Surviving the Perfect Storm

                                             

Image ©: Aeroklub Praha Letňany

I have been thinking a lot about the state and future of higher education in the UK. This is mainly due to the fact that my current livelihood is tied to the industry. It is said that change is inevitable; hence, we can either go with the flow or get swept away by it. But change brings both anxieties and opportunities in its wake. Most people or organisations detest change because it usually means the demise of the current comfortable status quo.

The UK Higher Education (HE) sector is going through a massive upheaval. The environment is changing and everyone in the sector is trying to make sense of the disruption. Universities will never be the same again; the good old days are officially over. The UK HE market is heading the direction of the competitively high priced American system which requires parents to start university trust funds for their kids from birth. I really need to start saving up for my boy’s university tuition fees now while he is still a toddler.

The turbulent sector change is a consequence of the 2008 financial crisis which has hit the UK economy hard. The resultant recession has forced the UK government to take austerity actions and cut funding for all the key public sectors in order to stay solvent.

Charles Darwin postulated the ‘survival of the fittest’ theory. He said that it is not the strongest species that survive change but the most adaptable that survives and thrives. The change in the UK HE sector is the extinction type of change that Darwin talked about in his ‘Origin of Species’ treatise. It is a certainty that not all UK universities will, in the long term, survive the disruptive tsunami that is about to be unleashed when the increased school fees kick in from September 2012.

The marketisation of HE will mean the reinvention of the UK University. Vice Chancellors {VCs} and their administrators are busy planning how to change the direction and culture of their institutions in preparation for a new climate they have never experienced before. Most universities are going to do the same thing in response to the sector’s challenges. They are all working from the same hymn sheet and because most will be doing the same things, they will cancel themselves out.  But it is those few VCs and universities that see and do things differently to capitalise on the opportunities that will reap the greatest rewards. The inability of VCs to reinvent their university’s current business systems or models to respond to the disruptive changes in the educational landscape will spell the end of their institutions in the long term.

I reckon some UK universities will bring in expensive management consultants to advise and provide solutions to address the challenges confronting them. It is funny how consultants get paid a lot to tell the obvious which most people in the organisation already know. So it was interesting to discover while working on this blog post that the consultancy giant, Deloitte, recently released a report called ‘Making the Grade 2011’ on the key issues facing universities in certain western countries.

This report’s findings support my views about the state and future of the UK’s higher education institutions. It states that HE institutions need to radically transform the way they do business because they can no longer maintain the status quo.  They are encouraged by Deloitte to aggressively seek out and execute best practices from around the world, even practices outside academia. The report viewed universities and their administrators as creatures of habit who stick to established practices rather than paving new ground which is needed in this new climate.  The report argues that universities need to look for ways to enhance their core competencies (strengths) and outsource the rest of their activities.

There are two key quotes in the report from Deloitte’s principal higher education consultants worth noting:

 “Higher education institutions are in the midst of a perfect storm. Government funding is declining, market conditions have reduced the value of endowments, private backing is on the wane and costs are going up. Yet, these combined challenges create a unique opportunity for transformation. Educational institutions willing to think laterally can position themselves to outperform into the future.” Louise Upton, Deloitte Canada.

“To succeed into the future, higher education institutions must take a good, hard look at their organizing principles…….Ultimately; the victors will be those who can support their decision-making with the strongest business case.” Christina Dorfhuber, Deloitte United States.

 

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3 Comments

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3 Responses to Surviving the Perfect Storm

  1. goke

    Good write up. Like you said, consultants do not say anything that is not obvious. Those quotes look like they took them out of a current management book. It is going to be really bad for the UK parents cos i am not sure they will be able to adapt quickly enough.

  2. Andrew

    I think change is positive and necessary. Since the financial crisis it has hit home to many graduate students that having a degree is no longer a sure way to get a job. This shake up will hopefully encourage the HE and students alike to develop an educational strategy that will give more practical tuition that employers now go for.

  3. Ogechi

    Prof, I see you are very concerned about this matter. Indeed, issues like this are painfully uncomfortable. The fact is, we need the HE sectors to survive because we need HE. I choose to see the cup as half full by saying that something will give. Yes, this situation is very real, but I was just thinking that maybe we’re panicking a bit prematurely. Surely 2012 is not the end of the world…or is it? We have to be the ‘fittest’ that Darwin speaks about. We have to choose to survive this change too. Education is a privilege I don’t intend to walk away from.
    Let’s gear up for this storm, knowing that this too shall pass.
    Ps: I hope UK is not spending time trying to design an American system. It’s certainly not for everyone.

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