"The Governor View" - Change programmes

Many institutions across the UK have embarked on, or are devising, significant change programmes, many prompted by the financial crisis across the sector, according to governors who spoke to Advance HE. 

These strategic initiatives aim to alter aspects of key operations, such as portfolio offering, academic structures, administrative processes or technology. The goal is to adapt to evolving needs, improve the student experience, and/or respond to external market demands.

Governing bodies have a key role to play in asking the right questions, highlighting risks, gaining assurances and posing the right level of challenge to ensure that the impact of change programmes is widely positive.

At one new university in the north of England, a size and shape strategy prompted a restructure of faculties with the aim of trying to ensure that “fresh and relevant” programmes would deliver the teaching, learning and employment outcomes that potential students, and their parents, want. 

In a bid to “keep the offer really attractive”, the university went from four faculties to three and disciplines were regrouped to allow more coherent packages and cross-over programmes to be marketed.

“It made a lot of sense and was something we supported as governors,” said the Chair of the Board. “It is part of a general move to focus our attention as a Board towards marketing and recruitment, both UK and international, and diversifying income. Of course we thought about those things already, but going forward we have started to concentrate on what other income sources there are and growing it.”

The  governing body was kept abreast of the executive’s plans to engage with academics and stakeholders about the changes and were cognisant of the importance of managing the "people side" of change through effective communication and stakeholder engagement.

“The detail of the plan and negotiation with academics were operational matters but we wanted to know about staff reaction and morale,” said the chair. “We wanted to know that the risks – such as negative publicity or that staff would be unhappy - were being managed and I think we were kept really informed.”

The issue for governors was that the change was being managed effectively, that the executive was alert to potential risks and had a plan to deal with them and that the board was “kept in the loop”. 

Next on the list at this institution is exploring what students want from digital transformation and how AI might be harnessed in professional services.  As part of this, governors at the university will receive training because “we don’t know enough about it.”

For this board member, the university’s focus is on new markets and efficiencies rather than new business models.

According to Professor Sir Chris Husbands, former Vice-Chancellor of Sheffield Hallam University, this is a pattern seen across the sector. 

In a HEPI blog, he points out that although portfolio reviews and other change programmes are widespread, there have been fewer developments in reshaping business models for teaching and research.

The professor is  [DT1] working with university leaders on sustainable solutions, warns that institutions struggle with making strategic, longer-term plans and that while “a lot is happening” in individual change plans, it is “probably not enough”. 

However, the extent to which institutions are able to significantly transform their business models was questioned by one governing body member, who points out that although HE is a market, it is one that is subject to myriad external controls.

“Delivering teaching and doing research is part of the core mission and within that, you can’t flex your home student fees up and if you stop doing so much research, for instance, it has a possible impact on finance and reputation,” she said. “There are so many external constraints on the business model.”

She cites the government's proposal to remove Level 7 apprenticeships from its new growth and skills levy in England.

“If you’ve put too much energy into degree apprenticeships, for instance, and the government changes the finance, then what? If you put all your eggs in one basket and narrow your focus, you are at risk. Similarly, expecting international students to save the day when they’re subject to visa and immigration policy is a risk. I think the smart thing to do is to ensure you are delivering on the core mission and keep a certain level of breadth to protect yourself.”

At her university, a review of portfolios has concentrated on retention and graduate outcomes.

It is less a radical change and more a longer-term programme that builds on work already in place to meet the demands of the OfS B3 conditions of registration. Financial pressures have speeded up the process and led to redundancies, largely through managed voluntary schemes. 

“We are looking at what areas should be in focus and what should be moved away from,” said the governor. “There are reviews of the way that courses are delivered in terms of modules: how many should they be and should there be more combined modules, for instance.”

The governing body’s role has been to “interrogate that plan and understand the potential impact and unintended consequences”.

“The main areas were impact on staff relations and how we monitor how that plays out, impact on students experience and how we monitor that and impact on student retention and graduate outcomes,” said the governor. “We wanted to be assured that the action that we take now does not undo the good work that has gone on in the last few years in focusing on B3 conditions.”

Beyond that the governing body was keen to ensure that any action taken did not lead to “regulatory trouble” and to monitor any impact on recruitment of students both UK and internationally and what that might means for the institution’s student profile and income.

While current financial pressures are prompting, driving or speeding up change programmes across the sector, a lack of funds can also limit change.

As the most recent report from the Association of University Directors of Estates (AUDE) shows, many institutions have been forced to put building projects on the back burner, for instance.

“What are we going do about estates transformation?” said a governor. “Some of that work has been paused or slowed down. We can’t do everything at the moment.”

Professor Husbands argues in his blog that the ingrained habit of individual autonomy, even in non-competitive services, is a major barrier to significant change. He suggests that leaders should make strategic choices to build different relationships with other institutions. 

His view is echoed in a recent Universities UK blog by Sir Nigel Carrington, chair of its transformation and efficiency taskforce and former vice-chancellor of University of the Arts London. 

Sir Nigel points to successful geographical partnerships between universities, and other partners on areas like student mental health and wellbeing, and some courses such as modern foreign languages which may be struggling to recruit. 

Governing bodies are keen to explore collaboration opportunities, and some governors are members of organisations that could help to facilitate it, for instance groupings of university chairs who meet regularly.

However, there is a degree of scepticism about the potential efficacy of collaborations, particularly where funding to invest in them is limited.

“We are very keen on getting the feedback from the UUK task force and collaboration is definitely what everyone is thinking about, but I think we are a bit more sceptical about whether it would actually deliver,” said one Chair. “Those of us who have experience of local authorities know that the outcomes can be very mixed. I know a number of local authorities who went into joint services and then withdrew from them. It just didn’t work. So, it will be interesting to see what the task force comes up with.”

A governor at a university in the south of England points to the ingrained system of competition in HE, with higher education instituions operating as businesses in a marketplace and “constantly inventing their own ways of doing things”.

“There should be more collaboration and there could be more standardisation, which might help cut costs, but everyone is doing their own thing,” he said. “There are joint purchasing groups but below that not much happens. One of the barriers is that I doubt anyone would want another institution to see their balance sheet. Another is that parts of the system have a tendency to look down on the other parts.”

At his university, a rigorous change programme was put in place some years ago when the university was facing “several years of deficit”.

“It was a difficult change programme that hurt,” he said. “There were across the board ‘efficiencies’ and quite a lot of focus on administration and duplication, with reorganisation and voluntary redundancies.”

Given the worsening financial conditions generally and the attendant threat to sustainability, the governor is thankful that the executive “saw the writing on the wall and did it early”.

He added: “It has been very hard but they’ve been very lucky, or very skilled, at managing the staffing. They’ve managed to do it without great protests and they’ve got good relations with staff and students on the whole. The important thing is that they did it early with quite a lot of consultation, meetings every week with staff, for instance.”

While the potential risks and unintended consequences of change programmes are often discussed at board level and assurances sought, governors are aware of the tension between providing effective oversight and straying into operational matters.

“I raised the issue that cutting staff will impact staff student ratios and that surely impacts on quality, but the executive said they’d be careful to make sure it doesn’t, and we just left it at that,” said one governor. “Once you’ve raised it and they assure you, there’s not much you can do other than keep an eye on student satisfaction survey results and other evidence.”

But of course, the impacts, positive and negative, of some change programmes are not apparent until months or even years down the line. 

“In effect, you only know that the ship is sinking when it is sinking,” as one board member puts it.

At these difficult times, a strong history of the capabilities of the senior team, and trust, is paramount.

“The more granular details of how the million pounds of savings will be made is an executive rather than a board matter”, says one governor. “You have to let them get on with it and trust them to do it. Because we have a certain amount of trust in the VC and his colleagues, it works.”