build further relevance into the curriculum. Hiring visiting faculty is a common practice at many business schools and one of the greatest criticisms levelled against them is that due to a lack of monitoring, many professionals turn up for their classes unprepared or worse yet, don’t show up at all!

While KSBL doesn’t currently have any industry professionals as adjunct faculty, IBA and LUMS say they follow a stringent screening process for these professionals ensuring that not only do they have the right qualifications, attitude and communication skills for the job but also by thoroughly vetting their course outlines in staff meetings.

KSBL bridges the gap between academia and the professional world with a seminar series where a foreign professor is asked to deliver a lecture, followed by a presentation by the resident faculty, after which there is a discussion among top local CEOs about the practical application of the theory.

The quality of their faculty is what really sets the top business schools apart from the rest which often hire teachers based on personal contacts and references without properly vetting their credentials. These under qualified individuals inflict themselves on students who find that even after two years and thousands of rupees worth of a professional education, they simply aren’t ready for a career.

4) Sustained industry contact

One of the key characteristics of the top business schools is sustained contact with the industries in which their graduates will eventually work. This contact takes two forms.

In the first instance, schools involve CEOs in school policy and curriculum review and development to ensure relevance; IBA, for example has a CEO Advisory Board which boasts names from the top local and MNC companies. These CEOs meet on a six-monthly basis to “provide feedback on the programme and the graduates’ performance,” says Afghan.

Another form of industry contact involves facilitating student interaction with industry leaders so that they can learn and network at the same time. To this end, KSBL has a rather unique CEO mentorship programme, whereby two or three students are attached to the CEO of a local or international company (participating CEOs include Ehsan Malik, Chairman, Unilever and Asif Jooma, CE, ICI, among others) for a period of time. The CEOs interact with students outside the classroom environment to give them some sense of business issues, decision-making and time management skills.

Contact with real world managers provides an invaluable source of learning for students who are otherwise often stuck in academic silos; it allows them to connect their textbook knowledge with a real time business environment, which is crucial when it comes to a professional education.

Similarly, Ahmad says LUMS has a number of platforms through which alumni are invited to speak about emerging market trends and panel discussions are organised with specific industries.

Contact with real world managers provides an invaluable source of learning for students who are otherwise often stuck in academic silos; it allows them to connect their textbook knowledge with a real time business environment, which is crucial when it comes to a professional education. Business schools that do not facilitate this type of interaction and exchange are guilty of seriously short-changing their students.

5) Placement and recruitment

In addition to encouraging sustained interaction with big business and industry, the three schools have placement offices with a dedicated staff to match students with job opportunities.

Ahmad says the MBA Placement Office (MPO) at LUMS starts developing profiles of each of its students from day one to ascertain their strengths, interests and personality; this is followed by résumé development and helping graduates reach out to LUMS’ stable of over 250 recruiting partners through networking nights, externships where graduates can visit organisations, all day recruitment and virtual meetings.

The Career Development Centre at IBA provides résumé writing workshops, conducts mock interviews, organises career fairs and publishes job opportunities as well as a Graduates Directory which is sent to all potential employers.

Although the first batch of KSBL MBAs will be graduating in June 2014, Khan says the School has career counselling and placement facilities in place and is very encouraged by the fact that “corporate heads have started showing an interest in our students.”

In spite of all these efforts to prepare students for professional life and to bridge the gap between academics and careers, there is still criticism about the quality of business education, business schools and graduates based on the following points:

Quality of business graduates requires improvement: Khan from KSBL says that his interactions with top notch companies have revealed that they are not able to attract good quality graduates. Khan says that while IBA and LUMS have done a “marvellous job of improving and maintaining the standards of business education, KSBL will raise the bar even further.” He believes that although people prefer IBA and LUMS grads, “there is room to become even better.”

Case study method creates delusions of expertise: Menezes says that despite its obvious advantages, the case study method of learning leads students to believe that “they are very smart, whereas in a case study there is no right or wrong answer. In the real world, decisions have very real consequences.”

The reputation of a good business school is built over time but concerted efforts and some intervention by the Higher Education Commission can make it so. There is nothing wrong with a business school being business savvy and making money off of its programmes, as long as that is not the primary objective.

Graduates have unrealistic expectations: Menezes says that MBAs often have a very strong sense of entitlement and think they are “ready for strategy or brand management without rolling up their sleeves and doing the work that is the foundation of a good career.” Furthermore, many MBAs believe that just because they have a degree and a good GPA they should automatically get a job and when they don’t, they fail to understand why. Menezes says he often tells graduates that “people don’t hire degrees or GPAs, they hire the person; if you go for an interview and your foot comes out of your mouth, your degree and where you got it from really doesn’t matter.”

Graduates have an ROI mindset: Waheed says that in the early years of their careers, MBAs should focus more on gaining knowledge and experience and less on money. Unfortunately, a lot of business graduates are very eager to recover their investment in their education as soon as possible and therefore expect high salaries. While Afghan and Ahmad say their graduates can expect Rs 68,000 and Rs 91,000 respectively on average in their first job, making for a very respectable return on investment (see chart above), 45% of the respondents on the Aurora survey said that their starting salary was between Rs 20,000 to Rs 40,000 which is well below the average of the top business schools.

Too many MBAs, not enough suitable jobs: Although this is not exactly a criticism of the business schools or the graduates themselves, the fact is there simply aren’t enough jobs for all the MBAs coming out every year or at least, not the kinds of jobs that MBAs expect. As an aside, 73% of respondents in Aurora MBA survey said they wanted to work in a multinational FMCG after graduating, showing the very narrow view that MBAs have of their career prospects; only 20% of respondents actually ended in their desired jobs. Yet, despite the actual and perceived dearth of jobs, Khan says that Pakistan needs at least five to 10 more IBAs, KSBLs and LUMS’! What is Pakistan to do with these surplus MBAs? The answer lies in entrepreneurship which all of the business schools are focusing on. Ahmad says that in the past business schools used to prepare students for careers in big business but with the shortage of opportunities, there is greater focus on building an entrepreneurial mindset. “In addition to big business, new opportunities have to be created continuously; this has always been the function of SMEs which play an important role in any economy.” Khan agrees, “Our focus is not just on jobs or careers, we are focusing on entrepreneurship and leadership as this will create capacity and opportunities in the social and commercial sector.”

When all is said and done, there is no doubt that every individual business graduate’s skills and abilities will ultimately determine their success in the job market; however the value of a reputable school that puts a premium on bright students, well qualified teachers, solid pedagogy, a relevant and constantly updated curriculum and sustained contact with the business world, cannot be overstated.

Obviously, it is not reasonable to suggest that all prospective business graduates go to a top tier business school as, apart from all the other factors that make this impossible, there simply are not enough such schools to accommodate them. The only workable solution is to improve the standards of the plethora of other institutions which offer a business degree without necessarily being committed to turning out quality graduates.

The reputation of a good business school is built over time but concerted efforts and some intervention by the Higher Education Commission can make it so. There is nothing wrong with a business school being business savvy and making money off of its programmes, as long as that is not the primary objective. For the time being however, the majority of business graduates will have to suffer the consequences of their business school’s lack of commitment to turning out MBAs who are ready for the job market. Perhaps 2014 will be the year when change happens.

Marylou Andrew is Head of Product Excellence at Hobnob. marylouandrew@gmail.com