How (not) to run a University

A classic joke: passengers travelling with a hot air balloon are lost in thick fog and when they finally spot a lonely man walking across a mountain path, they lower their balloon and shout ‘dear sir, please tell us where we are’. The answer follows swiftly: ‘you are in a basket underneath a hot air balloon’. ‘Thank you, sir!’ one of the passengers answers, reassuring the others: ‘Great, we are next to the local university’. How could he know that? ‘The man over there gave us an entirely correct yet equally meaningless reply, so he must be a university president and he is travelling by foot so we must be close’.

There is quite a catalogue of jokes about university presidents. To the outside world it is difficult to understand what university leadership is really about. So how should you run a university? Or maybe, how should you not do it?

As always when things are complex let us make them simple. I would like to identify the three basic forms:

  • a self-governing community
  • a ‘public good’ organisation
  • charitable, not-for-profit, or even for-profit business

The self-governing community is for many academics the holy grail. Academic autonomy does not come ‘purer’ than that, many would argue. In terms of leadership, at best it illustrates Burton Lee’s passionate plea for Structured Chaos, the essential condition to allow for true innovation to emerge. As a university president once explained the policy behind the success of his institution’s research performance: ‘There isn’t one. We just try to get and retain the best researchers we can find and then just let things happen’. Do not expect in a situation like this for the president to be conducting the orchestra. Self-governance typically produces a cacophony of opinions and endless internal politics, but somehow that chaos remains functional and beautiful results can emerge. As I have jokingly said, this is one of those rare examples which shows anarchy can work with strategic decisions that resembles the classic swarm of starlings: somehow, they manage to find the right place to nourish and to roost. Of course, it also tends to be costly, highly inefficient, no clear accountability of how resources are being used and scandal prone. Self-governance can work – and in a few institutions still more or less does works – as long as there are significant funds or endowments to support it. In other circumstances the risks are high which is probably one of the reasons why there are few examples in the world of such community self-governance or ‘academic anarchy’: the chance that the institution will fail financially is quite high.

A University finance director warned me once: ‘whatever you do, don’t put the lunatics in charge of the asylum’. Most academics are admittedly not naturally gifted managers. More often less focused on controls, procedures, and regulations, they naturally prefer to liberate the forces of innovation inside the organisation. But of course, such is not the reality, especially not in public universities or in fact nowadays in almost any University that operates in the often highly regulated higher education systems, with their extensive auditing and accountabilities.

When I started my life as a university staff member, I was a civil servant because like most European universities it was a public institution and hence considered to be part of the Ministry of Education. The controls of the Ministry over ‘their’ universities, ‘their’ employees, ‘their’ buildings can in some cases be quite extreme. I recall visiting European universities to note that the Ministry would directly approve travel requests, expenses, even holiday allowances. It sounds incredible but once that was the reality of many state universities where all employees were civil servants. They could not be fired, except for in extreme cases like serious criminal conviction and as a consequence a significant number of university civil servants were in conflict with their institution and would just stay at home and receive full pay until retirement. Some would be upgraded to ‘advisors’, others would just become invisible. In my case, as I did not enjoy the restraints of civil service life, I decided to escape, moving from the Netherlands to the UK.

State control and university independence do not easily sit together. Public funding and academic autonomy might not be a contradiction in terms, but it requires a lot of safeguards to make it work and can easily fail. But the issue is not public funding, the issue is that for academe to flourish, it needs considerable levels of freedom.

Of course, the difference between public and private is far from black or white. Many private universities heavily depend on public funding, with the usual strings attached, and some public sector universities in a different definition would be reclassified as private. Moreover, though the high-level conclusion can be that state control is an odd set-up for higher education and research, it does not mean there should not be public funding for universities or state funded higher education. In fact, the interaction between academe and public sector is highly valuable. The importance of retaining trust between the two is an important factor in the development of a society, the functioning of the triple helix, the importance to get funding for vulnerable (not commercially viable) subject areas and for blue sky research, the imperative of ‘consumer protection’ and maybe above all the greater good of supplementing market forces. Especially in Europe we are – rightly in my opinion – sceptical of the idea that all is well as long as the free-market forces follow the direction of the invisible hand. But over time Europeans have become equally sceptical about state controls and the heavy hand of state planning.

The form of university management that has rapidly gained popularity across the world is that of some version of corporate style management. It does not make much difference whether an institution is largely public funded, a charity, not-for-profit or for-profit, ultimately the university’s books need to be balanced, revenue enhanced with commercial acumen, inefficiencies removed to ensure that the relatively scarce resources are fully dedicated to the institution’s mission etc. Public funding might be available but, in this set-up, government is treated like a big yet demanding client who sets priorities and insists on value for money. Also, students in this model resemble consumers, often quite discerning and selective, increasingly with price sensitive behaviour and treating their tuition fees and study time as an investment in their future career.

With university trustees ultimately controlling the selection of the university top management, and with many of them with corporate backgrounds, bewildered about the classic university leadership’s inability to manage ‘properly’, there is governance pressure to move to a more corporate style of management. At times it even means hiring former industry leaders to ‘sort out’ the place. Yet in truth that rarely works. Effective university leadership requires much more than corporate management skills.

Some decades ago, I had the pleasure of arranging an honorary doctorate for my compatriot Arie de Geus, author of, for instance, The Living Company (De Geus, Arie, The Living Company: Growth, Learning and Longevity in Business, 1997). He asked me how old the university was I was then associated with. I answered apologetic that it was a relatively young institution, founded in 1838. At that stage he reminded me of the sobering statistics about the typical life expectancy of companies. ‘Yet’, he said, ‘everybody seems to think universities should be managed like companies, but in fact just looking at life expectancy alone on the contrary universities probably should be considered a model for corporations.’ It was a provocative statement and it baffled me at the time but over the years I have understood its wisdom. One of the famous quotes of De Geus is: “Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans.” Which brings us back to where we started.

When looking at the various ‘basic’ models they show us simultaneously how to run and yet how not to run a university. I appreciate such a conclusion sounds remarkably like the statement of the lonely university president walking a mountain road when a hot air balloon emerges out of the fog. But the answer is not about which model is more superior, it is about how to get the mix right. Liberty and autonomy are the oxygen of academic performance and should be treasured yet at the same time it comes with serious risks that need to be mitigated. An institution cannot afford waste, its financial health needs to be robust if it is to survive over a long period. That is a balancing act, and for each institution that mix will be rather different given their circumstances. And above all that there is the reality that taxpayer’s money always will have to come with strict accountability. Those who accept public money will also have to accept the attached strings, albeit still finding a way to safeguard that essential autonomy, the same way regulators have the duty to avoid suffocating the universities’ ability to innovate, meaning allowing and even expecting universities to get it wrong now and then, as that is an essential part of the innovation process. Getting that blend right between the basic ways of how (not) to run a university is indeed sometimes a messy business. But the rewards of getting it right are truly satisfying.

Professor Dr Maurits van Rooijen

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