Features: November 12th, 2010

By Sandra Buckley

Commercialisation is not a new concept in the Higher Education (HE) sector. For well over ten years there has been much talk about the marketisation of universities, including varying levels of concern and opposition. However, in the face of HE budget cuts of £200million and individual institutions expecting an average funding shortfall of 26%, the financial pressures are now more acute than ever before.

Relatively little has been written about the views of those inside universities moving towards increased commercialisation, and the challenges facing Vice Chancellors in their role as leaders of significant numbers of diverse staff. Berkshire Consultancy Ltd commissioned some research amongst Deputy Vice Chancellors (DVCs) to explore these issues.

The research comprised interviews with 30 Deputy Vice Chancellors and their equivalents from a cross-section of UK universities, broadly grouped as Russell Group, New and Red-brick/other. Sandra Buckley, Principal Consultant at Berkshire Consultancy, examines the implications.

The scale and nature of the challenge

More than nine out of ten Deputy Vice Chancellors believe that university closures are possible within the decade and the majority expect to see mergers. Almost a third feel their universities are struggling to cope with a more commercial environment. Changes are clearly required: business as usual is not an option.
There are significant opportunities for universities in responding to this challenge as they possess, in their academics and thought leaders, knowledge and services that businesses and public sector organisations want and need. Respondents see unlocking this potential through commercial partnerships and investment from business as vital for universities’ survival. Research also needs to be exploited commercially with sufficient resources allocated to studies which have potential commercial value. Staff need to be alert to, and seize these opportunities.

In many universities this is not happening. Respondents highlighted both structural and behavioural/attitudinal barriers to succeeding in a more commercial environment. Organisational structure was seen to be a barrier by 40% of Deputy VCs, and over-representation of academics on the governing board was seen as a hurdle by 60%.
Even where structural changes are not required, staff must be engaged in the need for change at all levels for universities to exploit the commercial environment. Changing attitudes and behaviours may in fact be the bigger challenge.
Lack of staff engagement

Organisational change often fails due to lack of staff engagement and buy-in. Over half of Deputy VCs indicated that their university is struggling to engage staff on the issue of commercialisation, half said that academic staff lack understanding of the environment in which they operate (less so in New universities) and two-thirds cited staff’s lack of commercial focus as a key barrier. Without over-generalising, this is perhaps not so surprising given that academics are often more committed to their own specialisms than to the organisation as an entity. We found that 22% of respondents from Russell Group universities, with a more traditional, research-oriented culture, felt their staff actively oppose the move to a more commercial environment (reduced by half amongst other respondents).

Equally worrying in some cases is the resistance to change of management teams –perceived by a third of respondents – and the management team’s lack of commercial know-how, reported by just over a quarter. Half the respondents said their management team was unable to agree on priorities. This is potentially a major issue, as change needs to be led consistently and coherently from the top.

Requirements of Vice Chancellors

Over half the respondents believe that commercial credentials and leadership skills are more important for VCs than they were 10 years ago. Interestingly this falls to 20% in the Russell Group and rises to 80% in New universities.

With New universities most likely to expect a shortfall in funding it is unsurprising that their Vice Chancellors are most often perceived as under pressure to become more commercial and their lack of commercial focus most likely to be seen as a problem. All interviewees from New universities believed income generation to be a key priority for the VC, and a third of their respondents are worried that their VC is not placing enough emphasis on attracting and working with private and public sector partners.

This contrasts with the views of VCs in Russell Group or Red-brick/other institutions who perceived pressure on their VC to become more commercial but were less likely to state that the VC’s lack of commercial focus was a barrier. Whilst it may be the case that the pressures in these universities are different, or genuinely less acute, the active levels of staff resistance to commercialisation perceived by interviewees in the Russell Group suggests that for some of these institutions, the shift required may be proportionately just as large.

Student as customer

The increasing buying power of students as they pay ever-higher fees cannot fail to impact on the attitude universities take towards their students, especially in light of the Browne review. Nine out of ten interviewees agreed that if students have to pay higher fees they should expect a higher quality university experience, and that their university’s core purpose was to meet the needs of students. The move to a student ‘customer service culture’ was expected, by the majority of respondents, to boost student satisfaction, retention and employability, and also to improve links with business by creating a win-win situation for both student and institution.
However, there seem to be significant differences between universities, with New universities believing most strongly in the benefits of the move and over two-thirds having a strategy in place. Much less enthusiasm was reported from Russell Group interviewees with 1 in 3 believing there is no need for such a move at all, and only a fifth having a clear strategy to help implement a “customer service culture”.

Whilst there may be valid concerns about the level of influence that students should have over course design etc, it is certainly true that universities need to understand and strive to meet the needs of the students they wish to attract to avoid losing out to competitors. Universities need to carefully consider and balance the needs of all stakeholders, internal and external to ensure they attract and retain the right students, staff, partners and investors.
Leading the change

From this research and our broader experience working with change in the public sector, we offer the following suggestions as key steps in addressing the current challenges.
– Be clear about your institution’s identity and strategic objectives. What is your unique ‘brand’? What are your strengths, and how can you build on these to attract and retain the right staff and students? What are you not going to do? Develop and communicate a clear vision and strategy that everyone understands and buys into.

– Engage staff. Universities employ clever people, who are often harder to convince of the need for change. Listen to their views and concerns, involve and support them in delivering the university’s goals in a way which is consistent with achieving their own personal and professional ones. Communicate the need for change and provide training and development to equip staff to become more commercially aware.

– Engage other external stakeholders, such as professional bodies and local employers and try to harmonise the needs of all stakeholders, including staff and students, as much as possible.

– Ensure your leadership is ‘joined up’, and that the top team are bought-into, and working towards, the same clear vision and priorities. Make sure you are all role models and communicating a consistent message. Use individual and team development tools as appropriate, including coaching and mentoring, 360-degree feedback and teambuilding.

A significant degree of change will be required in the mindsets of many individuals and in the very structure of a significant proportion of universities if they are to survive.

Sandra Buckley is Principal Consultant at Berkshire Consultancy (www.berkshire.co.uk) – management consultants specialising in people-led performance improvement.

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