Earlier this month, HEPI collaborated with PwC to host a roundtable dinner in London on the importance of creating and implementing robust university strategies.
The event was attended by senior leaders from across the region and was the third in a series of HEPI/PwC roundtables focusing on the key strategic challenges facing higher education institutions in the long term.
It’s no secret: the higher education sector is heading for a period of turbulence. Although demand for full-time, undergraduate places in England is set to grow in the long term (as outlined in HEPI report 105), in the short-term, the situation promises to be far from comfortable. Over the next three years, the demographic headwind is set to blow against the sector, as the number of 18-year-olds in the population continues to shrink. Continued uncertainty over Brexit, international student recruitment and the future funding of tertiary education in England could also impact negatively on total student numbers.
As Ian Koxvold, head of the Education Strategy team at PwC explained in his opening remarks, all this, in itself, should not necessarily spell disaster for the UK’s universities. Even the most pessimistic projections of a 6 to 7 per cent decline in student numbers over the next few years is perfectly navigable for most higher education institutions. The problems become amplified, however, when we consider the rate at which universities have been building capacity over recent years – with sector-wide borrowing already having reached almost £10 billion– and the pressure to fill these new spaces intensifies in a changing competitive environment.
This heightened competition is not just brought about by young people making decisions about where to study in different ways than they used to, but also by the new regulatory environment under the Office for Students (OfS), which looks set to create yet more challenges for higher education institutions in England to navigate. Some of these include an increased pressure on the sector to allow students to switch degrees or higher education ‘providers’ mid-course. There is also the risk that the collection of additional data by the OfS – and subsequent creation of yet more league tables – could lead to more segmentation in the sector and enhance the competitive dynamics. All of this makes the need for universities to have in place strong strategies and effective leadership all the more pressing.
The discussion at our roundtable began by acknowledging universities may not be ‘businesses’ in the traditional sense but, in times of turbulence, it is important that they are run like ones to ensure they can weather the storms ahead. At present, UK universities are finding themselves fighting against three main misconceptions, namely that:
- it is inevitable that some universities will go bankrupt;
- an institution that does not do research is not a university; and
- there are too many people going to university.
All these threats can be overcome by good strategy, which requires competent governance and leadership. An institution which senses it is in trouble can realign itself if it has the discipline to anticipate challenges. The aim of university leadership teams should, therefore, be to create an institutional culture of adaptive change, which routinely identifies and fixes problems before they occur.
In times of political flux as we are experiencing now, the sector needs agility of thinking and speed of adjustment. The most successful universities will be the ones who can adapt quickly. The old style of ‘strong man’ leadership in the sector is no longer fit for purpose and will not lead to the sustained and effective change we need. Instead, we are now looking for university leaders with a ‘can do’ attitude, who can acknowledge and build on the things that have gone well in our institutions, as well as confront and fix the things that have failed.
The best leadership is always done by listening to others, but strong leaders also need to be prepared to have difficult conversations with those within organisations to make them realise where they have been going wrong and to inspire change. This is not easy, but in order to be successful, university leaders need to take the whole institution with them and that means winning the support of all their staff, students and alumni.
Now is the time for good clear management and leaders should not be afraid to control their institutions’ own destinies. This could mean controlling their intellectual property and not giving it away to partners, or focusing on a very few key areas that will make a clear change to positioning. The latter may be easier to do for leaders of newer institutions without the luxury of a 10 or 20-year planning horizon, as opposed to those from more established universities where longer-term plans are more customary. In both cases, however, it is still important to devise a clear vision, to test it and to see it through.
Of course, different universities face different challenges and institutions will have to play to their distinctions and respond to their own market situations, while also working together to defend the sector against a political backdrop that is currently proving unsympathetic to higher education. Universities must nevertheless be careful not to be seen to blame politicians for the current state of affairs. Instead, it is the job of university leaders to focus politicians’ attentions on the issues which are important to the sector and encourage them to get behind important change projects and big ideas. Speaking truth to power is one of the biggest jobs facing university leaders today.
Above all, leaders in the higher education space need to maintain optimism and not fall victim to the prevailing Zeitgeist of cynicism surrounding the role and place of higher education. Universities are – and will continue to be – major engines of teaching and research in our society and this is something that their leaders should proud of, champion and support. In a climate where universities across the country have a duty to deliver the maximum added value possible to students, taxpayers and society as a whole, strategy matters. And, now, more than ever, it matters that we do it well.
For more information on this topic, the new issue of PwC’s HE Matters will be released week commencing 21 May 2018.