Do UK universities provide value for money?

Addressing a fundamental question about customer value

Are universities value for money? 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. The high risk move in this area is delegating the responsibility for creating the university value proposition(s) to university marketing communication departments in isolation .

Why is this risky? It is risky because when ‘marketing’ is seen as just the awareness making and customer communication role (attention interest decision action) alone rather than anything to do with the origination and delivery of student value (the domain of researchers, tutors and student support staff) a critical disconnect occurs between the essence and expression of value. If the expression of a university value proposition is left to the university marketing communication department alone it is prone to ‘facelift marketing’ couched in generic consumer values and generic consumer experiential terms rather than anything to do with educational value creation and educational delivery essence of the higher education offer. This can end up being the world of superficially differentiated promises that can be disconnected from the service reality of learning in a higher education institution. The sort of thing whereby ‘our university is near the seaside or a national park, or our university has great accommodation and a vibrant night life’.

Value is a hard thing to pin down

Trying to 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)

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…

Marketing courses are typically built on a particular and implicit management philosophy.

The majority of business management courses in business schools around the world are built on the assumption of management as a hard science (This is the hidden agenda of the lauded MBA for example).  Hard science is not just any old science but a particular form of objective, value free, deal with the 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 other natural sciences and in the early days management researchers (social scientists) in business schools tried really hard to get academic ‘street cred’ by copying the assumptions and methods of positivism to study their subject. Doing this meant and only accepting empirical (based on, concerned with, or verifiable by observation or experience) evidence and it has had a powerful influence of management thinking since the early days. It comes with a problem though when trying 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.

1) The hard science positivist/ hard empiricist approach described above OR

2) 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.

A third way to think about customer value creation

There is a third game though! In academic parlance this third way navigates a path between:

Positivism or Naive Empiricsm  and Relativism and is called Critical Realism

The CR approach stands on the idea that Reality is stratified, the empirical (surface) and beneath that like an iceberg the actual (stuff that exists but you can’t see it) and beneath that the so called real (the mechanisms and conditions that generate impacts at the empirical level.) Technically speaking CR is an ontology and positivism and relativism are epistemologies . 

Much of today’s management education is based on assumptions of positivism or its softer cousin (perceptions. attitudes and preferences exist but they still need to be measured) called neo-positivism rather than Critical Realism. Neo-Positivism is the driver of the ‘satisfaction’ agenda. This means that most university managers who have their MBA’s or Masters in HR or Marketing etc  operate from a very particular (often philosophically naive) set of assumptions about reality and value which generates a view of Value that is restricted to something immediately observed and experienced. The trouble with that nice neat convenient view is that most of us sense there is something more going on. So when Sir Keith remarks:

“…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?”

This value/reality assumption set he is acknowledging here is a positivist view of value BUT  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.”

This is value/reality set of a more critical realist perspective. This view is about an invisible, deeper, generative subtler and longer term idea of value. It is also not just about the money and surface interactions in isolation.

The irony of defining delivering and communicating university value

There is a real irony in the definition, delivery and communication of university value.   At the heart of this conundrum lies a concern with 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 learnersThe purpose and value of a university education is therefore so much more than the collection of stuff delivered by a ‘ didactic teaching’ approach that says just fill my head with ‘knowledge of principles, tools and techniques’. Adult Educationalist Malcom Knowles observed:

““a basic human competence…is the ability to learn on one’s own” Knowles (1975) Self Directed Learning.

This is highly relevant because this competence underpins all entrepreneurial and value creating marketing management activities – the marketing executive is expected to have insight, foresight and lead the way. Learning how to become self-directed is often an unsatisfactory, risky and disconcerting developmental experience at the time. Full of what Jack Mezirow calls ‘disorientating dilemmas’. As a student you might feel you need to be told how to respond to an assignment, told which articles to read, told how to get a first and when you don’t get direct answers feel unsatisfied.  However if you are ‘told’ everything you might feel satisfied and it won’t provide any educational value at all. It wont help you develop the that capability to identify things such as channels to market in new market sectors, interpret market research, or imagine new business models.

Being concerned with value of this deeper and longer term nature is the basis of a rebuttal to questions such as ‘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 time spent in front of a tutor?

Zoning in on satisfaction focuses students on what they WANT rather than what they NEED. Value lies in what is needed and that need may well be invisible and unrecognised in the present moment. In that sense a concern with satisfaction undercuts the very essence of the purpose of marketing which concerns itself with the definition, delivery and communication of value (Bower M., Garda R. A. (1985) The role of marketing in management. The McKinsey Quarterly, 3, 34−46.) The mantra of satisfaction predisposes universities towards a reactive customer worship image of service delivery than meaningfully different value creation image.

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.

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

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

 

 

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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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