There is sound reason why Dr Bala V Balachandran, a JL Kellogg Distinguished Professor of Accounting Information Systems and Decision Sciences at the JL Kellogg Graduate School of Management, Northwestern University, is one of the most sought after men in the boards of top Indian companies.

“We benefit tremendously from his presence on the board,” says Adi Godrej, Chairman, Godrej Consumer Products Ltd (GCPL) says about Dr Bala. “He’s an academic of repute, and he brings to bear his knowledge of finance, cost accounting and strategy, of what works and what doesn’t work.”

Back in 1973, when the Indian Institutes of Management were in state of infancy, the Annamalai University-educated Bala V Balachandran joined the Kellogg School of Management as the first Indian member of the faculty.

Now 32 years later, Dr Bala V Balachandran is arguably India’s biggest international figure in management education. After founding the flagship program at the Management Development Institute (MDI), Gurgaon, he went on to single-handedly set up the Indian School of Business (ISB), Hyderabad. His current muse is the Chennai-based Great Lakes Institute of Management (GLIM), which he nurtures like a baby when he is not in the US teaching at Kellogg.

In an exclusive interview to PaGaLGuY.com’s Allwin Agnel and KVJ Subramanyam at Chennai, Dr Bala V Balachandran talks about himself, GLIM, Indian B-schools and more.

In this first of the two-part interview, we start off by giving Dr Bala a brief lowdown on the who, what, why of PaGaLGuY.com and its progress over the years. His following response catches us unawares…

Beautiful. That’s good. Actually, to be frank with you I do not know about Pagalguy.com directly. I have two sons. One is an Assistant Professor at Columbia Business School and the other son is a Harvard Medical graduate and fulltime faculty there. He has nothing to do with business schools, but he somehow knew about your organization. He is fond of GLIM and he showed me in Chicago a discussion on the Pagalguy.com forums where a student at GLIM was asked about the deficiencies in the institute. I was really surprised by the student’s reply to the query. (The query) was about how the management was going to fix shortcomings such as the lack of a proper campus. He (the GLIM student) wrote back saying that the weakness, if any, was the campus but that it was going to be solved in a year or two. That was my first exposure to Pagalguy.com. Since then, I’ve seen it a couple of times more in other places too. It was a nice experience.

How did the idea of Great Lakes come out and how did it get fructified?

In case you are aware of Great Lakes, probably no other institution has achieved in seven months what we have achieved – from planning to implementation in seven months flat. My experience in converting the National Management Program of MDI-Gurgaon into a PGDBM program (1991-1996), and in setting up the Indian School of Business at Hyderabad (then by a different name) came in handy at Great Lakes. I wanted to have a business school with a permanent campus but in a 12-month format. This was because I felt, why should an 18-month program (basically all two-year programs are effectively 18-month programs) exist when all students are successfully placed after the 15th month and hardly any student pays serious attention to the curriculum? And I do talk of what I call the Money Value of Time, as opposed to Time Value of Money. If these students have had some prior work experience, then we can condense the program into a 12-month format. B-School contact hours can be intense and impactful and the courses can be packed in 12 months, save the occasional holidays. If this is done, then probably the second year salary can be enough for all the tuition fees of the program. Therefore the opportunity cost, if you look at it, for a two year student, is too much. I was convinced we had to have a one year program.

Rajat Gupta (ex-CEO, McKinsey) was my neighbour in Chicago and I discussed my idea with him. He also thought on similar lines and suggested doing this as IIT-Delhi’s expanded Business School. I disagreed with him as I felt that a B-school has to be an independent outfit like an IIM but focused, probably, in Mumbai as it is the country’s business capital. A lot of other things happened and as a result the proposed school ended up in Hyderabad. I handled designing the curriculum, finding the new dean, recruiting the faculty there. I also taught there for the first batch.

All the while I was getting calls from my friends in Chennai who wanted me to set up a world-class Business School in Chennai, a knowledge city, since it had always lacked one. I wanted to combine the best strengths of international B-Schools and do it on a world-class quality with a low-cost fee-structure. And that is the reason why we have priced the fees at GLIM at IIM level but quality being world-class. I’ve been at the Kellog School of Management for the past 32 years and this association has helped me in bringing the best of faculty and speakers to Great Lakes.

After creating something of the size of ISB, which is massive, extremely well planned, with a lot of funding put in, how tough was it to create something like Great Lakes?

You see, the point is simple. What is a Business School? Is it brick and mortar? Or, a few faculty who are dedicated and determined to create an institution? I can make do even without an air-conditioned building. Yes, at that time (ISB), there was lots of money, and we did it. As a matter of fact, I say, General Motors produces Cadillac but it produces Saturn also. There’s room for a Cadillac and a Saturn as well among customers. So therefore, I felt, let me do a low budget thing. It is a question of faculty that counts and not the building where you operate. Of course I got a very functional building, but I am not going to build a massive campus over hundreds of acres. As a matter of fact, when the Chief Minister of Tamil Nadu offered me 30 acres, I told her I needed only half of that. Because maintaining 15 acres of empty space is going to cost me as I cant’ leave it as an eyesore on the campus. This is the way I can effectively and efficiently run a business and Great Lakes, right in the first year has a net positive cash flow. This is a not-for-profit institution. The amount that it has generated goes to the building fund. Yes, we need funds for the buildings now. A few people have already come forward with voluntary donations while a few others have taken responsibilities for raising funds. I don’t want to say I have a Taj Mahal in town. For a business school you want a business school building. You don’t need a Taj Mahal. Look at IIM Ahmedabad. Fantastic campus. Is it a world-class building? No. Fully functional? Absolutely yes. My model is IIM Ahmedabad. My role model is Don Jacobs, Dean (emeritus) of Kellogg and Ravi Mathai, who started the IIM Ahmedabad. I worked with him, taught with him. I also know Sam Pitroda. But Ravi Mathai, as a bachelor’s degree holder, in my opinion, built that institution and created a legend and made it a sustainable profitable operation.

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Something very unique about Great Lakes, is the kind of faculty that comes there. Simply unheard of in Indian B-schools.

Yes. How many other schools have a Nobel Laureate (Prof Finn E Kydland, the economics Nobel laureate for 2004) teaching, who is now the deputy director of the Yale-Great Lakes Research center that we have established at Yale University. We also have the Yale President (Dr Richard Levin) coming to Great Lakes. Recently we had the President of the Northwestern University and the dean of Kellogg coming and spending time with the students here. In February, we have the president of Illinois Institute of Technology coming here. We also have another Nobel Laureate coming here. We’ve also had people like Vivek Paul coming over and spending time with the students. My younger brother is the Chairman of marketing at Stanford Business School, Seenu V Srinivasan and he also teaches here. My son, a fulltime faculty from Columbia Business School, also teaches here.

Don’t the international faculty persons who come to Great Lakes charge exorbitantly?

All the people who came here are my personal friends. And that is why they are coming. For example, the Nobel Laureate (Prof Finn E Kydland) did not charge one penny. I paid him just the business class ticket.

And will you be able to sustain this year-on-year?

You Bet. And I will leave a legacy. And you will see that. Not just these people, there are more coming and I am increasing the number of these speakers. If you see this year’s faculty, it is better than the last year’s faculty. And I don’t see why I should not keep doing that. So long as I am alive. But, after me, I have to create a system and therefore I am now grooming others. This is Team Leadership. I don’t make decisions, even though I can. There is an executive committee that decides everything.

What do the international faculty who come to Great Lakes feel when they come and teach here?

They feel very good. Because they get amazing students. Very intellectually challenging. And most of the international faculty coming, with the exception of people like Finn Kydland or Sony Simpson, most are Indians. We are all Indians. Fortunately, we all had a good time and went to the US. Then many of us feel like doing something back to India. Slowly we have been able to bring some Americans here.

Half a decade down the line, you’ll have an amazing campus, infrastructure and facilities. Would these very faculties be then willing to teach for free?

True. At that time I’ll pay them their market price.

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With your international stature, are you a one-man army?

(Smiling) It may be looking like a one-man army. But if I create a system where I pass all my contacts and social capital to the rest of the people, it may work. And that is the reason why I have an amazing Business Advisory Council. We recently had our first graduation ceremony where Jamshyd Godrej was present too. Then, every student made sure they hugged me or touched my feet. At which B-school graduation would you see something like this? Not that I am a big deal or anything, but the point was I gave myself to them. Every week I communicate with them on email basis. They are my nephews and nieces. They call me Uncle Bala. I talk to them on all issues they bring up, be it personal or be it professional. Therefore, I am part of their life. Look at this. My flight to India was landing at 2 am. There were 70 students standing at the airport to receive me at that odd hour. Why do they do that? In how many places can you see even one student going to receive their professor? The reason is, I am not a professor. I am their relative. I am their real uncle. This is not just lip-service. I believe in it and I do it. And that’s how it is.

Is Dr Bala V Balachandran bigger than Great Lakes?

I don’t know. But I feel, India needs some amazing figures who want to make money but also want to give. I want people to make money not to live but to give.

What future plans do you have for Great Lakes?

We’re getting subsidized land from the Tamil Nadu Government. The Chief Minister is very happy as I am fulfilling her dreams also. She too wanted a top Business School in Chennai. She is also telling other people how Great Lakes can facilitate entry of major companies into Chennai. We may also be doing some training for the Government of Tamil Nadu. Before I leave for Chicago on August 20th, I will have the land. With people like S Sadagopan who built the IIIT Bangalore in one year, I think we will build the first phase in less that a year. And the second phase should be over in the next one year. The final campus should be functional some time in 2007.

With only three faculty persons, there is a shortage of full-time faculty at Great Lakes.

We are four and today I got my fifth faculty. I want to have twenty full-time faculty. By end of this year I want to have five or six. The faculty student ratio at Kellogg is around 1:9 and we’ll be having a similar ratio. Note that I am not having a lot of students.

What is the emphasis on research at Great Lakes?

There will be a true research section. We are going to have me, besides Prof Shyam Sunder of Yale University and Finn E Kydland. We also believe in creating faculty for other business schools. We have an acute shortage of world-class faculty. We won’t be taking in more than four to five PhD students. They will be going to Yale University’s New Haven, Connecticut campus, do their coursework there for 1-1.5 years; come back here and do their thesis. So the PhD program is the next thing that we are going to start.

You also have started an Executive MBA program. Could you tell us something about that and other programs that you are planning to start soon?

Right now, this institute has also created the Executive MBA program. We have 28 fulltime people enrolled in that. The next batch is coming up. Rakesh Singh, who was at Narsee Monjee (Institute of Management Studies, Mumbai) is going to be the Director of this course. He’ll also be teaching them. The first module was taught entirely by the US faculty. The Executive MBA program is a two year program. Three visits to the campus, two weeks to stay in every four months, and five courses in each visit. So 15 courses each year. We are also going to have more MDPs (Management Development Programs). We also want to create in association with other organizations, a program on supply chain management.

And shortly we are also going to make public a tie-up with a leading Chinese University for exchange of faculty, exchange of students and more. I am a firm believer that understanding the Chinese culture, language, way of business is imperative in these days. That’s why we have made mandarin a mandatory language here at GLIM.

(To be continued…)

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