Re-inventing the business of universities

The pressures for change in universities’ traditional ways of working have been growing for some years. The recession, substantial public funding cuts for higher education and tuition-fee reforms will bring these pressures to a head, and will force every university to rethink its business.

Decades of steadily rising grant income, central direction and regulation have embedded a funding-led culture into the DNA of university operations, and many universities are actually run as if they were public-sector bodies. They need to refocus their working methods and cultures for a different world. Universities must move on from the legacy of funding-led, cost-driven business models and develop alternative strategies built on their distinctive capabilities and the value they can generate.

The new economics of higher education requires universities to be more innovative in shaping their services to the needs of different customer groups and much more flexible in matching their resources to the prices that the competitive market will pay. This involves the alignment of distinctive assets and coherent operating structures around the needs of selected client groups.

PA Consulting Group's latest discussion paper ‘Universities through the Looking Glass: reinventing the business of higher education’ offers an alternative to the funding-dependent business models that have characterised the HE sector over many years and suggests ways in which universities can develop new and self-sustaining capability-led models built on their distinctive missions, assets and capabilities. 

Our paper explores:

• how universities can best respond to different and more competitive market opportunities

• ways in which universities can develop new and self-sustaining capability-led business models built on their distinctive missions, assets and competencies

• the kinds of alternative business opportunities that a capability-led approach can make possible

• how universities can redesign their internal operations and ways of working to match the demands of a competitive market for higher-level learning (both publicly and privately funded).

Overall, our paper suggests that universities must create a culture of shared purpose and self-sufficiency, aligned to the institution’s particular mission and goals. Universities need to look at their operating structures - organisation models, management systems and performance incentives – through which the university’s distinctive assets are harnessed to realise new opportunities.

This paper will be of interest to everyone involved with the leadership and development of UK universities in coming years, and also to those responsible for shaping policy towards the sector.

To request a copy of the paper, or to speak to an expert to understand how your university can realise its potential, please contact us now.

The "Red Queen" image, reproduced by kind permission of Macmillan Children's Books, is taken from "Through the Looking Glass and what Alice found there" by Lewis Carroll. © 1872 Macmillan and Co.