Steering a course through the chaos

This article was first published in Higher Education Policy Institute

It’s hard to remember a time when universities faced so many unknowns. Will the Augar Report recommendations ever become reality? How much money will the sector have? What will Brexit mean? Will the economy nosedive? What kind of government will we have by Christmas?

And we can overlay on to those questions all the ‘usual’ uncertainties facing a university. Will students apply for our courses? What will other universities do? Will overseas students be attracted elsewhere? How will we do in the REF?

Uncertainty is the new normal

Our annual survey of UK vice-chancellors shows how much this is affecting university decision making. But contrary to the myths about ivory towers, universities have always been good at adapting to changes in the external environment. Part of the huge success of the sector has been its ability to respond – as it did to the relaxation of the Oxbridge monopoly in the early nineteenth century, to Robbins in the ’60s, to mass expansion in the ’90s, and to competition and fees in the last few years. And our survey shows that most vice-chancellors remain optimistic that they will find a way through again.

They are nevertheless asking themselves how they can create new student offers, shut down old ones, recruit new staff, remodel research capability, or make expensive changes to campuses when so much is unknown. There are three principles that might help.

1. Financial sustainability is a fixed point

Without financial sustainability nothing else can be done. Vice-chancellors know that income must cover costs and create the ability to invest for the future, and that means having a full understanding of the drivers of both revenue and spending. But less than a quarter of vice-chancellors we surveyed thought they had achieved financial resilience. That makes efficiency critical, and everything from payroll to developing new programmes must be focused on the mission of the institution and done in the most effective way.

2. Manage risks – but be bold

Now is surely the time to innovate. And we are seeing innovation all over the sector – new academic partnerships, new modes of delivery, new programmes, new approaches to delivering professional services. And yet our survey revealed many vice-chancellors have a nagging feeling that these initiatives are often either too peripheral to the core business of the institution, or too slow to have the desired impact.

Innovation will only make a difference if there is an understanding that not all new ideas will succeed. Universities must be willing to embrace a portfolio approach to developing new ways of working – whether teaching, research or back office – and accept that some ideas will be runaway successes, some will be worthwhile but no more, and a few will fail and should rightly be consigned to the lessons learned file.

3. Agility is the key: be ready to change, and change again

It will become increasingly vital for universities to understand what students, funders, staff and the public value, and adapt to that better and more quickly than their competitors. Agility will perhaps become the single greatest determinant of future success. But it cannot mean simply responding to the latest fad. Agility must be seen in the context of a clear sense of purpose, a statement of direction and the values within which the university operates.

Agility will mean having data that provides an understanding of what attracts and retains students. It will mean having governance processes in place to decide quickly and confidently which changes to make and which to avoid. It will mean ensuring that spend on technology and estates specifically considers the need for repurposing in short timescales. It will mean having an organisational model that allows, for example, multi-skilled pools of professional services staff to be deployed wherever the work is. Above all, it will mean a culture in which flexibility is the norm and rigid boundaries of discipline, organisation and hierarchy are no more.

Here comes the future!

With no sign of uncertainty going away, the hidden enemy now is strategic drift. To combat that drift, university leaders should focus on financial sustainability, develop a new approach to risk taking, and create institutions that are much more agile. Their ability to lead and cajole their universities into following them on that journey will, perhaps, be the biggest determinant of future strategic success.