A certain degree of change

Commercialisation is not a new concept in the Higher Education (HE) sector. However, in the face of HE budget cuts in the UK of £200m and individual institutions expecting an average funding shortfall of 26 percent, the financial pressures are now more acute than ever before.

New research comprised interviews with 30 Deputy Vice Chancellors (DVCs) and their equivalents from a cross-section of UK universities, broadly grouped as Russell Group, New and Red-brick/other.

More than nine out of ten DVCs believe that university closures are possible within the decade and the majority expect to see mergers. Almost a third feel their universities are struggling to cope with a more commercial environment. Changes are clearly required: business as usual is not an option.

There are significant opportunities for universities in responding to this challenge as they possess, in their academics, knowledge and services that businesses and public sector organisations need. DVCs see unlocking this potential through commercial partnerships and investment from business as vital for universities’ survival. This requires both university and business leaders to recognise the opportunities and potential benefits of such collaboration.

Respondents highlighted both structural and behavioural/attitudinal barriers to succeeding in a more commercial environment. Organisational structure was seen to be a barrier by 40 percent of DVCs, and over-representation of academics on the governing board was seen as a hurdle by 60 percent.

Organisational change often fails due to lack of staff engagement and buy-in. Over half of DVCs indicated that their university is struggling to engage staff on the issue of commercialisation, half said that academic staff lack understanding of the environment in which they operate and two-thirds cited staff’s lack of commercial focus as a key barrier.

Without over-generalising, this is perhaps not so surprising given that academics are often more committed to their own specialisms than to the organisation as an entity. The research found that 22 percent of respondents from Russell Group universities, with a more traditional, research-oriented culture, felt their staff actively oppose the move to a more commercial environment (reduced by half amongst other respondents).

Equally worrying in some cases is the resistance to change of management teams –perceived by a third of respondents – and the management team’s lack of commercial know-how, reported by just over a quarter. Half the respondents said their management team was unable to agree on priorities. This is potentially a major issue, as change needs to be led consistently and coherently from the top.

Over half the respondents believe that commercial credentials and leadership skills are more important for VCs than they were 10 years ago. Interestingly this falls to 20 percent in the Russell Group and rises to 80 percent in new universities.

With new universities most likely to expect a shortfall in funding it is unsurprising that their Vice Chancellors are most often perceived as under pressure to become more commercial and their lack of commercial focus most likely to be seen as a problem. All interviewees from new universities believed income generation to be a key priority for the VC, and a third of their respondents are worried that their VC is not placing enough emphasis on attracting and working with private and public sector partners.

Today, UK universities are under pressure to become self-funding and profitable whilst retaining and building on their reputation as world-class academic institutions. A significant degree of change is required in the mindsets of individuals and in the very structure of universities if they are to survive.