Consultants using their powers for good in a corporatized post-secondary future

In a previous blog post, I was interested in how community colleges compete for resources in a crowded market like the Greater Toronto Area.  Colleges were originally designed to deliver and administer educational programs in response to the needs of the economy and to the government that funds them.  Now they’re under pressure to enroll far more students with less per capita funding, and to replace programs and facilities more rapidly to keep up with the pace of innovation in industry.  This puts demands on them that they aren’t equipped to meet.  I suggested their competitive success will increasingly depend on corporate rather than educational performance.

My colleague, Genevieve Tran, offered a sensible caution about corporatizing crown agencies like these.  She warned that educational outcomes can suffer when a post-secondary institution puts too great a priority on corporate measures of success.  High institutional rankings do not always translate into better learning environments and can in fact degrade them.  A school’s reputation can be elevated for all the wrong reasons when the lines of competition are drawn incorrectly and the educational priorities slip.

It’s possible for both observations to be valid.  So how should a college or university seek to acquire new business competencies without detracting from its educational mission?  Our experience leads me to suggest these two principles:

  1. Every strategic initiative must have a positive educational outcome as its ultimate rationale.
  2. Structures and systems should be adapted to ensure that corporate talent remains subordinate to, and works in service of, the organization’s educational mission and leaders. 

I realize how obvious, ridiculous, and even offensive these simplistic prescriptions might seem.  No one in postsecondary education would disagree.  Just about everyone would insist that their institution already follows them.  Without further insulting some of my favourite people, let me explain.

On the first point, we don’t know in some cases whether or not a positive educational outcome will result from a major facility expansion, creation of a satellite campus or a research institute, funding of an academic chair, or recruitment of a high profile and high-priced intellectual stud-muffin to occupy it.  The future can’t be known.  Fallible human beings, using the best evidence available to them, must make gambles that can take years to prove out.  Unintended consequences are inescapable, whether or not we wish to acknowledge them.

Every decision that might elevate the status of an institution, in terms of scale or prestige, is also a decision not to do something else with all that time, talent, and money.  There may be other more effective ways of enhancing the experience and accomplishment of students, without raising the institution’s status to the same degree.  Strategic initiatives can divert managerial energy and attention away from program quality, which affects students most of all.

I’m simply saying that explicit reference to educational benefits will safeguard against unintentional missteps in a postsecondary institution’s corporate strategies.  It’s a matter of asking “why” an initiative should be taken, and continuing asking why until the answer is, “because it’s good for the education of our students.”

Remember, I’m not saying that this isn’t already standard practice in the governance and management of colleges and universities.  I’m saying that the practice has to become more formalized and disciplined as institutions beef up their corporate capabilities.  There are many ways to do this, and every institution can develop their own “student benefit quotient” as step in their project planning.  In my view it’s a sensible counterbalance to the rising pressure on colleges and universities to perform better as corporations.

How else, for example, might a school decide to decline sponsorship of research by a pharmaceutical company?  On what grounds could it ever forego a bequeathal of art or real estate?  What about a developer who dangles money for infrastructure improvements in return for building rights on campus properties?  How about an option to construct a satellite campus tied to tens of millions of dollars from government?  All institutions are predisposed to pursue such opportunities, but at the end of the day, what’s the most critical question to ask before making a commitment?  My answer, after the finance, marketing, and fund-raising departments have weighed in, is to ask how it impacts students.

These decisions are often taken on the assumption that bigger is better, and that growth is in and of itself a valid objective.  From a strategic or corporate perspective this might seem true when, from an educational perspective, it is not.  Who doesn’t know of an institution that has accepted a gift it shouldn’t have, or has overextended itself in an expansion program, or has overpaid for a celebrity academic, or has regretted accepting research money from a dubious source?  Mistakes are inevitable, but by applying the test of projected educational outcomes to every strategic initiative, schools might at least err in ways that benefit students more often.

Just to conclude on this point, there are complex rationales and priorities at work behind a whole range of strategic initiatives relating to such things as celebrity academics, signature architecture, real estate acquisitions, corporately funded research programs and facilities.  There is nothing untoward happening when an institution embarks on a questionable initiative.  There is a natural tension between corporate and educational priorities, and innocent mistakes occur when one dominates the other.  Quantitative educational improvements need to be tied to corporate objectives before commitments are made to ambitious strategic initiatives.

The second principle concerns the preservation of an organizational culture that respects the trust between student and teacher, and between the institution and its community(ies).  All postsecondary relationships are in service of this trust because it is between teachers and students that learning occurs, and it’s between communities and institutions that mandates are given and fulfilled.  Aren’t they?

I’m sure administrators’ eyes are rolling at the naiveté of my premise, but this doesn’t change the next obvious question:  How can you enhance corporate skills and capacity without radically altering the culture of an institution?  How can you avoid the natural tendency to shift focus onto the wrong measures of success?

The easy answer is to secure the necessary talent and capacity from outside and to keep it at arm’s length.  The hard truth is that these external relationships can be very demanding.  It’s difficult enough to find talent, develop a working relationship, and manage the performance of people in your own office.  Management of professional service firms and expert consultants can be even more difficult.

Management of external relationships is only part of the challenge.  Another is the sourcing and matching of external talents to a broad range of changing internal needs.  On any given day, a large institution might have dozens of outside experts working for it.  They may never meet each other, each having been engaged by different individuals or departments, but in some cases, they may be working on the same or related projects.

Construction of a new facility, for example, may entail some or all of the following external relationships:  A dean might engage a consultant to analyze future demand for new course offerings.  The new programs might require additional teaching space, necessitating engagement of an architectural or planning group.  Later a development consultant might be hired to conduct a fund-raising feasibility plan.  Then the project might require a lobbyist to mediate between private sector developers and the government.  At the next stage, there will be environmental engineers conducting site testing, quantity surveyors to estimate total cost, and perhaps a communications or PR firm to look after public response to the project.

Now ask yourself who all these consultants are reporting to, and the answer might be a half dozen or more staff in a number of different department – none of whom have leadership of this project in their job descriptions.  When you consider the cost in terms of consulting fees added to the cost of staff time spent managing these consultants, it’s easy to understand why the externalization of these functions must be done carefully.

Another approach is to create special purpose bodies that are dedicated to the implementation of strategic plans, but which operate under the control of the institution.  A good example is the York University Development Corporation (YUDC), which is a wholly owned subsidiary comprised of in-house real estate development professionals and external consultants.  It takes responsibility for master planning and execution of the University’s plans instead of expecting this of academic or administrative staff.

The arm’s length subsidiary reports to the executive level of the university rather than being led by a peer executive within the administration itself.  Although external agencies like this are harder to manage than internal departments, this structure puts some practical limits on the influence the YUDC group has on the culture and focus of the University’s administration.  For York at least, this seems to be an effective means of balancing academic priorities with corporate proficiency.

Another approach is to consolidate multiple consulting relationships, covering an array of specialized services, into a single relationship.  In the same way that a general contractor oversees construction trades on behalf of a developer, one trusted service provider can be commissioned to assemble and manage other specialists.  This relationship can serve a range of other requirements relating to organizational development, such as strategic planning, as well.  Taking direction from and reporting to the President’s office, this consulting relationship would provide all the benefits that private sector companies get from a Corporate Development Officer (CDO).  In addition, the institution would benefit from a Swiss Army knife of skills available through associates of the virtual CDO.  Although there are substantial costs entailed by this arrangement, there are savings too.  It provides a means of securing precisely what is needed, when it is needed, rather than carrying the cost of permanent in-house expertise that goes stale over time.

In our experience, the structure of the external relationship is as critical as the quality of talent being engaged.  The CDO model has its own challenges because, for all its benefits, it demands a great deal of trust from the client organization.  The externalization of corporate functions through the creation of subsidiaries, as in the York example, doesn’t demand as much trust, but is more limited in the scope of service.  But both appear to be a step in the right direction.

For anyone who still doubts that this is a serious concern, I offer a few examples:

Recently I was talking to a Dean at a large college who was working for months to establish a new business incubator.  When asked why progress was so slow, she simply waved her hands in the air and said, “Everything’s, you know, all ‘Eeeeeeeeeeeeh!”  I understood that she felt overwhelmed, but it’s a perfect illustration of how a project can become bottlenecked when left to the leadership of someone who is already overextended.

I was once asked to review plans for a new nursing school at an American college.  In this case, the project rationale was sound and the case for capital support could have been compelling.  After a day of meetings with faculty, administrators, and board members, each revealing to me what they hadn’t to each other, it was clear that they couldn’t articulate a coherent argument for funding.  Despite an abundance of skills, commitment, and resources, they simply couldn’t unify their perspectives in a way that would be intelligible to external donor prospects.  They needed outside help to get the project unstuck.

In another case I was working on preparations for a capital campaign and discovered that the objectives being communicated by the campaign had been developed in oblivion to plans being developed elsewhere in the organization.  When alerted to the problem and advised of the need for alignment, a senior executive remarked, “That’s what happens when you’re trying to do many things at once.”

Which brings me back to the start of this discussion.  When ISN’T a postsecondary institution trying to do many things at once?  Rising demand on inadequate resources has become the new normal.

Internal development of corporate capacity and talent can result in diversion of institutional focus from its educational mission.  Externalizing corporate services requires the adoption of structures that enable administrators and executives to manage consulting relationships more effectively.  Of these options, the creation of a virtual CDO, reporting to the President and taking direction from the Board, is the most beneficial.  Creation of subsidiary corporations under ownership and oversight of the institution can be a useful compromise.  What isn’t working is the prevailing method of engaging many individual consultants in discrete relationships all around the perimeter of the organization.

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