The Indian Institute of Management, Lucknow, is set to become the first IIM to switch to a compensation system that will have both fixed and variable components, with the latter intended to incentivise research. At a time when even global business school leaders are being persuaded into some radical re-engineering by the economic crisis and increasing competition, while evidence is growing that schools with stronger research faculties produce better-paid graduates, the IIM-L move definitely merits applause. Of course, it will see criticism from conservatives who decry every rise in fees, every change in curriculum and testing, and even the march of consulting work. They will say the focus should be on skilful teaching, point to all the castigation of business schools heaping ?bad theory? and ?scientific? research instead of concentrating on what students will really need as managers. These are points to be noted. But if research is understood in a suitably holistic way, then there can be no doubt that a facultariat that?s in more dynamic touch with variegated environments would only churn out students in better touch with their times. For example, the Association to Advance Collegiate Schools of Business, a global accreditor of business schools that reckons there are 1,500 business schools in India, has suggested that popularising of management ideas or attention from news media should be credited at par with journal articles. Carving out niche research centres in renewable energy, real estate etc is another suggestion. There are many more out there.
Change comes at a cost. According to The Economist, Yale?s curriculum reform cost up to $5mn while Stanford?s entailed increasing the faculty by up to 15%. Yes, only elite institutions can pay up such costs. But the IIMs enjoy an elite status in India. They should be going where mid-level schools can only dream of going.