Do UK universities provide value for money?

This is the question that Sir Keith Burnett the president and vice-chancellor of the University of Sheffield has recently discussed in his Times Higher article Do UK universities provide value for money?

The question is driven by impact of increases in student fees, the debates about vice chancellor pay and the method of funding of higher education in general.  The explicit defense of university value in the face of challenge and criticism is evidently new territory for many senior university management teams.

Trying understand, deliver and communicate value is not new territory for anybody who has worked in the commercial sector. Nor is it  new territory for a significant number of business and management academics who could knowledgeably advise their university management teams on the ambiguous nature of value.

 ‘Value may be one of the most overused and misused terms in marketing and pricing’  Leszinski and Marn (1997:99)

The risky move in this area is to also assume that university marketing departments should have responsibility for creating the university value proposition. Why risky? well because Marketing is typically cast as the awareness and communication role alone. If this is the case it is prone to ‘facelift marketing’ rather than anything to do with value creation and delivery essence of the offer. This is the world of differentiated promises that can be disconnected from the service reality. 

Just as an example of the extent of research into this deceptively simple and perennially contentious notion here are some relevant articles:

Leszinski, R. and Marn, M.V. (1997) Setting value, not price. The McKinsey Quarterly, No. 1, pp. 99-115.

Woodruff R.B. (1997) Customer value: The next source for competitive advantage: Journal of the Academy of Marketing Science. Volume 25, Issue 2, pp 139-153

Payne A., Holt S. (2001) Diagnosing Customer Value: Integrating the Value Process and Relationship Marketing.  British Journal of Management. Vol 12 159-182.

Khalifa A.S. (2004) Customer value: a review of recent literature and an integrative configuration. Management Decision Vol. 42 No. 5, 2004 pp. 645-666

Gallarza M.G. Gil-Saura I. Holbrook, M.B. (2014) The value of value: Further excursions on the meaning and role of customer value. Journal of Consumer 10: 179–191

Understanding value is vital for all that follows. If you want to achieve competitive advantage you need to understand value, if you want happy customers you need to understand value, if you want a successful business you need to understand value.

Value is a multifaceted moving target. Sir Keith points out that value is more than just the price or as Michael Porter claimed ‘the price someone is willing to pay’. I totally concur with Sir Keith and I believe that there is one very important thing about understanding value that gets lost in the wash and there is a good explanation for this which is…

The majority of business management courses in business schools around the world are built on the assumption of management as a science (This is the hidden agenda of the lauded MBA for example) and not just any old science but a particular form of objective, value free, go by facts you can see and measure sort of science that goes by the name of Positivism

Now this sort of science is great for things like physics and chemistry and the natural sciences and in the early days management researchers (scientists) in business schools tried really hard to get academic ‘street cred’ by copying the assumptions and methods of positivism and only accepting empirical (based on, concerned with, or verifiable by observation or experience) evidence.

But to understand social things like people and their beliefs can you really understand something by just looking at the surface? or do you look at what is going on beneath for your assessment of value? There is more to value than meets the eyeball to paraphrase Hanson in Hanson, N. R. “From Patterns of Discovery,” in Perception, R. Schwartz, ed. pp. 292- 305, 1988.

So the assumptions you hold (if you are even aware of them) have a huge influence on what you believe the issues are and what actions should be taken to address them. Often we are lead to believe that there are only two games in town.

a) The hard science positivist/empiricist way mentioned above and

b) the so called fluffy ‘its all relative/anything goes’ Post Modernist way of understanding the world in which language and discourse create (construct) social reality.

There is a third game though!

In academic parlance this is the difference between:

Naive Empiricsm  

Critical Realism

Much of today’s management education is based on assumptions of the former rather that the latter and is the thrust of the ‘satisfaction’ agenda and every day assumptions about what the reality of something is. This means that most university managers who  clutch their MBA’s and such like operate from a very particular (often naive) set of assumptions about reality and value. This distills out into two core approaches:

  1. Value as simply something that is immediately observed and experienced
  2. Value as something that can profoundly generate a complex difference in the right conditions

Sir Keith remarks that:

“So when a parent asks, “How many contact hours does my kid get at university?” or “How much money will they earn afterwards?”, they are really making sure that they are not being ripped off. They are trying to get at the value for money from their child’s point of view. And given that they and their children are now bearing the costs directly, who can blame them?”

I think this is value/reality assumption set 1 thinking.

When he observes:

“If a parent wants “better value for money” in the sense that they long for their child to be taught by truly great thinkers then they need to think of education in its fullest sense. Perhaps they should be concerned at the erosion of resource for the kind of work which won their child’s university and department international respect.

What academics do when they are not teaching matters for our students because their futures will depend on our reputation many years ahead.”

I think this is value/reality set 2 thinking.

Set two is about a deeper, subtler and longer term idea of value. It is also not just about the money in isolation.

A really profound issue at the heart of this debate concerns the value and purpose of higher education overall. Talk to most academics, look at their degree design documents and sitting there bold and proud is the aim that students by the end of their degree will move towards being independent self directed learners. This is a highly valuable competence and not the outcome of a ‘teaching’ approach that says just fill my head with ‘knowledge stuff’. It is also the basis of a rebuttle of the ‘so how many contact hours will by son/daughter’ get? Surely the issue is will my son/daughter be able to seek guidance when appropriate not some facile metric of hours in front of a tutor?

So what does the future hold? What sort of value do universities provide? What sort of value will they provide? It will be interesting to see what happens if the obsession with surface interpretations of value dominate because students, employers and the country will be the losers. And all because some managerialist university manager thinks they know what they are talking about when it comes to value because they’ve done a management masters.

The-value-of-something-is-seldom-known-until-it-is

A critical realist take on value might just stop university value being lost

 

 

 

 

 

 

 

 

 

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Imagination: the ultimate source of competitive advantage

I believe that our imagination is the ultimate source of competitive advantage. 

What is the Imagination?

When I talk about the imagination I don’t mean the juvenile-romanticised version of imagination that is associated with idle fantasy, day dreaming, self indulgent creativity and idealism. What I am referring to is the imagination as a world shaping and world revising power. It is our imaginative capacity that shapes what we perceive through our senses and transforms the information we collect on the way in to our minds and shapes the creation of business models, product and service solutions, competitive themes and value propositions on the way out from our minds.

Our imagination is the vital junction box between the material world and the world of ideas. Think of it as a ‘middle-ware’. The ancient Greeks placed a special importance on imagination and Aristotle used the term Phantasia as the imagination’s ability to ‘bring things to light’. Crucially it is the only capacity we have for considering things that are not actually present here and now. This means it is vital for the way we think about things such as past customer experiences and product and service offers that we might buy in the future. Okay so you might be thinking this is a load of philosophical mumbo jumbo? Well hang on a moment, here’s what marketing guru Ted Levitt and strategy experts Hamel and Prahalad have to say.

Ted Levitt in his 1986 book The Marketing Imagination invokes imagination as a necessary aspect of achieving meaningful and differentiation by giving customers compelling reasons to want to do business with the supplier. Significantly Levitt draws attention to the issue of absence when he states “Imagination means to construct mental pictures of what is or is not actually present what has never been actually experienced.” He notes at the onset of his discussion that ideas precede the deed and in that sense his view of imagination resonates with the idea that a value proposal precedes the solution and the creation of value. He claims in this context that The marketing imagination is the starting point of success in marketing.”

Hamel and Prahalad  in their 1991 book Competing For The Future refer to imagination as a characteristic of The Imagination Company that enables it to translate the ‘inconceivable to the conceivable’ by having the imagination to envision markets that do not yet exist”. Implicit in this take on imagination is a capability to use ideas to shape the material world differently. An imaginative company is one that fashions it’s markets rather than merely fits with what presently exists.

Michael Beaney in his 2005 book Imagination and Creativity characterise the imagination as the capacity to create images, to conceive of something non-existent and to come up with something new. So with that in mind this quote by economist and philosopher Kenneth Boulding caught my eye:

“Man’s image [of things] is also characterised by a phenomenal capacity for internal growth and development quite independent of messages received from outside. So great is this capacity, indeed, that it can easily become pathological. In the extreme form we see the schizophrenic who builds up a whole imaginary universe out of the proliferations of his (sic) own images without any regard for contradictory messages from outside. It is this property of ‘imagination’ however which is also responsible for the greatest achievements of man

Eva Brann in her book Imagination Sum and Substance states that the rational world just ‘is’. This means our mind must interpret and manipulate the information and experience it receives so that the cold information means something. Brann also tells us that in order to operate in the world our imagination needs to be ‘gathered by reason’ too otherwise we will attempt the completely unrealistic. Think about that for a moment. What this means is that data capture and data analysis on their own don’t help us, we have to engage in the act of interpretation and synthesis. So the next time you are asked to just ‘tell me the facts’ it might pay useful to take that with a pinch of salt.

So with this in mind, think about anything happening in business and society things such as, big data, artificial intelligence, customer choice factors, customer complaints, service standards – whatever, at the basic level they just ‘are’. It takes the imagination of the sales and marketing minded professional to do something with the information they receive. This is more than perceive and interpret (inbound part of imagination) its is the outbound architectures of new, better and different solutions where the rubber of imagination hits the road.

Some definitions of Imagination:

Imagination is our capacity to think more widely , less literally to let our minds roam amongst possibilities be more ready to suspend belief and disbelief summon things from our minds not given by perception. Roger Scruton in A companion to Aesthetics 2nd edition Davies, Higgins , Hopkins, Stecker

Seeing things as – Wittgenstein

the thought of other past or possible perceptions of the same object  – Peter Strawson

embroidering and trying things out – Michael Beaney

Imagination is competence:

As you can see these are characteristics of an agile professional and therefore an agile organisation. It is a characteristic that is not seen in stultifying bureaucracy and individuals who think that doing good job is making sure systems and processes are unthinkingly policed and non conformists are punished and de-valued. Imagination is the skill of the consultative sales person, the ability of the collaborative co-worker, the habit of an organisation that learns.

Imagination is the antithesis of administrative bureaucracy and the associated massive cost burden and loss of competitive opportunity. Bureaucracy kills the imagination.  Imagination is a fundamental aspect of being able to act on the principles and ideas set out in our book Value-ology

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