Dean's forum

Citation

(2014), "Dean's forum", American Journal of Business, Vol. 29 No. 2. https://doi.org/10.1108/AJB-04-2014-0023

Dean's forum

Article Type: Dean's forum From: American Journal of Business, Volume 29, Issue 2

Where will the next generation of university leadership come from?

After decades of a relatively stable environment, higher education is now in a period of great change and instability. In 2006, the Secretary of Education's Commission on the Future of Higher Education concluded that “American higher education has become what in the business world would be called a mature enterprise: increasingly risk-averse, at times self-satisfied, and unduly expensive. It is an enterprise that has yet to address the fundamental issues of how academic programs and institutions can be transformed to serve the changing educational needs of a knowledge economy. It has yet to successfully confront the impact of globalization, rapidly evolving technologies, an increasingly diverse and aging population, and an evolving marketplace characterized by new needs and new paradigms” (Spellings, 2006, p. xii).

In 2013, Moody's Investors Service (Bogaty and Nelson, 2013) evaluated the outlook for higher education as negative. They pointed to rising tuition, crippling student debt, falling state financial support, and changing demographics. These analysts have identified a small group of “diversified market leading” higher education institutions with billion dollar endowments, as the only schools that have a positive rating.

For public universities to be successful in this competitive landscape they require leaders with a new set of skills. Corporations have long since recognized the importance of ensuring that the organization has developed internal talented individuals to take leadership positions to meet their current and future needs. As a result, talent management has become a critical strategic imperative, and is a concern of every successful corporate executive.

In this editorial we argue that it is even more important for higher education institutions to be focused on talent management. After all, our key responsibility is developing the human capital of our students, so why are we not doing this with our own university staff and faculty? Talent management, defined as the development of the right people with the right skills in the right jobs, is too low a priority in higher education. Few universities have formal, organization-wide approaches to talent management. In most cases universities take a reactive approach which uses poorly developed, non-systematic leadership workshops, fails to plan for succession, and relies heavily on outside hiring to fill high-level positions.

Needed skills in higher education leadership

In their report, “The State of Higher Education in 2013,” consulting firm Grant Thornton identified three competencies that are critical in this new educational environment (Kurre and Grant Thorton, 2013). These competencies are strategic planning, marketing/brand building, and change management. These are in addition to existing skills such as fund raising, management of staff, and budget/financial oversight.

University leaders must develop a vision and a strategic plan. The strategic plan should address how the university will develop a sustainable, revenue-driven, market responsive business model that leads to long-term success. Universities need to become proactive, focussed, and realistic about what can be achieved. Difficult choices need to be made about which students to serve, and what subjects and programs to offer.

Second, university leadership must focus on marketing and building the university brand. Universities are struggling to demonstrate value in this challenging economy, and will need to respond to demand for accountability and, more importantly, high-quality graduates. The major differentiator of institutional success will be documented student learning and placement. Enhancing the brand is critical to recruitment of talented students and faculty, as well as to fund raising.

The third critical competency is change management. Universities have a long established tradition of consultation and shared governance with faculty. This creates a complex and diffuse management structure. It can slow the decision-making process, and hinder the ability of the university from being responsive to society's needs.

Faculty tends to be immersed in separate disciplines, and fails to appreciate the needs of the college or university as a whole. To be effective this requires a legislative leadership style. As Collins (2005) wrote in his monograph “Good to Great and the Social Sectors,” leaders need to rely more heavily on persuasion, political currency, and shared interests to create the right conditions for decision making. Leaders must communicate continuously about the strategic vision, and explain how decisions are made and are consistent with the objectives of the organization.

Current leadership development practices

University academic administrators rise through the ranks of academia. It takes the average faculty member 12-15 years to be promoted from assistant professor to professor. At that point the faculty member, by then 38-42 years old, may decide to try out administration, and take on a leadership role. By corporate standards this is very late. In most corporations, high-potential people are identified in their mid-20s, and then given experience and assignments that develop their leadership ability. Corporate managers and directors are held accountable for identifying these high-potential individuals, and for development of that potential.

In addition to lack of leadership development, most universities have a very poor performance management system in place. Faculty is evaluated on the basis of publication and teaching. The system does not identify and reward high-performing leaders.

A third issue is lack of effective leadership training programs within universities. Often a person selected by his or her own faculty to chair the department is given only a one- or two-day leadership seminar, which consists of several speakers who provide information on personnel policies and budgeting. In my leadership-training program, we were shown a movie called Overboard (1987) starring Goldie Hawn and Kurt Russell. Goldie Hawn plays an heiress who is thrown overboard, loses her memory, and is duped into believing she is the wife of a poor carpenter and the mother of his four unruly children. We were told that a chair faces the same issues as Goldie Hawn.

So what is the result? Bok (2013), twice president of Harvard University, wrote that university presidents, provosts, and deans often avoid making meaningful change. University leaders are reluctant to take on new initiatives that would upset faculty, because they desire positive references from those faculty members when seeking their next leadership position.

When leaders leave for new opportunities, the university incurs great cost in terms of fees to search firms and lost time and organization momentum. The university hires an executive search firm, which typically recruits an external candidate. Research on succession in business firms indicates that external hires are more likely to fail than internal hires. In addition, the organization can lose two to three years by delaying strategic initiatives while waiting for the new external hire to learn the culture and practices of the organization. According to Wharton School management professor Bidwell (2011), external hires get significantly lower performance evaluations for their first two years on the job as they acclimate, striving to understand the culture, and build relationships. External hires also have higher exit rates, and are paid 18-20 percent more.

A recent study by the Association to Advance Collegiate Schools of Business (AACSB) International found that, on average, a business school dean stays three years. After the three-year tenure, the dean steps down, and it takes an average of 18 months to hire a replacement. That means the average business school is being led by a lame duck or interim dean 33 percent of the time! How can the business school develop and implement important strategic initiatives with continual leadership turnover?

Conclusion

Christensen (2011) forecasted that up to 50 percent of the existing colleges and universities in the country may not survive as a result of this new competitive environment. Competitors offering on-line degrees, continuing issues of affordability, and reduced state support for higher education combine to undermine the current education model. He argues that university leaders will need to develop totally new business models in order to survive. We will need to move away from traditional input measures of seat time, credit hours, and student-faculty ratios, and focus on real learning and mastery of concepts.

Many universities are struggling to respond and adapt to these trends. Zemsky (2013), after reviewing recent reports on higher education, said “to avoid further shame, it is time for higher education to fix itself, choosing leaders and managers who know how to corral a reluctant faculty and move forward with an agenda that ensures that all Americans will benefit from the nation's investments in its colleges and universities” (p. 165). Before it is too late, universities need more strategic, innovative leaders, including deans, vice presidents, provosts, and presidents. These leaders need to create a new vision, build a consensus among faculty, staff, and external stakeholders, and successfully implement new strategic initiatives to radically transform their respective institutions to adapt to the changing needs of our nation.

Hugh Sherman
College of Business, Ohio University, Athens, Ohio, USA

References

Bidwell, M. (2011), “Paying more to get less: specific skills, matching, and the effects of external hiring versus internal promotion”, Administrative Science Quarterly, Vol. 56 No. 3, pp. 369-407

Bogaty, E. and Nelson, J.C. (2013), “Moody's: 2013 outlook for entire US Higher Education sector changed to negative”, Moody's investors services, available at: www.moodys.com/research/Moodys-2013-outlook-for-entire-US-Higher-Education-sector-changed--PR_263866 (accessed March 3, 2014)

Bok, D. (2013), Higher Education in America, Princeton University Press, Princeton, NJ

Christensen, C. (2011), The Innovative University, Jossey-Bass, San Francisco, CA

Collins, J. (2005), Good to Great and the Social Sectors, Harper Collins, New York, NY

Kurre, F. and Grant Thorton (2013), “The state of higher education in 2013”, May, available at: www.grantthornton.com/staticfiles/GTCom/Not-for-profit%20organizations/The%20state%20of%20higher%20education%20in%202013.pdf (accessed March 3, 2014)

Overboard (1987), directed by Garry Marshal, Metro-Goldwyn-Meyer, Los Angeles, CA, December 16

Spellings, M. (2006), A Test of Leadership, Charting the Future of Higher Education, ED Pubs, Education Publications Center, US Department of Education, Jessup, MD

Zemsky, R. (2013), Checklist for Change: Making American Higher Education a Sustainable Enterprise, Rutgers University Press, New Brunswick, NJ