Out-of-date business model will erode Oxford

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My experiences of the early bumpy ride at Oxford’s Said Business School, the birth of which in the 1990s was surrounded by disputes, made me think, as a don and former strategy consultant, that the university’s governance reforms were likely to be sensible changes – but after looking into them I suspect they are likely to do more harm than good.

The reforms are not a case of surrendering control to outsiders – that is something of a red herring since the composition of a supervisory board can clearly be settled on the basis of experience and merit. Rather it is a case of surrendering control to a secretive internal administrative clique that advocates an inappropriate and out-of-date management model that is subject to growing criticism in the US. It is breathtakingly naive to think that a distant supervisory board and a superannuated version of a dons’ parliament would constrain the actions of a determined, hard-nosed senior management team. But why is the model inappropriate and out of date?

The model that appeals to politicians and outsiders is one where students are customers, dons are costs that deliver educational products and the shareholders are external parties such as the government. In this model the chief executive officer and his team take decisions to ensure that the customers are happy with products they receive at a cost sufficiently low to generate returns that keep external parties happy. The supposed benefits are that responsibility is centred on the CEO, the senior team is controlled by rewards and decisions can be made quickly and unambiguously. The fundamental problem is that this is the wrong model of governance for a university. You could just as well argue, for instance, that the dons are customers, students are costs and benefactors are the owners. The model is not appropriate because the university is not a job-training centre, nor an applied research lab working for the government. The university is much more like a federation of interlocking intellectual partnerships of skilled professionals.

Worse still, the particular business variant underlying the new governance proposals is well past its sell-by date. The engineers’ paradigm behind the centralised proposals applies the ideas of Henry Ford and Frederick Taylor to learning as though the university were a machine bureaucracy where dons are substitutable employees in an integrated academic factory. It is ironic that today’s cutting-edge businesses are moving in the opposite direction. The importance of knowledge workers in creating defensible value-added is taking businesses away from large, centrally administered monoliths towards small, self-organising entrepreneurial cells, flexibly connected and practically self-determining – just look at the campus models of companies such as 3M, Google and Apple.

Putting recent big project fiascos aside, senior management team dominance would erode the three distinctive competences of the university that have made it a world leader. First, undergraduate tutorial teaching would suffer as greater emphasis was placed on research. Second, the university’s pre-eminent position in humanities would be undermined by financial policy as the university expanded science in order to get more money from the government. Third, the university’s role in shaping the values and principles of the next generation of British and European leaders would be overshadowed by the increasing preponderance of technical graduates and overseas students. But if these consequences are so obvious, why is the senior management team doing this?

Some say the team is implementing the Higher Education Funding Council for England’s agenda in Oxford. Supposedly if Oxford does not do this, it will get clobbered with a big stick. But is this the case? Is the funding council really worried that the university is not doing a good job when it ranks in the top 10 on a third of the money of its main competitors?

In fact, Hefce does not require the one-size-fits-all polytechnic template to be applied to Oxford. Nor does it have a clear, long-term plan for the development of national academic advantage on a subject-by-subject, institution-by-institution basis. Current policies are an amalgam of initiatives, pragmatic thinking and historic baggage. So where does this leave us?

First, we need a federated structure that shares executive power responsibly between centres of competence and influence. If the university cannot come up with a suitable design, it should commission international analysis by one of the strategy houses. Second, the vice-chancellor’s team should be reoriented to promote and defend the university’s interests rather than acting as the agent of supposed irresistible outside influences.

The writer is tutorial fellow in management and finance bursar at Exeter College

David Womersley: The case for Oxford’s reforms

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