Can universities learn anything from the start-up sector?

This blog was kindly contributed by Vincenzo Raimo, Chief Relationship Officer at Unilodgers and a former Pro-Vice-Chancellor.

Having recently left university employment for the tech start-up Unilodgers, I am having to adapt to very different ways of working and (re)learning lessons which might also be valuable to some of my former university colleagues. As an organisation Unilodgers is trying to learn lessons from the The Founder’s Mentality. The co-author of The Founder’s Mentality, Jimmy Allen, presented to the Unilodgers team last month a series of challenges and lessons from the start-up sector and from more established organisations. These are lessons which I think are equally relevant to universities. In particular, I would like to share his warnings of:

• The ‘westward winds’ of ‘lost voices from the front line’ and ‘the erosion of accountability’; and
• ‘southward winds’ of ‘the complexity doom loop’, ‘the curse of the matrix’, ‘the fragmentation of customer experience’ and the ‘death of the nobler mission’.

My schedule as a Pro Vice-Chancellor was an inflexible one with large chunks of my diary filled 12 months in advance. Operating tools were slow and clunky and meetings with fellow staff and students rarely strayed from formal settings and routine patterns. Despite the continued marketisation of UK higher education and talk of being more ‘customer centric’ and flexible, many universities have continued to operate within their own perceived protected and privileged positions. Some have grown large corporate-type infrastructures at the expense of the front line (students and lecturers) and their core teaching, learning and research facing activities. One only needs to compare the number of well remunerated, permanent senior academic administrator positions advertised on jobs.ac.uk each week with the number of precarious, short-term junior ‘coal face’ roles to tell you how some universities have lost sight of what their missions are and what brings them revenue and success.

Being lean and customer centric are key in the start-up sector. There is neither the resource nor the time for corporate structures and layers of decision-making present in many of today’s universities. I appreciate that universities are complicated organisations with multiple ‘business units’, ‘customers’ and ‘stakeholders’ which need servicing. Yet this is also the very reason why the layers which have developed between the front line and university executives – Deans, Pro-Vice-Chancellors and Vice-Chancellors – should be minimised. This would help university decision makers be better connected to today’s front line rather than relying on reports working their way through the committee cycle or on memories of a front line which has changed since they began climbing the management hierarchy. Without that front line connection and closeness to staff and students it is difficult to fully understand how your organisation really operates, what is important to the front line and what brings success.

My new CEO recently reminded his executive team colleagues that each one of us is a business cost and that we build our business on the people in our organisation who generate the revenues, all of whom are all on the front line. Unless we are obsessed with the front line and truly understand our customers, i.e. students, like our Student Hub operations centre colleagues do, we will never achieve the goals we have set ourselves. Everyone who joins Unilodgers is required to spend time on the front line, taking calls from students, understanding both their journeys and how we can achieve our goal of making it easy for students to find and book accommodation for university.

The equivalent in universities might be the Vice-Chancellor who regularly teaches, like Sir David Greenaway did when he taught first-year economics while he was Vice-Chancellor at The University of Nottingham. Perhaps it is the Registrar / Chief Operating Officer (COO) who spends time dealing with front line student enquiries from time to time. It might be the PVC responsible for student recruitment and marketing who does not just attend but works on education exhibitions and at open days, who talks to prospective students, their parents and other visitors to better understand their changing needs.

The growth of internal hierarchies and leadership positions in universities has naturally been accompanied by larger corporate structures and a diversion of revenue from front line academic units to large central bureaucracies. These eat an increasing share of the teaching and research revenues. I am certainly not going to argue that university administration and its administrators are not needed. These staff are, in my experience, hardworking and as committed to their university’s core mission as anyone. Many of them are dealing with external requirements imposed on universities such as REF and TEF. In any case it would be impossible to run universities without their estates, finance and other essential professional and operational staff.

But how often do university central services fully evaluate what they do and ask what they can stop doing rather than on how they can keep growing? Universities cannot keep claiming to lack resource for teaching, front line student services and research unless they better challenge their spend. In doing so they might unlock unproductive resource for redeployment. I know from experience that this is hard, especially when universities have longer-term commitments than other more short-term single transaction type organisations. But unless they properly challenge locked budgets through, for example, zero-based budget exercises, they will not be able to free resource and shift its allocation away from the growing corporate units and to the revenue earners. Zero-basing budgets is described in Zook and Allen’s The Founder’s Mentality as:

Regularly examining every key activity and process with a fresh eye, and asking these questions: If we could start over, would we still invest here? Is this still the best use of resources, or is it an artefact of history and past budgets? Are our core customers willing to pay for this cost or that process?

These are easy questions to pose but really asking them and then taking action is much harder. If these questions remain unapproached, universities are doomed to atrophy.

In summary, there are some basic steps which all organisations, no matter how large and broad in mission, including universities, can learn from the start-up sector including:

• Focus: This sometimes means making difficult decisions. Investment in the core and in future game-changers may have to be at the expense of underperforming or no longer relevant areas. A piecemeal approach to investment in, for example IT capabilities, will mean you are always behind the curve. Unless you are able to free up locked resource it is hard to invest more in the revenue-generating front line and your institution’s future.
• Think long-term. Understandably in periods of policy uncertainty UK universities have tended to focus on short term objectives. This is not helped by the short-term nature of senior positions and what seems increasingly like a merry-go-round for vice-chancellors and aspiring vice-chancellors. But remember that no university was successfully built on a 1-year planning horizon or even for that matter a single 5-year strategy.
• Agility and quicker decision making are vital. Universities are full of very clever people bogged down in committees passing and receiving instruction. Zook and Allen identify ‘debates in committees where no person has the right to decide (“to have the D”)’ as one of the ‘hidden killers of speed in organisations’ and ‘excessive organizational layers’ and ‘large corporate staffs endlessly initiating new activities to better inform themselves’, all characteristics prevalent in many of our universities today.

I want our universities to remain internationally competitive, serving their current, future and past students and the communities in which they live and work. To do this they cannot stand still. Some will need to undo changes made in recent years in order to refocus on their core and to build sustainable future success. But they will need to fight those westward and southward winds, both blowing at gale force within many of our universities today.