September - 2001 - issue > Cover

From the sprawling triangular McKinsey & Co. conference room in Redwood Shores, Calif., one of the company’s partners, Anil Kumar, looked pensively across the Bay towards Oakland, a few hours before getting on a plane to go to Hyderabad, India, to attend the grand opening of the Indian School of Business. Affiliated with the Kellogg and Wharton Business Schools, the long, laborious process that led to this momentous occasion began in 1995 when Rajat Gupta, managing director of McKinsey’s operations worldwide, was being honored at IIT Delhi as the Alumnus of the Year.

At the time, Prof. V.S. Raju was the director of IIT Delhi. He had long dreamed of starting a business school on campus. He discussed his dream with Gupta, who was responsive to the idea. But because he lived in America, Gupta left Anil Kumar, then in charge of McKinsey’s Delhi practice, to work out the details with Prof. Raju.

However, as Kumar and Raju developed the concept it became clear that something more than just a business school affiliated with IIT was needed.

“From a national standpoint, what was more necessary was not actually creating a management center on a particular IIT campus, but really to create an international business school with professors and students from all over the world,” said Kumar.

One of the aims of the school would be to make it “world class,” in other words have it break into the top 20 of any business school listing. Currently, no business school in Asia has a place among the top 20. To fulfill these objectives, the school needed to be an independent institution. With this focus, Kumar called a close friend from business school, Anil Ambani of the Reliance Group and the two put their heads together.

The first step was to contact prominent business figures in India and enlist their support. That proved unexpectedly easy. “To our surprise, almost everyone we asked was very excited and ready to make a substantial financial commitment as seed investors,” Kumar said.

Significantly, all 16 investors, including Anand Mahindra, Adi Godrej and Kumar Birla, invested without asking to be recognized in any way. Academicians of Indian origin were contacted to fill faculty positions. Thirty CEOs of Global 2000 companies with combined market capitalization of more than $1 trillion were also contacted. According to Kumar, eighty-five percent of them agreed to be on the board of the school.

Andhra Pradesh Chief Minister Chandrababu Naidu’s support during the actual construction of ISB was crucial. “He made sure that the typical hiccups that go with working with administration and bureaucracy were smoothed out,” Kumar said. “People say there has never been a project like this in India. It has been less than a year from the day that the ground was first broken to its opening.”

Although based in India, ISB is not simply an “emerging market school,” Kumar pointed out. The curriculum focuses on three main areas: entrepreneurship, technology management, and business management. Each is structured around non-G7 economies in the sense that such economies are “not at the cutting edge of the developed world.”

The first batch of 130 students has begun taking classes. In the next few years that number is expected to grow to 520. Beginning in January 2002, the school will also offer executive education targeted toward talented mid-level managers who need a global exposure. It also plans to develop a Ph.D. program.

“The first five years we want to achieve our target; in the following years we want to improve quality continuously,” Kumar said. “Breaking into the top 20 will take at least 10 years.”